Maintenance of pre-shipment inspection sought
Maintenance of pre-shipment inspection sought
JAKARTA (JP): Indonesian importers see the present pre-
shipment inspection procedure as the most effective and efficient
system to secure smooth import flows, prevent administrative
smuggling and safeguard government receipts from import duties.
"Judging from the interests of the government and the
objective of improving macro-economic efficiency, the pre-
shipment inspection system which was launched in the middle of
1985 is the best," Amirudin Saud, Chairman of the Indonesian
Importers Association (Ginsi), noted yesterday.
Amirudin was commenting on the suggestion by the Ekonit
economic research center to replace the pre-shipment inspection
with a post-audit procedure (upon arrival inspection).
Ekonit argued last week that the present system is very costly
since the government is forced to pay a large fee to the Geneva-
based Societe Generale de Surveillance (SGS) as the sub-
contractor of PT Surveyor Indonesia to carry out the inspection
work.
"I think the fee paid to SGS is insignificant compared to the
benefits the pre-shipment inspection procedure generates for the
whole economy," Amirudin added.
"If necessary, importers are willing to bear part of the costs
of the pre-shipment inspection," he said in reemphasizing the
crucial need to maintain the present system.
He said the country's manufacturing industry, which now
accounts for the bulk of non-oil exports, depends largely on
imported basic and intermediate materials and capital goods.
"Hence, smooth and efficient import flows will contribute
greatly to strengthening the competitiveness of our exports," he
argued.
He said that of the 821 out of the 1,000 most active importing
companies who responded to Ginsi's questionnaire last May, almost
99 percent asked for the continuation of the pre-shipment
inspection.
Amirudin also quoted official records as showing that
government receipts from import duties rose sharply from Rp 544.5
billion in fiscal l984/85 (before the pre-shipment inspection
system) to Rp 2.65 trillion in fiscal 1992/1993.
This rapid increase, he added, is very impressive given the
steady decrease in import tariffs as a result of the deregulation
measures and the fact that more than 85 percent of Indonesian
imports now consist of raw and intermediate materials and capital
goods which are exempted from or subject to very low tariffs.
"This shows that the pre-shipment inspection has minimized
under-invoicing practices," he pointed out.
Corruption
The importers are afraid that restoring the corruption-ridden
old system whereby customs officials were empowered to make
physical inspections upon arrival of imports (post-audit) would
again subject them to arduous procedures and a high degree of
uncertainty regarding the clearance of import documents, he
added.
Amirudin argued that the customs service, which was stripped
of its inspection authority in the middle of 1985 in coincidence
with the introduction of the pre-shipment inspection system,
would not be able to provide as efficient and credible service as
that currently performed by PT Surveyor Indonesia and its
subcontractor, SGS.
"Even now, there has been a tendency among several customs
officials to abuse Presidential Instruction No.3/1991 which
allows customs officers to make physical inspection of imports
under several pre-conditions," he pointed out.
The 1991 ruling, for example, allows customs officers to make
physical inspections at the ports of unloading whenever they
receive intelligence on possible manipulations within particular
import shipments.
Excuse
"But some customs officers used this clause as an excuse for
making inspections even though the quality and source of the
information was questionable," Amirudin added.
The problem, though, is that importers cannot get compensation
for the additional costs they must bear for the inspection even
if the information turns out to be false and the import turns out
to fulfill all the procedures.
According to Amirudin, such inspections are very costly
because the importer has to pay Rp 50,000 (US$23) for the
movement of every container box to the inspection site, not to
mention other costs related to demurrage, storage and delays.
"That is why importers prefer maintaining the present pre-
shipment inspection system, especially because PT Surveyor
Indonesia, which is 80 percent owned by the government, will take
over about 85 percent of the inspection work from SGS beginning
next year," he said.
According to him, the pre-shipment inspection also protects
Indonesian importers from dishonest suppliers overseas because
the procedure ensures that importers will get precisely what they
ordered in terms of quality and quantity. (vin)