Indonesian Political, Business & Finance News

Govt to set up anti-smuggling team

| Source: JP

Govt to set up anti-smuggling team

Fabiola Desy Unidjaja and Annastashya Emmanuella, The Jakarta Post,
Jakarta

Amid mounting criticism of the apparent impotence of the customs
and excise office in curbing rampant smuggling in the country,
the government decided at a Cabinet meeting on Thursday to set up
a powerful interdepartmental team to tackle illegal activities
that had caused the state to suffer massive financial losses.

Director General of the Customs and Excise office Permana
Agung said at a press conference after attending the meeting that
the Office of the Coordinating Minister for the Economy would
serve as the team's coordinator.

"This team is necessary so that we can conduct comprehensive
surveillance on smuggling so that such activities do not hamper
the country's efforts to revive the ailing economy," Permana
said.

Recognizing that it was extremely difficult for one
institution alone to stop smuggling, Permana said that members of
the team would come from the customs service, the National Police
and the relevant state agencies.

"The proposed team will have the power to impose strict
measures and to crack down on all kinds of smuggling activities,
while at the same time streamlining more than 100 regulations on
the import-export trade," he added.

Poor law enforcement, graft and collusion have allowed
smuggling to flourish in Indonesia, especially in the five years
since the economic crisis struck the country in 1997.

Products smuggled include arms, timber, fuel, luxury cars,
electronics and textiles.

A World Bank-sponsored assessment last year revealed that the
customs and excise service was one of the country's most corrupt
public institutions, along with the traffic police and judiciary.

Many parties have long complained that the rampant smuggling
activities were made possible by collusion between corrupt
customs officials and importers.

The disappearance of 14 containers of smuggled luxury cars and
electronic goods from the Cirebon customs office in West Java
last month is one example.

Reports said that the 14 smuggled containers were then
discovered at a warehouse belonging to a businessman linked to
senior military and police officers.

A survey sponsored by the Indonesian Importers Association
(Ginsi) revealed that the handing over of inspection authority to
the customs and excise office in 1997 had caused the state to
suffer around Rp 30 trillion (US$3 billion) in potential revenue
lost per year due to extensive smuggling and under-invoicing
practices.

The survey said that after four years of assuming the
authority to inspect imports, the customs office had only built a
negative image among importers as its service has not improved,
and has even deteriorated, amid rampant corruption.

The main problem in tackling smuggling was not just the
presence of errant customs and security officials who provided
support for smugglers, but also the inability of the Indonesian
government to properly guard its vast maritime territory.

The government formed a joint team in early 2001 to crackdown
on fuel smuggling, but it clearly failed to stop the practice.

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