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.