CIRCULAR OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE
NUMBER SE-17/BC/2008

CONCERNING
GUIDELINE FOR DETERMINING AUDIT OBJECT

THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE,
March 25, 2008

To:

• 1. The Director of Audit
• 2. The Heads of Regional Offices of the Directorate General of Customs and Excise
• 3. The Heads Of Primary Service Offices of the Directorate General of Customs and Excise

In the context of improving effectiveness in the implementation of Regulation of the Director General of Customs and Excise No. P-36/BC/2007, concerning Procedure for Audit of Customs and Decision of the Director General of Customs and Excise No. KEP-12/BC/2000 concerning Audit Procedure in Customs and Excise, it is deemed necessary to provide guideline for determination of Audit Object as follows:

1. in determining audit object, the Audit Director, Head of Regional Office or Head of Main Service Office shall apply risk management;

2. risk management referred to point 1 above shall be applied in compiling List of Audit Object Program (DROA) and in determining audit object at any time;

3. in applying risk management the following shall be taken into consideration:

• a. Auditee's profile;
• b. Audit record such as:
• 1) has never been audited;
• 2) previous audit result; and/or
• 3) not audited yet period;
• c. value of customs and excise facilities;
• d. value of State's levy;
• e. goods subject to export tax;
• f. classification and imposition or customs tariff;
• g. import and export frequency;
• h. level of goods/products subject to excise;
• i. frequency in excise tape orders; and
• j. information/intelligence such as (if any):
• 1) under-valuation;
• 2) over-valuation;
• 3) misclassification;
• 4) partial (separate) payment;
• 5) existence of proceeds and royalty and/or
• 6) infringement in the same industry (modus).

4. The risk management referred to in point 3. may also taken into consideration:

• a. information on commodity stipulated as potential or high risk commodity;
• b. high risk country of origin;
• c. existence of a dubious company;
• d. nature of business of a dubious company;
• e. prohibited and restricted goods;
• f. preferential tariff and discriminative tariff (anti-dumping, safeguard, gratitude, compensation);
• g. topic of customs and excise drawing national attention; and/or
• h. channel for goods export

5. If the foregoing variables are insufficient for analysis, other variables may be added according to the characteristics or type of the audit object.

6. For the purpose of analysis of risk management in determining audit object, the Audit Director, Head of Regional Office or Head of Main Service Office shall:

• a. conduct profiling the data of audit object existing within the respective working area, and update the date every time amendment takes place;
• b. ask for data on the customs and excise activities from the Customs and Excise Supervisory and Service Office (KPPBC) in the area under his/her supervision;
• c. ask for data or information from the Directorate within the Head Office of the Directorate General of Customs and Excise (DJBC), other DJBC Regional Office, relevant technical agency or the community.

Thus, for information and action.

Stipulated in Jakarta,
On March 25, 2008
THE DIRECTOR GENERAL
signed,
ANWAR SUPRUADI
CSRNo.120050332

Copied to:

• 1. The Secretary of the Directorate General;
• 2. The Directors within the DJBC.