Customs officers return
Customs officials, who are likely to fully regain their authority to clear imports next April -- in coincidence with the plan to terminate the pre-shipment inspection system -- are campaigning to the businesspeople they will exercise their authority efficiently and effectively. For the past few months they have been trumpeting that the corruption-ridden customs service is now history and how, in their new role, they will be able to guarantee smooth flows of imports. They have been talking about the use of electronic data interchange to process documents, electronic scanners to check containers, the sparing use of physical inspections and concentrating on post-release audits.
However, importers who have been so pleased with the efficient, corruption-free pre-shipment inspection system -- initially conducted by the Geneva-based Societe Generale de Surveillance (SGS) and more recently in cooperation with the state-owned PT Surveyor Indonesia -- are proving hard to convince. Businesspeople are apparently still traumatized by their bitter experiences with the corruption-infested customs service of pre May 1985, when the customs office was stripped of its inspection authority. The Indonesian Importers Association has urged the government to maintain the present pre-shipment inspection system, asserting that, if necessary, its members are willing to pay the inspection fee.
It is, however, not fair to assess the customs service as more corrupt than, say, the tax directorate general. The problem, though -- in so far as the inspection and clearance of imports is concerned -- is that the business community has a comparison to make. Businesspeople find it hard to believe that the customs officials, who like other civil servants in the country are among the lowest-paid officials in the world, will perform as well as the implementers of the pre-shipment inspection service, who are paid more than ten times as much as the customs officials.
They also wonder how the customs service could be "clean" and efficient while other government agencies are still notorious for rampant bureaucratic inertia and malfeasance. The manner in which the customs service has handled air imports which, unlike sea imports, have been subject to customs inspection on arrival since last July, does not help support the claims of the newly acquired integrity.
The government has yet to decide whether the pre-shipment inspection system will continue or be terminated; it has only decided to end its inspection contract with PT Surveyor Indonesia on April 1. The General Agreement on Tariffs and Trade (GATT) still allows Indonesia and other developing countries to use the pre-shipment inspection system but the government apparently thinks it is now time to restore the customs inspection authority in coincidence with the implementation of the new customs law. This stipulates a combination of on-arrival inspection and a post-release audit.
As more than 85 percent of Indonesian imports consist of basic and intermediate industrial materials and capital goods, efficient import flows are vital. It is therefore imperative for the government to ensure that the efficiency of imports will be maintained.
There are several factors that are crucial to the smooth implementation of the new inspection system. The most important is for the government to ensure that, on arrival, the physical inspection of imports is conducted on a very selective basis. That means physical inspections will be done only on the basis of strong suspicions of regulatory violations based on concrete intelligence.
The government needs to set performance standards for customs officials to prevent them from abusing their authority and holding up imports in an attempt to extract bribes from businesspeople. An order to conduct an inspection usually triggers the process of malfeasance. As the new customs law allows for post-release audits of imports and requires importers to keep import documents for at least 10 years for possible investigations, customs officials can still correct any mistakes or punish violations that are overlooked in the speedy clearance of imports.
Prices of imports are the most common bone of contention between importers and customs officials, and differing views are bound to arise, especially because the new law introduces a self- assessment system for import duties. The government therefore should ensure that importers and agencies engaged in handling imports as well as customs officials fully master the provisions of the GATT valuation code and the classification of goods under the Harmonized System.
There should additionally be a mechanism by which importers' complaints about the customs service or differences of views are handled by a panel of independent, competent experts. Such an arbitration board would help protect businessmen from arbitrary actions by customs officials.