Customs, importers accuse each other of smuggling

Customs, importers accuse each other of smuggling

By Riyadi

JAKARTA (JP): Importers and the customs office have been
exchanging accusations over rampant smuggling practices, with the
former putting the blame on the later and vice versa.

Importers have accused customs officials of helping
irresponsible importers to smuggle goods into Indonesia, through
sea-cargo imports worth US$5,000 or less per shipment.

An executive of the Indonesian Textile Association, Lily
Asdjudirja, hinted recently that many smuggled textiles enter
Indonesia in shipments valued at less than $5,000.

The chairman of Indonesian Importers Association, Amirudin
Saud, confirmed Lily's statement, saying that it was not only
textiles, but also electronics, which had been smuggled into
Indonesia through shipments worth less than $5,000.

Director General of Customs and Excise Soehardjo Soebardi
dismissed the accusation as groundless. He challenged the textile
and importers' associations to present him with evidences.

"It's slander. Prove it, if they have evidence. Don't just
throw out an accusation," Soehardjo said.

Under the current preshipment inspection system, sea-cargo
imports worth more than $5,000 must be inspected at points of
loading by the designated surveyor, state-owned PT Surveyor
Indonesia.

Customs is only allowed to inspect sea-cargo imports worth up
to $5,000 and air-cargo imports.

Soehardjo, in return, accused importers of under-weighing and
under-invoicing shipments of imported goods worth more than
$5,000.

"Many imports which have been inspected by the designated
surveyor still contain some customs violations ... We don't know
what happens to containers after being inspected, their contents
may be changed or some more added," Soehardjo said.

To support Soehardjo's claim, Director for Investigation and
Elimination of Smuggling Thomas Sugiyata showed last week
journalists and executives of the textile association six
containers of imported textiles and apparels which had been under
weighed.

Thomas said all six containers were equipped with surveyor
reports, meaning that they had been inspected at points of
loading by PT Surveyor Indonesia. Nevertheless, customs officials
found significant weight discrepancies.

Amirudin criticized the way the customs office responded to
the textile association's complaints.

By demonstratively showing the six containers to journalists
and textile association executives, Amirudin said, the customs
office seemed to cover up its sins over smuggling cases which
involved customs officials.

He said most textile imports came in shipments worth less than
$5,000, even though their actual value far exceeded $5,000, to
avoid preshipment inspections.

If the customs office was really serious about eliminating
smuggling of textiles and other products, Amirudin said, it
should first of all investigate all past imports worth less than
$5,000 because it was not only textiles but also other products
smuggled into Indonesia using shipments worth less than $5,000.

He said in the first 11 months of last year, he had reported
to the customs office 92 cases of possible smuggling which
involved customs officials. But, as yet, he has not received any
response.

Most of the smuggled goods were consumer goods, mainly
electronics, imported from or through Singapore. They entered the
country in packages which were claimed to be worth less than
$5,000, which exempted them from preshipment inspections.

Amirudin said each of the 92 cases was worth more than $5,000.
Many of them were worth a $100,000 each and some were worth more
than $1 million each.

Such an exchange of accusations between importers and the
customs office is especially inflammatory when the latter is
about to regain its inspection authority after loosing it for 11
years.

President Soeharto stripped the customs office of its
inspection authority in mid-1985 due to rampant corruption of its
services.

He then assigned Geneva-based Societe Generale de Surveillance
to inspect Indonesia's imports at points of loading. And, in
1991, the government appointed PT Surveyor Company to take over
the inspection works. Since then, the Swiss company has been
working as a subcontractor for Surveyor Indonesia.

Nevertheless, the finance minister has decided to cease the
government's contract with Surveyor Indonesia and return the
inspection authority to the customs office, starting April 1,
when the new customs law comes into force.

The minister of finance, however, has not stated clearly
whether the government would terminate the current preshipment
inspections when the customs office resumes its inspection
authority.

Importers, still traumatized by the corrupt practices of
customs officials, vehemently defended the current preshipment
inspections.

They even appealed that the government allow importers to use
preshipment inspections of their imports, at their costs, to
ensure that they received precisely what they had ordered from
abroad.

Preshipment inspections system are necessary, especially for
small and medium-sized importers because they had no resources to
claim back whenever there were discrepancies between what they
received and what they had ordered.

I Nyoman Moena, former president of Surveyor Indonesia,
suggested that the government maintain preshipment inspections
when returning the inspection authority to the customs office.

He said the future demand for customs inspections would be to
ensure smooth flows of goods and increase cautions over possible
smuggling, under or over invoicing, dumping, and the like.

"This is a kind of dilemma because whenever you put emphasis
on the smooth flow of goods, you tend to disregard caution and
accuracy in inspections, and vice versa. So, to combine the two
objectives, preshipment inspections must be maintained, along
side the postaudit system," Moena said.

He noted that preshipment inspections were also needed to curb
imports through the introduction of standards, not tariffs,
because "the future trade fights would not be through tariffs but
through standards".

Preshipment inspections would also be required in a regional
free-trade area, like that designed for the Southeast Asia, to
come into effect by 2003, to verify local or regional content of
certain products.

"Otherwise, there would be many free riders benefiting from
such a free-trade arrangement," Moena said.