Customs service wants to negotiate over new U.S. import policy

Rendi A. Witular, The Jakarta Post, Jakarta

The government will negotiate with the U.S. customs to allow for the physical inspection of Indonesian exports destined for the American market to be conducted at Indonesian ports so as to minimize costs for local exporters, an official said.

Director for inspection and investigation at the Directorate General of Customs and Excise Sofyan Permana told The Jakarta Post on Friday that the customs service had sufficient container X-ray scanning facilities at the main Tanjung Priok port (two units) and Surabaya port (one unit), but needed financial assistance to fully operate the equipment.

He said that for the full operation of each scanner, the customs service needed at least US$1 million per year.

Sofyan hoped the U.S. government would provide the necessary financial assistance.

The U.S. government last month imposed a new customs policy called the Container Security Initiative, forcing a number of countries to ship their exports for physical inspection in appointed international ports before entering the U.S. market. The move is part of the efforts to minimize the terrorist threat to the U.S.

Indonesian exports, for instance, must first be inspected in Singapore.

The controversial policy has been criticized by local exporters, saying that the move would create additional costs and new trade uncertainties.

The U.S. is one of Indonesia's main export markets for manufactured and agricultural products.

Some 75 percent of Indonesia's exports to the U.S. have always been shipped via Singapore due to a lack of capacity in local ports.

This may be the reason why top economic ministers have not complained vociferously about the controversial policy. Since Indonesia finally decided to cooperate fully with the U.S. effort to fight terrorism, any U.S. policy that could harm Indonesia's exports to that country might be expected to draw strong criticism from the government.

"I understand that many exporters have protested against the CSI policy. That's why we want to negotiate with the U.S. customs service," Sofyan said.

Under the CSI policy, exporters must file a report with the U.S. customs listing the goods they plan to ship to the U.S. 24 hours prior to loading, otherwise the products would not be allowed to enter the U.S. and the exporters would have to bear the cost of storage or reexport.

Exporters are also burdened with an additional cost of around $25 for using the U.S. customs' automated manifest system for submitting such reports as well as the cost of inspections under the CSI regulations.

If an error, whether intentional or unintentionally, is found in the report, the U.S. customs will fine the exporter around US$5,000.

Based on this, local exports that are suspected of being high risk must undergo physical inspection in a designated port such as Singapore before entering the U.S.