DECISION OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE
No. KEP-171/BC/2003

ON
IMPLEMENTING MANUAL OF VERIFICATION OF CUSTOMS AND EXCISE DOCUMENT
IN THE REGIONAL OFFICE OF DIRECTORATE GENERAL OF CUSTOMS AND EXCISE

THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE

Attachment

Considering:

• a. That as an implementation of Law No. 10/1995 on Customs Affairs and Law No. 11/1995 on Excise, it is necessary to conduct verification of customs and excised documents in order to analyze and evaluate the fulfillment of provisions in the field of customs and excise and the prevailing statutory regulations.
• b. that in order to enhance efficiency and effectiveness of supervision, simplification in document verification stage is necessary by still securing safety f the state finance.
• c. that based on considerations as set forth in letters a and b, it is necessary to stipulate a Decision of the Director General of Customs and Excise on Implementing Manual of Verification of Customs and Excise Documents in the Regional Office of Directorate General of Customs and Excise.

In view of:

• 1. Law No. 10/1995 on Customs Affairs (Statute Book of the Republic of Indonesia of 1995 No. 75 Supplement to Statute Book of the Republic of Indonesia of 1995 No. 3612);
• 2. Law No. 11/1995 on Excise (Statute Book of the Republic of Indonesia of 1995 No. 76 Supplement to Statute Book of the Republic of Indonesia of 1995 No. 3613);
• 3. Decree of the Minister of Finance of the Republic of Indonesia No. 2/KMK.01/2001 on Organization and Work System of the Ministry of Finance;
• 4. Decree of the Minister of Finance of the Republic of Indonesia No. 444/KMK.01/2001 on Organization and Work System of the Regional Office of Directorate General of Customs and Excise and the Customs and Excise Service Office;

DECIDES:

To stipulate:

DECISION OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE IMPLEMENTING MANUAL OF VERIFICATION OF CUSTOMS AND EXCISE DOCUMENTS IN THE REGIONAL OFFICE OF DIRECTORATE GENERAL OF CUSTOMS AND EXCISE

CHAPTER I
GENERAL PROVISIONS

Article 1

Hereinafter referred to as:

• 1. Verification of documents shall be an activity of reexamination of customs and excise documents conducted by the Head of Regional Office in the framework of analyzing and evaluating the fulfillment of provisions in the field of customs and excise and the prevailing statutory regulations;
• 2. Customs documents shall be Import Declaration (PIB) together with its customs complementary documents and Export Declaration (PEB) together with its customs complementary documents;
• 3. Excise documents shall be documents related with the making, importation, exportation, transportation, abolition/destruction of Excisable Goods (BKC) and excise tape;
• 4. Director General shall be the Director General of Customs and Excise.
• 5. Regional Office shall be the Regional Office of Directorate General of Customs and Excise;
• 6. Customs office shall is a Customs and Excise Service Office;
• 7. Employee shall be an employee of the Directorate General of Customs and Excise;
• 8. Risk Management shall be a series of systematic, integrated and comprehensive efforts by applying certain procedures in order to identify, analyze, evaluate and communicate the possible risks.

Article 2

Verification of documents as meant in Article 1 number (1) is purposed to:

• a. Assess the fulfillment of the provisions applicable in the field of customs and excise and the prevailing statutory regulations;
• b. Assess the performance of importers, exporters and entrepreneurs of BKC;
• c. Assess the performance of employees who are involved in service system in the field of customs and excise;
• d. prepare materials for establishment of the List of Audit Project Plan (DROA) and Incidental Audit implementation.

CHAPTER II
DETERMINATION OF DOCUMENT VERIFICATION OBJECT

Article 3

(1) Verification of documents shall be conducted selectively with the amount of documents at least 10 % (ten percent) or at least 2500 documents of each total of customs and excise documents submitted by the importers, exporters or entrepreneurs of BKC within the period of 1 (one) month.

(2) The selection process as meant in paragraph (1) shall be conducted by the Customs and Excise Document Section Head in the Verification Division or the Import Verification Head and the Export and Excise Verification Head in the Verification and Audit Division of the Regional Office by means of analyzing soft copy data in the computers and/or documents related with customs and excise activities by using risk management.

(3) The risk management as meant in paragraph (2) above shall be conducted based on risk indicators including:

• a. Profile of Importers, Exporters or Entrepreneurs of BKC;
• b. Profile of Commodities;
• c. Profile of Supplying Countries;
• d. Profile of Loading Countries;
• e. Profile of Customs Affairs Arrangement Enterprises;
• f. Notification of customs value, price of exported goods, BKC price;
• g. Provisions of Prohibitions and Limitations;
• h. Other data that based on analysis contain high risk indicators.

Article 4

Results of analysis as meant in Article 3 paragraph (2) shall be submitted to the Verification Division Head or the Verification and Audit Division Head for document verification by using form as specified in Attachment I to this Decision of the Director General.

CHAPTER III
DOCUMENT VERIFICATION

Article 5

(1) For purpose of implementation of document Verification, the Verification Division Head or the Verification and Audit Division Head in the name of the Regional Office Head shall ask for documents to the related Customs Office Head by using form as specified in Attachment II to this Decision of the Director General.

(2) The Customs Office Head is obliged to submit the documents required, and shall be responsible for the proper implementation of delivery and for the correctness of number of the customs and excise documents to the Verification Division Head or the Verification and Audit Division Head of the Regional Office.

Article 6

The Verification Division or the Verification and Audit Division shall verify the documents, including:

1. PIB and complementary customs documents targeted to:

• a. Completeness and correctness of PIB completion;
• b. Completeness of the complementary customs documents;
• c. Validation of the complementary customs documents;
• d. Fulfillment of provisions on Facility in the field of import;
• e. Fulfillment of provisions on prohibitions and limitations;
• f. Correctness of Basic Value for Import Duty Calculation (NDPBM);
• g. Correctness of notification of quantity and type of goods;
• h. Correctness of notification of Goods Classification and Charging;
• i. Reasonability of Custom Value notification;
• j. Correctness of calculation of import duty and tax imposition in the field of import;
• k. Effectiveness of Goods Physical Check Report;
• l. Effectiveness of Hi-co Scan examination results;
• m. Correctness of reasons for requests of Customs Value Information (INP);
• n. Customs Value Declaration (DNP);
• o. Correctness of Use of Method and Stipulation of Customs Value;
• p. Effectiveness of Appointment of Functional Officer of Document Verification (PFPD) and Functional Officer of Goods Verification (PFPD);
• q. Effectiveness of Intelligent Notes.

2. PEB and complementary customs documents targeted to:

• a. Completeness and correctness of PEB completion;
• b. Completeness of the complementary customs documents;
• c. Validation of the complementary customs documents;
• d. Fulfillment of provisions on Facility in the field of export;
• e. Fulfillment of provisions on prohibitions and limitations;
• f. Correctness of notification of quantity and type of goods;
• g. Correctness of notification of Goods Classification and Charging;
• h. Correctness of notification of export check price for export tax calculation;
• j. Correctness of calculation of export tax;
• k. Effectiveness of Appointment of Functional Officer of Goods Verification;

3. Excise documents and complementary excise documents targeted to:

• a. Completeness and correctness of excise form completion;
• b. Completeness of the complementary excise documents;
• c. Validation of the complementary excise documents;
• d. Fulfillment of provisions on Facility in the field of Excise;
• e. Correctness of notification of quantity and type of Excisable Goods;
• f. Correctness of notification of excise rate of the Excisable;
• g. Correctness of notification of excise rate of the Excisable Goods;
• h. Correctness of calculation of excise imposition;
• i. Settlement of importation, exportation and transportation of excisable goods;
• j. Settlement of outstanding excise;
• k. Records of examination results of importation, exportation and records of administration of Treasurer of excisable goods;
• l. Correctness of quantity of ethyl alcohol destroyed and quantity of burning spiritus produced;
• m. Results of Examination, Supervision of Abolition/Destruction of excisable goods and/or excise tape.

Article 7

(1) Results of the document verification as meant in Article 6 are specified in the Document Verification Result Note (NHVD) by using form as specified in Attachments III, IV and V to this Decision of the Director General.

(2) The NHVD as meant in paragraph (1) shall be attached to the customs and excise documents.

(3) The customs and excise documents that have been verified are affixed with stamp "HAVE BEEN VERIFIEDE" and "Verification Date".

Article 8

(1) Based on the NHVD as meant in Article 7, analysis and evaluation is conducted for each importer, exporter, entrepreneur of BKC, and employees in charge for at least one month period.

(2) Analysis and evaluation as meant in paragraph (1) shall include:

• a. findings of shortage and or excess of payments for import duty, tax in the field of import, export tax, and excise;
• b. Performance of importers, exporters or entrepreneurs of BKC;
• c. Performance of employees.

(3) Results of the analysis and evaluation as meant in paragraph (1) shall be described in the Document Verification Result Note (NHAVD) by using form as specified in Attachment VI to this Decision of the Director General.

(4) The NHAVD as meant in paragraph (3) shall be furnished with recapitulation of findings by using form as specified in Attachments VII, VIII, IX and X to this Decision of the Director General.

CHAPTER IV
FOLLOW-UP OF DOCUMENT VERIFICATION RESULTS

Article 9

(1) Based on the NHAVD as meant in Article 8 paragraph (3), the Verification Division Head shall make recommendations to the Audit Division Head with carbon copy to the Regional Office Head for execution of audit in the field of customs and excise, in the event of any:

• a. findings that result in shortage and or excess of payments for import duty, tax in the field of import, administrative fine, export tax, and excise imposition; and/or
• b. finding on indication of unfair customs value notification , and/or
• c. finding on indication of incorrect export tax notification , and/or
• d. finding on indication of invalid complementary customs and excise documents, and/or
• e. finding on indication of unfulfilled prohibition and limitation provisions, and/or
• f. finding on indication of misused customs service application system, and/or
• g. finding on indication of incorrect excise tariff notification, and/or
• h. finding on inconsistency between the record of examination results and the release of Excisable Goods, and/or
• i. finding on inconsistency in the results of Examination, Supervision of Excisable Goods Abolition/Destruction and/or Excise Tape.

(2) Recommendation as meant in paragraph (1) shall use form as specified in Attachment XI to this Decision of the Director General.

(3) Recommendation as meant in paragraph (1) shall be furnished with recapitulation of findings as meant in Attachments VII, VIII and IX to this Decision of the Director General.

Article 10

In case the unit conducting verification and the unit conducting audit are under supervision of the same division, namely the Verification and Audit Division, the findings as meant in Article 9 paragraph (1) letters a through i shall be followed up with the implementation of audit in the field of customs and excise.

Article 11

(1) Based on the NHAVD as meant in Article 8 paragraph (3), the Verification Division Head or the Verification and Audit Division Head on behalf of the Regional Office Head shall make recommendations to the Customs Office Head who in charge of supervising the employee performance for fostering of employees in accordance with the prevailing provisions, in the event of any:

• a. findings of errors in determination of HS and Customs Value, and /or
• b. findings of improper report on physical examination results of goods for determination of HS and Customs Value, and /or
• c. findings of incorrect reasons for INP request, and/or
• d. finding on indication of erroneous appointment of PFPD and PFPB as a result of employee intervention, and/or
• e. finding of erroneous issuance of Intelligent Note/Intelligent Results Note, and/or
• f. findings of mistakes in settlement of BKC importation, BKC exportation, BKC transportation, and excise debts, and/or
• g. findings of mistakes in recording examination results of BKC importation, exportation and treasury administration, and/or
• h. findings of mistakes in examination, supervision of abolition/destruction of excisable goods and/or Excise Tapes.

(2) Recommendation as meant in paragraph (1) shall use form as specified in Attachment XII to this Decision of the Director General.

(3) Recommendation as meant in paragraph (1) shall be furnished with recapitulation of findings as meant in Attachment X hereto.

Article 12

(1) Customs and excise documents that have been verified shall be returned to the relevant Customs Office or temporarily kept in the Verification Division or the Verification and Audit Division for audit purpose in the field of customs and excise.

(2) In case the customs and excise documents are temporarily kept as meant in paragraph (1), the Verification Division Head or the Verification and Audit Division Head shall inform the Customs Office Head thereof accompanied with their reasons therefor.

(3) If the documents as meant in paragraph (2) above have been followed up completely, they shall be promptly returned to the relevant Customs Office Head accompanied with their list of finding of follow-up results.

CHAPTER V
FOLLOW UP MONITORING OF DOCUMENT VERIFICATION RESULTS

Article 13

(1) The Verification Division Head or the Verification and Audit Division Head is obliged to submit Quarterly Report of document verification results to:

• a. The Regional Office Head to know the success level of risk management usage and to improve performance of the analysts, and
• b. The Prevention and Investigation Director of Central Office of the Directorate General of Customs and Excise for purpose of updating the data on profile of importers, exporters, and entrepreneurs of Excisable Goods.

(2) Quarterly Report as meant in paragraph (1) shall be described in form as specified in Attachment XIII to this Decision of the Director General.

Article 14

(1) The Audit Division Head or the Verification and Audit Division Head is obliged to submit Quarterly Report of audit results to:

• a. The Regional Office Head to know the success level of document verification and to improve performance of the verifiers, and
• b. The Prevention and Investigation Director of Central Office of the Directorate General of Customs and Excise for purpose of updating the data on profile of importers, exporters, and entrepreneurs of Excisable Goods.

(2) Quarterly Report as meant in paragraph (1) shall be described in form as specified in Attachment XIV to this Decision of the Director General.

Article 15

(1) The Customs Office Head is obliged to submit Quarterly Report of results of employee enhancement based on recommendation resulted from the document verification to the Regional Office Head as materials for establishment of policies in the field of human resources.

(2) Quarterly Report as meant in paragraph (1) shall be described in form as specified in Attachment XV to this Decision of the Director General.

Article 16

Quarterly Report as meant in Articles 13, 14 and 15 shall be submitted at the beginning of each April, July, October and January of the subsequent year.

Article 17

For purpose of establishment of technical policies in the field of customs and excise document verification, the Verification and Audit Director of Central Office of the Directorate General of Customs and Excise can ask for reports of document verification results to the Regional Office Head.

CHAPTER V
CLOSING

Article 18

Implementation of this Decision shall be regulated further by the Regional Office Head of the Directorate General of Customs and Excise.

Article 19

Upon coming into force of this Decision, the Decision of the Director General of Customs and Excise No. KEPE0/BC/2000 dated April 10, 2000 is declared null and void.

Article 20

This Decision of Director General comes to effect as of the stipulation date.

For public cognizance, this Decision of the Director General of Customs and Excise shall be announced by placing it in the State Gazette of the Republic of Indonesia.

Stipulated: in Jakarta
On: August 29, 2003
THE DIRECTOR GENERAL
sig.
EDDY ABDURRACHMAN
NIP. 060044459

Attachment to DECISION OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE
No. KEP-171/BC/2003