Cargo Manifest Regulation Advocacy

Good quality logistics providers are vital for further strengthening Indonesia’s exports and attracting investment

By Karmila Bain
Monday, June 11, 2018

AmCham Indonesia, along with other foreign chambers, has submitted a joint letter to the Directorate General of Customs and Excise in regard to Ministry of Finance Regulation No. 158/2017 on Inward and Outward Cargo Manifest released by the directorate general (DG). In essence, the regulation provides technical guidelines to handling cargo at Indonesia’s Customs, which the organizations found to not follow international best standards, especially in regard to the usage of the Harmonized System Code (HSC).

The effort was coordinated by EuroCham.

Following the issuance of the regulation, airlines and ground-handling agents shared expertise and technical knowledge regarding current inward cargo manifest procedures, particularly on the airfreight side. The aim is to jointly formulate recommendations to improve current procedures and prevent potential delays due to the use of different electronic systems by all parties involved, such as airline carriers, ground handling agents, Customs, and forwarders.

In general, companies appreciate the movement made by the government, but some issues still need further discussion to ensure effective implementation, as some stipulations do not match with standard business practices.

In this regard, the organizations identified the main issues, which are that the definition and responsibilities of each parties in the cargo manifest procedures are not in line with international practice; the redress issue; and short shipments and partial clearance that are not regulated in the cargo manifest regulation.

The regulation recognizes freight forwarded as contractual carriers or non-vessel operation common carriers (NVOCC), and also applies a management system that allows some redress for inward cargo manifests to be corrected without approval from the Head of the Customs Services OffIce, which to some extent would accelerate the administration process.

The issue of redress of inward cargo manifests is a long-standing problem in Indonesia. Indonesian Customs uses data supplied by the Master Airway Bill (MAWB) produced by carriers for customs-clearance purposes. In this context, even minor errors can give rise to problems, and correcting discrepancies in data requires a redress process including approval from the Customs Services Office, a progressive penalty, and additional time and consequently storage costs. These burden the country’s economy as imported goods are used to support manufacturing.

Therefore, the organizations suggest the use of data on the weight and number of pieces instead of the MAWB data for customs-clearance purposes, and it would be better if the data was taken from the House Airway Bill (HAWB) and provided by freight forwarders or importers.

Minister of Finance Regulation No 158/PMK.04/2017 does not regulate the procedures for short shipment or partial shipment as well as partial clearance. When some cargos are under one shipment but arrive later than others, it is called short or partial shipment. To lower logistic costs and increase efficiency, and avoid unnecessary congestion at airline terminals, it is vital to allow Customs clearance that allows partial clearance. Shipment companies say the reason for short shipment should be enough, considering short shipments take place within the shipper’s control. Clear procedures on partial re-export in the case of partial clearance or short shipment would also reduce logistic costs and dwelling times.

In early May 2018, the organizations met with representatives from the President’s Office. During the meeting, the Indonesia Logistics and Forwarder Association (ALFI) highlighted that there were infrastructure and facility limitations, such as the continuous availability of electricity and reliability of the customs electronic system. The online system developed by Customs in order to support the implementation of the Minister of Finance Regulation no. 158/2017, is also still problematic and not ready to be used by Customs service users.

The President’s Office encouraged both government and business communities to support the development of the electronic system used by the government as a cashless system. The President’s Office will discuss with the Customs and Excise DG and the Coordinating Ministry for Economic Affairs, and visit Tanjung Priok port to see the implementation.

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