'Preshipment inspections should be an option'

JAKARTA (JP): Indonesian importers suggested yesterday that they be allowed to choose either preshipment inspections or post- entry audits, which will be introduced with the new customs law to take effect in April.

"I think the simultaneous use of the two systems, at least for the time being, will ensure smooth flows of imports under the customs law," Amirudin Saud, the chairman of the Indonesian Importers Association told reporters.

He noted that his members fully supported the enforcement of the law -- the first law on customs to be enforced since the country's independence in 1945.

Law No.10/1995 authorizes customs officials to selectively inspect imports on arrival, to conduct post-audits of import documents and assess customs duties. These tasks are now done mostly at ports of loading by state-owned PT Surveyor Indonesia under a contract which is to expire in March.

The post-audit system seems to be one of businesspeople's greatest worries because it allows customs to audit import documents up to two years after the release of imports and payment of duties.

During the two-year period, customs officials could order importers to make up any shortfalls in duties or taxes paid when goods were cleared.

The law will introduce the GATT valuation code for assessing import duties and taxes, replacing a system which is based largely on export market prices.

But the government has not yet decided to end preshipment inspections.

Amirudin said, "But we sincerely hope that customs officials will perform their duty transparently and professionally to guarantee fast release of imports."

He asked his members to honestly declare the value of their imports according to customs regulations.

Many businesspeople have expressed great concern over the start-up problems likely to arise when the new law is implemented.

"Such worries, I think, are simply normal because there are a lot of big changes to be introduced at the same time in April," said James Castle, the president of the consulting company Business Advisory Indonesia.

Castle said that people worry about a new system, especially if they were extremely content with the system which had been in use for about 11 years.

"But if the customs service could perform its duty efficiently and effectively there would not be any problem," he said.

But the fact remains that many businesspeople are not convinced that customs officials would not repeat past mistakes.

The customs service was notorious for its corruption and extensive red tape before its inspection authority was stripped in mid-1985 with the introduction of the preshipment inspection system.

"I have heard businesspeople voice a lot of concern over what will happen in April when customs officials get back their inspection authority," Castle said.

Nonetheless, he added, customs services worldwide were notorious for being corrupt because of big temptations inherent in their authority.

The difference lay in the degree and extent of corruption, he said.

Castle conceded that ultimately the customs service would sooner or later have to regain its main responsibility.

"The customs service has pledged to work with a completely new attitude and a high level of professionalism," he said.

"The biggest challenge now is how to enforce the new customs law without hindering import flows because imports are very crucial to Indonesia's export industry," Castle added. (vin)