Rini proposes PSI system on imports

Rini proposes PSI system on imports

Adianto P. Simamora, The Jakarta Post, Jakarta

Minister of Trade and Industry Rini MS Soewandi has proposed
reestablishing the pre-shipment inspection (PSI) system on
imports as one way of curbing rampant smuggling into the country.

"To help resolve the smuggling problem, it is no exaggeration
to reconsider the possibility of reinstating the PSI system,"
Rini told reporters on Wednesday.

Smuggling is seen as a serious threat to local industries,
which have been facing shrinking markets both at home and
overseas. Some manufacturers, such as textile firms, have
reportedly been bankrupted because they can not compete with
cheaper imported products.

Rini said that she had ordered a special team to examine the
possibility of reintroducing the PSI system.

"We will discuss it further with other related ministries to
examine the possibility of applying the PSI system next year,"
she said, adding the proposed-measure had been discussed with
several business players and importers.

Under the proposed PSI system, imported goods which have often
been a target of smugglers must be inspected at the port of
origin before entering Indonesia.

"This is like the Container Security Initiation system which
is currently used by the U.S. on imported goods from Singapore,"
Rini said.

Indonesia currently uses a post-audit system.

The government applied a pre-shipment inspection system on
imports in 1985 and awarded the contract to Societe General de
Surveillance (SGS) amid massive corruption at the country's
customs office.

The government, however, ended the contract in 1995 following
the implementation of the 1995 Customs Law, and the import
inspection authority was returned to the customs office.

Local manufacturers have long complained that smuggled goods
are threatening their products on the domestic market.

They claimed the smuggling and under-invoicing practices were
made possible by collusion with corrupt customs officials.

There have been growing calls for the government to use the
expertise of SGS for the PSI work.