Government to boost inspection of imports

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.