Plan for new customs inspection draws fire<\/p>\n
JAKARTA (JP): The government's decision to possibly end pre-
\nshipment inspection of imports by April 1, 1997, and replace it
\nwith a post-audit system of on-arrival inspection has drawn harsh
\ncriticism from importers and exporters.<\/p>\n
The Indonesian Importers Association, traumatized by the
\ncorrupt practices of the customs service before the
\nimplementation of pre-shipment inspection in 1985, has repeatedly
\ncalled on the government to maintain the current system.<\/p>\n
It contends that pre-shipment inspection is corruption-free
\nand the most efficient way of handling the flow of imports into
\nIndonesia.<\/p>\n
An efficient import flow is vital as more than 85 percent of
\nIndonesian imports consist of basic and intermediate industrial
\nmaterials and capital goods. An estimated 75 percent of imports
\nare used in manufacturing goods for exports.<\/p>\n
The association's tough-talking chairman, Amirudin Saud, said
\nthe customs office was currently not yet ready to resume its
\ninspection works.<\/p>\n
\"We propose the government better maintain the current pre-
\nshipment inspection system until the year 2000 while preparing
\nthe customs office to eventually take over the inspection,\"
\nAmirudin said.<\/p>\n
He said, if necessary, its members were willing to pay the
\ninspection fee, estimated at over US$100 million a year. The
\ngovernment currently bears all inspection costs.<\/p>\n
Vocal opponents of the post-audit system are not just
\nimporters, but also exporters and ship owners -- all have day-to-
\nday contact with customs officials.<\/p>\n
\"Visions of congested seaports, countless signatures on
\nendless paperwork, unjustifiable delays and customs kickbacks are
\nforemost in the minds of those who fear a return to post-audit
\ndays,\" said London-based The Economist Intelligence Unit in its
\n4th quarter, 1996, report.<\/p>\n
Under the pre-shipment inspection system, goods worth US$5,000
\nor more imported to Indonesia are inspected at loading ports and
\nthen sealed. Unless a seal has been broken, no further inspection
\nis necessary.<\/p>\n
The system was introduced in 1985, by presidential decree, in
\nan attempt to curtail the corruption and inefficiency associated
\nwith customs inspections.<\/p>\n
Geneva-based Societe Generale de Surveillance (SGS), the
\nworld's largest goods inspection service company, was the
\noriginal sole contractor for the pre-shipment inspection. In
\n1991, state-owned PT Surveyor Indonesia took over the role and
\nthe SGS has since served as a subcontractor.<\/p>\n
The government, however, appears deaf to the pleas of
\nimporters and exporters. It continues to push for the
\nimplementation of a post-release audit.<\/p>\n
The government has decided to terminate the contract with
\nSurveyor Indonesia on April 1, 1997, to coincide with the
\nimplementation of the 1995 Customs Law.<\/p>\n
Although it has yet to decide whether the pre-shipment
\ninspection system will be continued under the new customs law, it
\nhas indicated it will again empower the customs office to inspect
\nimports.<\/p>\n
Minister of Finance Mar'ie Muhammad told the House of
\nRepresentatives budgetary commission earlier this month the
\ngovernment would no longer include pre-shipment inspection fees
\nin the budget.<\/p>\n
Instead, the government will increase the budget for the
\nDirectorate General of Customs and Excise to implement the
\ncustoms law.<\/p>\n
Minister Mar'ie, however, has cautioned the customs office not
\nto fumble with the post-audit system, warning that any failure
\nwould be a political embarrassment for the government.<\/p>\n
He also advised that trial operations self-assessing the
\nsystem should begin two months prior to the April deadline, in
\norder to ensure a smooth transition.<\/p>\n
Minister of Trade and Industry Tunky Ariwibowo said last week
\nimporters should not be prejudiced against a post-release audit.<\/p>\n
\"Let's wait and see how the system works. If there are
\nirregularities, I promise I will take those irregularities to my
\nregular meeting with the finance minister and the central bank
\ngovernor,\" Tunky said.<\/p>\n
The Directorate General of Customs and Excise is not under The
\nMinistry of Trade and Industry, but under the Ministry of
\nFinance.<\/p>\n
Chairman of the Indonesian Chamber of Commerce and Industry
\nAburizal Bakrie agreed Indonesia should adopt a post-audit system
\nof on-arrival inspection to anticipate the increasing flow of
\ngoods in the era of free trade.<\/p>\n
The volume of cargo handled at Jakarta's Tanjung Priok port --
\nthe country's largest port -- is projected to grow to almost 2.5
\nmillion 20-foot equivalent units (TEUs) in the year 2000, from an
\nestimated 1.37 million TEUs in 1995.<\/p>\n
Director General of Customs and Excise Soehardjo Soebardi has
\nsaid the post-audit system of on-arrival inspection was necessary
\nto bring Indonesia into line with guidelines of the Association
\nof Southeast Asian Nations.<\/p>\n
Customs officials have been lobbying businesspeople to
\nexercise their authority efficiently and effectively.<\/p>\n
They say the corruption-ridden customs service is now history.
\nThey promise a smoother flow of imports when they assume the
\npost-release audit.<\/p>\n
They talk about using electronic data interchange to process
\ndocuments, electronic scanners to check containers, the
\nintroduction of green lane for bonafide importers and the sparing
\nuse of physical inspections and concentrating on post-release
\naudits.<\/p>\n
Amirudin, however, questioned customs officials' integrity and
\nreadiness to resume post-shipment inspections. \"Facts show that
\nthey are not ready.\"<\/p>\n
He said even in the current pre-shipment inspection system,
\nmany customs officials had violated the rules by issuing so-
\ncalled \"memos\" to summon importers and demand bribes to release
\nthe goods.<\/p>\n
Although the issuance of such memos is legal under the current
\nsystem, customs officials have been accused of abusing this
\nprocedure and issuing false intelligence notes to extort money or
\nhassle importers.<\/p>\n
Amirudin said the planned post-audit system would open many
\nways for customs officials to extort more money from importers.
\nCustoms officials would have more power to hassle importers as
\nthey would be authorized to inspect any imports at points of
\nunloading.<\/p>\n
Besides, customs officials might contest the transaction value
\nof goods, and verification of such value could be difficult and
\nwould lead to delays.<\/p>\n
Valuation in the current pre-shipment inspection system is
\nbased on the minimum value of goods in the international market.
\nThe valuation in the planned post-release audit will be based on
\nthe transaction value.<\/p>\n
The post-release audit system would certainly result in a
\ndecline in government revenue from import duties and taxes due to
\npotential undervaluation of imports. (rid)<\/p>",
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