Minister to ask customs office for Timor clearance

JAKARTA (JP): Minister of Industry and Trade Tunky Ariwibowo said yesterday that he would ask the Directorate General of Customs and Excise to release the Timor cars imported from South Korea because their owner has secured adequate bank guarantees.

Speaking to reporters after meeting with President Soeharto at the Bina Graha presidential office here, Tunky said he had informed the director general of customs and excise that the importer of the cars, PT Timor Putra Nasional, has provided sufficient guarantees to meet the government's requirements.

There was therefore no reason to stop the cars from receiving customs' clearance, he said.

According to earlier reports, about 4,000 Timor cars, dubbed Indonesia's first national cars, had not been released from the control of the customs office because PT Sucofindo, the state- owned surveying company assigned to assess the local content of the cars, had not submitted its verification. The cars are exempted from import duties and luxury tax on the condition that their local content is no less than 20 percent.

Without the surveyor's verification, the customs office was unwilling to allow the clearance of the cars.

But Tunky's statement yesterday implies that the bank guarantees submitted by Timor Putra are adequate to allow the clearance of the cars.

"The surveyor works on behalf of the government, which in this case is the Ministry of Industry and Trade. If the ministry has stipulated that the cars may be released because they have sufficient bank guarantees, there should be no problem," Tunky said.

In February the government announced its preferential car policy exempting national car producers from import duties and luxury sales tax. It then said that only Timor Putra, controlled by President Soeharto's youngest son Hutomo Mandala Putra, would qualified for the scheme.

Timor Putra plans to make the national car in conjunction with South Korea's Kia Motors Corp. Because of the slow progress in the preparations for the car's production in Indonesia, the government allowed the cars to be manufactured at a Kia plant in South Korea under the Timor name and be exported to Indonesia.

Before clearing the imported cars from customs areas or entrepots, Timor Putra was required to provide the government with bank guarantees whose value is equal to the imported cars' exempted duties.

The company is also required to provide other bank guarantees with a value equal to the cars' luxury taxes when it wants to deliver the cars to its customers.

The idea behind requiring Timor Putra to provide such bank guarantees is that if the company cannot meet the local content requirements set by the government it will have to pay all the duties of the cars it imported and sold to customers.

The 4,000 cars made by Kia arrived at North Jakarta's Tanjung Priok port at the end of August. They have been stocked at private entrepots awaiting government approval for their clearance. (pwn)