Indonesia
Applying a risk-based approach at the Ministry of TradeÂ
-
Alliance Project
-
Status: Completed
-
Duration: Q2/2019 – Q3/2021Â
The project develops and applies systematic risk indicators for licensing and post-border control processes of the Indonesian Ministry of Trade. This will support Indonesia’s efforts towards a fully integrated risk management system and make controls more efficient and faster for both, the ministry and traders. Â
THEÂ CHALLENGEÂ
The Indonesian Ministry of Trade is responsible for several documents and processes affecting imports and exports. A new mandate in 2018 tasked the ministry to supervise the import of prohibited and/or restricted goods (‘Lartas’ goods) post-border clearance by customs. The high volume of imports and exports coupled with new Lartas procedures lead to inefficiencies and longer processing times for mandatory documents and licenses for traders.Â
WHAT WE ARE DOINGÂ
In this Alliance project the ministry develops an intelligence-led risk-based approach to controls and trade facilitation. The project works in the following fields:Â
- Developing and applying systematic risk indicators for two core processes to improve controls. These processes are a) issuing import and export licenses and b) controlling goods post-border after customs release. They serve as a starting point for developing an integrated risk management system that can be scaled up to all applicable processes at the ministry and border agencies.
- Simplifying procedures by establishing a ‘reputable company’ scheme to support compliant traders. This scheme is modelled after the ‘Authorised Economic Operator’ (AEO) programme of Indonesia customs. It is achieved by improved inter-agency cooperation as well as information and experience sharing between customs and the ministry.
- A group of companies tests and provides feedback on the new risk-based approach and ‘reputable company’ scheme within a pilot programme. It is conducted in cooperation between the ministry, Indonesia customs and the Indonesia National Single Window. Based on the lessons learned in this pilot programme, the procedures will be refined and finally rolled out for all traders.
BENEFITSÂ
- An improved risk management leads to faster processing of import and export licenses and fewer interventions. Dangerous goods or non-compliant traders can be targeted and controlled more effectively.
- The ministry creates incentives for traders to invest in compliance and respect all relevant laws and regulations.
- Actively involving the private sector, associations and individual companies to share their industry insights and expertise, provides sense checks from a trader’s perspective.
- Indonesia fulfils its global commitments to trade facilitation by implementing Article 7.4 ‘Risk Management’ of the WTO TFA.
HOW TO ENGAGEÂ
Do you work for a company with international supply chains? Please contact us if you would like to learn more about the project and the Alliance.Â
RELATION TO TRADE FACILITATION AGREEMENT
This project contributes towards the implementation of the following article of the World Trade Organization (WTO) Agreement on Trade Facilitation:
- Article 7.4: Risk Management
NEWS LINKSÂ
- May 2021: Virtual Workshop on Risk Targeting and Risk Measurement between the Ministry of Trade, INSW and Customs
- June 2020: Preparing the roll-out of a risk management pilot program
- February 2020: Setting-up a risk management pilot program
- December 2019: Indonesia and New Zealand share insights on joint border and integrated risk management
- August 2019: Ministry of Trade’s Dedicated Task Force drives forward Risk Management Implementation
- May 2019:Â Cooperation project on trade facilitation officially launched with signing ceremony at the Indonesian Ministry of Trade
- April 2019: Indonesian border agencies commit to facilitating trade by opening up ‘Blackboxes’ and sharing data on risks
- October 2018:Â Training with the National Committee for Trade Facilitation in Jakarta
- May 2018:Â Alliance Partners Evaluate Project Potential in Indonesia
- March 2018:Â Alliance Partners Propose New Project Countries at Half-Year Working Meeting
Â
CONTACTÂ
Dr Ceren Erdogan
Project Lead
ceren.erdogan@giz.deÂ
Vera Tjandrawinata
Project Manager
vera.tjandrawinata@giz.deÂ