TEMPO.CO, Jakarta - The arrest of Kwan Tek alias Budi Hartono shows that the law enforcement authorities are taking a tougher stance on the smuggling of liquor. The businessman, who operated in the Riau Archipelago, was thought to be above the law. The endeavor to stop the smuggling of alcoholic beverages must go hand in hand with fitting punishments for the guilty.
The offense allegedly committed by Kwan Tek cost the state billions of rupiah. The National Police Headquarters Criminal Investigation Unit seized around 84,000 bottles of international brand alcoholic beverages from four of the suspects warehouses in Tanjung Balai Karimun in Riau in the middle of September. This liquor had been smuggled by sea from Singapore and Malaysia. If it had been imported legally, the import duties paid would have amounted to 150 percent of the market price.
The smuggling of liquor began to increase after the government appended import duties in 2015. Previously, the rate for alcoholic beverages was only Rp125,000 per liter, but this was raised to 150 percent of the sale price. This increase tempted dishonest businessmen to turn to smuggling in pursuit of large profits.
The Greater Jakarta Police seized 53,000 bottles of illegal alcoholic beverages at the Tanjung Priok port in August. This had been smuggled from Singapore via Riaus Tanjung Pinang. In an attempt to fool customs officials, the bottles had been wrapped in waste plastic before being loaded into a container.
Finance Minister Sri Mulyani has taken firm measures to fight smuggling. A few months ago, she established a High-Risk Import Control Task Force. Headed by Sri Mulyani herself, this task force includes the Economic Coordinating Ministry, the National Police, the Attorney Generals Office and the Financial Transaction Reports and Analysis Center.
This initiative is needed to stop the state from losing revenues. As of the beginning of October, revenue from duties and excise stood at Rp113.7 trillion, or 60 percent of the target. Import duties had only brought in Rp25.7 trillion, or 77 percent of the target, while excise had raised Rp85.1 trillion, or 53 percent of the target. In the last few years, revenues from duties and excise have been disappointing. This year's target for import duties is Rp33.7 trillion, only a slight increase from last years revenues of Rp33.4 trillion.
The National Police HQ team plays a vital role in fighting corruption, as does the Center for the Reporting and Analysis of Financial Transactions and the AGO in the anti-smuggling task force. The problem is that smugglers usually have an extensive network and behave like the mafia. They do not hesitate to pay bribes to customs and excise officials and collude with regional law enforcement officers.
This is why Sri Mulyanis initiative will be far more effective if it also manages to rid the Customs Directorate-General of crooked officials. The organization has a code of ethics and an internal compliance unit that monitors the conduct of staff. But sterner measures are needed. It is not enough to hand down administrative sanctions: officials proven to have helped smugglers must be prosecuted.
It is very important that smugglers and anyone who helps them are dealt with through the courts. The public has often read reports of the seizure of illegal alcoholic beverages, but there is no follow-up. There are no reports of trials or punishments for those responsible. This time, we are waiting for Kwan Tek to be put on trial.
Read the full article in this week's edition of Tempo English Magazine
