Pre-shipment inspection under fire
Pre-shipment inspection under fire
JAKARTA (JP): Director General of Customs and Excise Soehardjo Soebardi suggested yesterday that the system of pre-shipment inspection applied to Indonesian imports since 1985 be ended to facilitate the implementation of free trade in ASEAN in 2003.
Soehardjo told journalists after speaking at a seminar on the new customs law that Indonesia's pre-shipment inspection system would hinder the harmonization of customs procedures among members of the Association of Southeast Asian Nations (ASEAN), which is set to liberalize internal trade under the ASEAN Free Trade Area (AFTA) arrangement.
"As long as we use the pre-shipment inspection for our imports, don't expect customs procedures in ASEAN to be harmonized," Soehardjo said.
ASEAN groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Apart from Indonesia, the Philippines also enforces the pre- shipment inspections for its imports which are conducted by the Geneva-based Societe Generale de Surveillance (SGS).
The Directorate General of Customs and Excise has been lobbying strongly for the restoration of its whole customs inspection authority which was curtailed with the introduction of the pre-shipment inspection in 1985.
Counter-campaign
However, domestic and foreign businessmen, still traumatized by the red tape and rampant corrupt practices within the directorate general, have launched a counter-campaign to convince the government of the great benefits of maintaining the current pre-shipment inspection system.
Last August, the government extended a contract with state- owned PT Surveyor Indonesia for another two years to carry out inspections of imports at points of loading. SGS continues to act as a sub-contractor for the state company.
I Nyoman Moena, former president of Surveyor Indonesia, totally disagreed with Soehardjo's suggestion.
He contended that the customs law centers not on the customs clearance system but on ensuring a smooth flow of both exports and imports.
"For the sake of a smooth flow of goods, the current customs clearance system can be modified... However, it does not mean that it has to be done by a single agency," Moena said.
He noted that the government has maintained the current pre- shipment inspection system because it ensures a better flow of goods.
The pre-shipment inspection system was launched in mid-1985 under a presidential decree designed to improve the clearance of imports at customs areas.
The decree stripped the customs and excise directorate general of its inspection authority. The government later assigned SGS to the job of conducting the inspection job overseas.
The contract with SGS was modified in 1991 after the government set up Surveyor Indonesia in a joint venture with SGS. The main contract for the inspections was later awarded to Surveyor Indonesia, which in turn hired SGS as a sub-contractor.
In reference to the new customs bill, which will come into force on April 1, Soehardjo said physical inspections of imports must be carried out on a selective basis only.
"To back up these selective inspections, customs officials have the authority to conduct post audits of imports," Soehardjo said.
The new law gives the customs office 10 years to audit export and import documents. Therefore, exporters and importers are required to keep their documents for 10 years.
A number of parties, especially importers, have expressed their concern over the 10-year statute of limitation under which they can be investigated any time. They consider it too long and costly.
Customs officials have contended that the 10-year period defined in the customs law was set in conformity with the tax law which also set a 10-year statute of limitation for tax audits.
Soehardjo explained that the new law requires the government to establish an arbitration board. Importers can appeal to the board against any decisions by the customs office which they consider unfair. (rid)