Government to boost inspection of imports

Adianto P.Simamora, The Jakarta Post, Jakarta

The government plans to issue a new trade ruling early next year requiring imported electronics, textiles, footwear and toys to undergo a physical inspection process by the local customs office in a bid to curb smuggling and under-invoicing practices.

Chairman of PT Samsung Electronics Indonesia Lee Kang Hyun said that the plan was revealed during a meeting between several business associations and the customs and excise office on Thursday.

"The decree will take effect on Jan. 1, 2002," Lee told The Jakarta Post.

The four commodities identified in the decree have often been a target for smugglers and unscrupulous importers who manipulate trade data to avoid paying tax or import duty.

Local manufacturers have long complained that smuggled goods are threatening their products on the domestic market.

They also said that smuggling and under-invoicing practices were made possible by collusion with corrupt customs officials.

An industry source told The Post that the decision to implement the decree had been taken following recent revelations about large quantities of smuggled goods being shipped by dishonest general importers who did not even have addresses.

"It will be more difficult to compete in the domestic market if the smuggling remains widespread," the source said.

The Indonesian Importers Association (Ginsi) reported to President Megawati Soekarnoputri on Wednesday that the state was losing around Rp 30 trillion (US$3 billion) a year due to extensive smuggling and under-invoicing practices.

Ginsi's chairman Amirudin Saud urged the government to apply a pre-shipment customs inspection system to imports to minimize such activities.

Ginsi also urged the government to instruct the state-owned surveying company PT Sucofindo to conduct pre-shipment inspections of imports at loading ports, notably those in Hong Kong, Singapore and other major points of origin for imports to Indonesia.

According to Amirudin, smooth import flows were also vital for Indonesian exporters because the manufacturing industry was highly dependent on imported materials and components.

"The customs service is simply too incompetent and prone to corruption to conduct proper customs inspections of imports, as can be seen from the fact that not a single case of import violation or smuggling has so far been brought to court," he said.