Customs, excise bills

Customs, excise bills

The bills on customs and excise proposed to the House of
Representatives by Finance Minister Mar'ie Muhammad on Wednesday
are part of Indonesia's effort to adjust its laws to accommodate
changes in business and commerce and to fulfill the new rules of
the multilateral trade agreement under the World Trade
Organization.

The proposed legislation will be the first customs and excise
laws to be enacted by the government since the country declared
independence 50 years ago. They will replace various acts and
ordinances promulgated by the Dutch colonial rulers between 1873
and 1933.

Given the increasingly crucial role international trade plays
on Indonesia's economy and the keener competition on the world
market, new legislation relevant to current business and
trade practices is imperative indeed.

The bill on customs, for example, stipulates clear provisions
on subsidies and countervailing measures as well as anti-dumping
measures included in the new General Agreement on Tariffs and
Trade.

Indonesian businesses have often been the target of anti-
dumping and countervailing measures levied by foreign
governments. But the Indonesian government itself has not been
able to impose similar measures against foreign businesses
because its customs laws, which date back to as early as 1873,
don't cover such measures. Obviously, when the old laws were made
in the 1800s, trading practices like dumping and subsidized
exports had not been anticipated.

Provisions authorizing customs officers to confiscate and hold
imports or exports of counterfeit goods are also encouraging.
These stipulations will help strengthen the enforcement of laws
on copyrights, patents and trademarks. Indonesia has often been
criticized by foreign businesses for being a haven for
counterfeiting practices. The inadequate protection of
intellectual property rights has been cited as one of the main
hurdles faced by foreign investors in Indonesia.

The different view of the price of imports and of import
tariffs, often a bone of contention between importers and customs
officials, was also addressed by the bill. The draft legislation
clearly explains the process of appeal against decisions made by
customs officers.

The bill also clearly stipulates that exports are exempted
from customs checks, except in several special cases to be
determined by the finance minister. However, imports remain
subject to customs checks set by the finance minister. This
provision is obviously designed to accommodate the present system
of pre-shipment inspection which has proven successful in
facilitating smoother import flows and safeguarding state
revenues from customs and duties.

All in all, the two customs and excise bills submitted to the
House, together with the bill on the capital market, should be
welcomed as another step forward in improving Indonesia's general
business climate and supporting the series of economic reform
packages launched since 1985. Several other bills on unfair
business practices, consumer protection and investment are also
expected to be presented to the House before the end of the year.