The joint project between the Indonesian Ministry of Trade (MoT) and the German Alliance for Trade Facilitation created a solid basis for a risk-based approach on import management and documentation. The project piloted a “Trusted Trader Scheme” to analyse the feasibility and applicability of the approach by assessing selected companies.
The pilot project’s results were seen as a starting point for the MoT to further develop its integrated risk management system (IRMS). By simplifying procedures for authorised traders, the MoT is in a position to create incentives for those who invest in compliance and respect all regulations. An intelligence-led risk-based approach leads to faster processing of import and export licenses with fewer interventions – which is beneficial for both the private and the public sector.
Even though activities had to be adapted to the Covid-19 pandemic, the project achieved measurable results. The average processing time for an import authorization was reduced to 3.86 days per permit. In 2018, the average processing time was 7.8 days.
Overall, the project contributed to an improved environment for import documentation and processing in Indonesia. Moreover, it enhanced the digitalization of related work procedures.
The project results are also available as a factsheet:
PROJECT APPROACH
Between 2019 and 2021, the MoT and the German Alliance for Trade Facilitation closely collaborated in developing the risk-based approach. Further to the “Trusted Traders Scheme”, joint work included, inter alia, measures such as:
- A guidebook on risks related to processes when issuing import/export licenses;
- Inputs to draft regulations (see below); and
- Establishing a task force for the implementation of the risk management system (i.e. inter-agency collaboration).
In addition, the MoT issued three new regulations during the project period to improve documentation and processing for imports and exports:
- Simplification of trade through the regulation for reputable traders (Reg 17/2021).
- Simplification of controls post border: No need for self-declaration for companies based on Reg 51/2020.
- Cooperation between authorities: Memorandum of Understanding (MoU) between Customs and the MoT for purposes of data sharing.
The overall idea was to simplify import and export processes for companies with a low-risk profile that have achieved the status of a Trusted Trader. This would help authorities to avoid risks while enabling a smooth flow of goods. The MoT continues its work on further improving its IRMS to create favourable framework conditions for cross-border trade.
Photo credits header:
MAGNIFIER/Shutterstock.com
StreetOnCamara – stock.adobe.com
