Transshipment Eradication Agreement to be Signed End of September
Monday, 18 September, 2006 | 12:48 WIB

Tempo Interactive, Jakarta: An agreement between the Indonesian and United States governments to eradicate the practice of transshipment of exports from Indonesia will be signed at the end of this month.

“Agreement has already been reached, so it can be signed approximately at the end of this month,” said Mari Elka Pangestu, Trade Minister, last weekend in Jakarta.

Previously, the two governments agreed to perform verification together if there were any suspicion of transshipment practices.

Part of the agreement includes that the United States government can directly verify Indonesian textile producers when transshipment practice suspicions are uncovered.

This verification can be in the form of visiting a factory location to see the production process and machinery in use.

In addition, verification can also include investigation where the textile industry raw materials originated (Koran Tempo, 24/8).

Mari explained that in the memorandum of understanding (MoU) it will later be each party’s responsibility to explain export activity system.

“With the MoU, importing countries will also have responsibilities,” she said.

In addition to verification, Mari said the two countries have agreed to make the procedures of certificate of origin (SKA) stricter as well as to improve them.

As is already known, transshipment practices have often been conducted by exporters by falsifying the certificate of origin document by stating that a product comes from a country with lower import duty.

For example, some Chinese exporters state that their textiles are from Indonesia because the import duty is lower on Indonesian products.

Mari said the agreement to eradicate transshipment has only been limited to textile products.

“Because based on experience, shrimps and textiles are potential to undergo transshipment,” she said.

Rr Ariyani and Fery Firmansyah
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