'Preshipment inspections should be an option'

'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)