Importers forced to pay illegal fees for customs clearance

Rendi A. Witular, The Jakarta Post, Jakarta

The Directorate General of Customs and Excise is indeed a haven for corrupt public service officials, untouched by the law or the reform movement that first swept the country four years ago.

Take a close look at their service offices (KPBC I, II and III) at Tanjung Priok Port, the country's largest trade port in Jakarta, where officials extort various fees from importers to ensure smooth customs clearance. The fees can amount to well over Rp 1 million (around US$112).

"We could find ourselves in a very difficult position if we refuse to pay the illegal fees -- the clearance for our goods might be delayed for an indefinite period. Customs officials always irrationally accuse us of submitting incomplete documentation," one importer, who asked for anonymity, told The Jakarta Post on Friday.

He pointed out that a long delay in customs clearance could prove very costly for importers because they had to pay for warehouse and container facilities.

No wonder that the World Bank and the United Nations Development Program said in their joint nationwide study in 2001 that the customs and excise office is the most corrupt institution in Indonesia.

The Post launched last week an investigation into the customs clearance procedure followed by importers at KPBC I, where there are notices on the wall claiming that services for import clearance are free and that officials are strictly prohibited from accepting money.

But in practice, the notices are mere decoration.

The Post observed that money was extorted from importers from the very first step of clearance. To acquire a receipt proving payment of tax and excise, they had to pay at least Rp 10,000 extra.

The next step was to legalize the copy of import identification number certificate (API) at the treasury division.

In this room, importers crowded around a table at which a staff member distributed an empty envelope to each importer for them to place a bribe in. The illegal fee here ranged from Rp 40,000 to Rp 100,000, not including a separate Rp 10,000 for the staff member at the table.

The envelope was then attached to the copy of the API and another document, and submitted to the staff member, who checked each document -- not for completeness, but for how much was in each envelope. The document attached to the lowest amount of money would be separated from those with the highest.

After sorting the documents, the staff member first submitted the document with the highest fee to the head of treasury for approval.

If a document took a long time inside the room, usually 30 minutes, there was a possibility that the treasury head wanted extra money. An importer is expected to understand this and submit an extra Rp 300,000 to Rp 500,000.

After the API document was approved, importers submitted their documents at the import document acquirement locket. Here importers pay an extra Rp 100,000 to Rp 500,000. The staff at the locket shamelessly took the money and threw it into a locker bulging with cash.

This is a crucial and decisive locket since it decides on whether an importer's goods are designated to the red or the green row. Goods designated to the red row are categorized as supposedly dangerous or illegal and must be inspected. The green row is for supposedly safe goods, which are free from inspection.

It is at this locket that smugglers play to change the category of their imported products, attempting to have them designated to the green row. Smugglers can spend from Rp 1 million to Rp 5 million per container to have their goods categorized as "safe" or for underinvoicing a shipment. They go through the back door of the locket to follow their document, and bribe the staff at the manifest and information (MI) table, who are responsible for designating the goods.

The Post observed the MI staff extorting money from several importers by designating their goods, which were safe goods, to the red row, meaning a long procedure would have to be followed and more money spent.

Importers whose goods were designated to the red row had to put aside Rp 10,000 to Rp 20,000 for the head of the warehouse, and between Rp 300,000 to Rp 400,000 for an inspection team.

An inspection team offers importers the choice of following procedure -- which often delays goods clearance -- or immediate settlement. Settlement ranges from Rp 3 million to Rp 5 million depending on negotiations.

After following procedure, importers must spend another Rp 20,000 for an inspection notice from the Unit Terminal Container (UTC) and the warehouse, Rp 10,000 for a staff member who submits the notice to the head of the UTC and the warehouse, Rp 10,000 for inspection recording, Rp 5,000 for red row document acquirement, Rp 50,000 to Rp 100,000 for document checking and Rp 10,000 for ordering a clearance letter (SPPB).

The above illegal fees do not include legal fees for warehouse space rental amounting to Rp 5,000 per day, container rent US$20 per day and $40 per day if the rental exceeds seven days, and Rp 100,000 for labor and forklift usage.

Being designated to the green row does not mean importers are free from illegal fees. Importers must pay Rp 20,000 for SPPB recording, Rp 10,000 for SPBB approval and copy, a Rp 5,000 courier fee to submit the SPBB to the gate or warehouse, and Rp 10,000 per container for import card bookkeeping. The customs' extortion ends at this level.

Unbelievable as it may seem, the corrupt practices have been occurring for years without the slightest improvement. To help amend this chronic problem, the government, under pressure from the IMF, is planning a 17-point program.