Mon, 31 Mar 2003

Retired officials behind phantom import firms

Rendi A. Witular, The Jakarta Post, Jakarta

A senior customs official said retired customs officials were connected to the more than 1,500 "phantom" import companies whose licenses were recently suspended by the government.

The head of the importer registration project at the Directorate General of Customs and Excise, Nirwala Dwi Heryanto, said the retired officials either owned or had helped corrupt businessmen establish the firms.

"Such suspicions are well founded given that they (retired officials) are familiar with customs procedures," he told The Jakarta Post over the weekend.

He was commenting on the recent move by the Ministry of Industry and Trade to suspend the licenses of 1,566 importers, representing 21 percent of the country's total 7,126 importers, following their failure to submit company data, including their addresses.

The move is part of the ministry's campaign to increase the supervision of the country's import activities in a bid to curb smuggling.

Nirwala said senior customs officials often continued to exert influence over junior officials even after retirement. Corrupt retired officials, he said, use this influence to skirt customs procedures in collusion with active officials.

"The practice is possible thanks to Indonesia's tradition in which juniors respect their seniors very much. This is a common phenomenon in all government offices," he said.

Given their connections with active officials and knowledge of the loopholes in import procedures, retired customs officials often provide consulting services to import firms, advising them on how to clear imported goods without going through the normal procedures.

The Directorate General of Customs and Excise said corrupt importers had caused the state roughly Rp 8 trillion (US$909 million) in lost revenue each year from customs duties and import taxes alone.

Law enforcers have found it difficult to shut down these phantom import firms because they use fake addresses and identities when applying for import licenses.

As part of the effort to curb illegal activities, the directorate has ordered all licensed importers to register with the agency. The agency wants to identify dubious importers likely to be involved in smuggling.

Under a joint ministerial decree signed by Minister of Industry and Trade Rini Soewandi and Minister of Finance Boediono last December, all importers must register and submit their company data, including their financial reports, to the customs office by April 1. Customs officials will then conduct field checks to verify the data submitted by the importers.

Starting next month, only those importers who have registered with the customs office will be allowed to continue their activities.

Nirwala said that as of Saturday, about 4,000 of the total 7,126 importers had passed the field checks. The others either had failed the checks or had delayed their registration due to "technical problems".