New decree issued to curb smuggling

New decree issued to curb smuggling

Moch. N. Kurniawan, The Jakarta Post, Jakarta

Minister of Industry and Trade Rini Soewandi announced on
Wednesday the issuance of a decree ordering importers of
textiles, electronics, footwear, rice, sugar, corn, soybeans and
toys to possess a special identification number as part of the
efforts to curb smuggling of the commodities.

Rini said the decree was aimed at protecting local businesses
from rampant smuggling.

"Our local products are seriously threatened by smuggling
activities.

"So, we do what we can do without waiting for other
departments to carry out other measures," she said at the hearing
with the House of Representatives Commission V overseeing
industry and trade affairs.

She added that she had given a two-month transition period
prior to full implementation of the decree.

During the transition period, importers have to register with
the ministry and they will be granted permits if they can prove
their import business. The ministry will also issue special
stickers for the importers to attach to their imported goods.

The ministry's director for imports Aang Kanaan Adikusuma said
the decree would require importers to report their import volume
monthly.

He added that the implementation of the decree would be
evaluated every three months in coordination with other related
departments.

Some business associations, such as the Indonesian Importers
Association (Ginsi), and the Indonesian Chamber for Commerce and
Industry (Kadin) had supported the new policy, Aang said.

Smuggling activities have been rampant over the past five
years since the country plunged into deep economic crisis in
1997.

According to a study by the University of Indonesia, the
illegal practices had made imported goods 25 percent to 40
percent cheaper for consumers than relatively inferior locally
produced goods.

In addition, the study noted, the government lost US$175
million in import duty from the smuggling of electronics,
textiles and footwear in 2000. It also lost a larger amount of
import duties from underinvoicing practices.

Rini added that the government also planned to implement
double-checking of imported goods to reduce illegal import
activities and to increase the effectiveness of the decree.

The initial inspection would take place in the country where
importers purchase their goods and the second check would be
carried out at home, she said.

The Indonesian Textile Association (API) and the Indonesian
Electronics Producers Association (Gabel) welcomed the decree,
saying it would be quite helpful to protect local products from
smuggled goods.

"This is good news for us (local manufacturers). But the
government must select the importers carefully if it wants to
control imports," API's secretary general Lili Asjudiredja told
The Jakarta Post.

The move would strengthen the government's previous efforts to
set up independent teams to curb rampant smuggling activities, he
said.

However, he noted, the government must revise Law No. 10/1995
on customs and excise to end smuggling and get serious about
sending smugglers to jail.

Under the current law, the government had only imposed a fixed
fine for smugglers.

"Otherwise, the good news would be useless," he said.

Executive director of Gabel, Lee Kang Hyun concurred.

But Lee doubted the use of stickers for imported goods, saying
the stickers would surely be forged.

He also criticized the government plan to implement double
custom inspections, saying it would only increase the bureaucracy
for importers.

It would also add financial burdens to the government to
produce such stickers, he said.

"I'm not really convinced the government has the will to
implement the policy," he added.