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Custom's Service with Less Red Tape, Stiffer Penalties

Government Moves to Clean Up and Improve Efficiency in Custom's Office.

(11/4/2006) As part of the Government's pledge to create a more favorable investment climate through the reduction of red tape and corruption, the Indonesian House of Representatives recently ratified a new Customs Law.

Highlights of the new law, include:

The eventual introduction of a fully computerized customs clearance system in accordance with agreements made by Indonesia under the World Trade Organization (WTO).

Absolute time limits of 30 days imposed on the Custom's department for determining applicable duties payable on any import or export commodity.

An absolute time limit of 60 days has been set in deciding any challenge filed by an importer or exporter regarding a duty rate or commodity classification for a specific shipment.

Exemptions or lower duty tariffs for raw materials or capital goods required by companies classified as "pioneering enterprises."

The provision of interest-free installment payments for exporters and importers in the payment of any duties due to the government.

Export duties of up to 40% of value on selected items deemed essential to the domestic market in order to stabilize both supply and prices.

Stiffer penalties for smugglers of up to 20 years in prison and fines of US$10.8 million.

Punitive penalties adding 33% to the sentences for Custom's officials found guilty of involvement in smuggling activities.

Payment incentives of 50% of any penalties imposed by Courts or half of the value of seized commodities to those who assist the Government in preventing smuggling activities.

Substantially enlarged investigative, audit and inspection authority for Custom's officials in the enforcement of export and import regulations.