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.