The devil is in the details

Posted: February 22, 2011 in News

By : Marvel Sutantio Jakarta, February 22nd 2011

After an insightful and informative conversation with Mr. Agung Purwoko, we came to a conclusion that this whole Customs on the Distribution Rights polemic comes down to whether the distribution rights was part of the condition of sale or not.

Let’s look at the article and paragraph of the Valuation Agreement again,

1.     The royalties and licence fees referred to in paragraph 1(c) of Article 8 may include, among other things, payments in respect to patents, trade marks and copyrights. However, the charges for the right to reproduce the imported goods in the country of importation shall not be added to the price actually paid or payable for the imported goods in determining the customs value.

2.     Payments made by the buyer for the right to distribute or resell the imported goods shall not be added to the price actually paid or payable for the imported goods if such payments are not a condition of the sale for export to the country of importation of the imported goods.

If the right to distribute is part of the condition of sale, the Directorate General of Customs and Excise was on the right track, they can apply the customs. But if it’s not included, then they made a mistake and breached the Valuation Agreement

How to determine whether it’s part of the condition of sale or not? It’s on the agreement between the buyer and seller, or in this case, the importer and exporter of the movies. According to Mr. Agung, the agreement, contract or whatever dealings between them, needs to be audited to find out the truth. Hopefully after this whole condition of sale matter has been cleared out, this polemic can be settled once and for all.

Based on my personal interpretation, it was all rainbows and sunshine for more than a decade, heck it’s almost 2 if I’m not mistaken. Everything’s just fine, until this new interpretation of the customs on distribution rights came up. The MPA just responded, reacted to this new interpretation. IF MPA was the one that blew the first shot (i.e. out of the blue boycotting movies to Indonesia), then it’s their fault. But in this reality, we all know who called for trouble.

Honestly, if the Directorate General of Customs and Excise knew exactly about this whole Condition of Sale problem, they would’ve brought it up days ago. Jero Wacik, Deddy Mizwar, Tio Pakusadewo and other “supporters” of the Directorate General of Customs and Excise (and MPA haters) would’ve brought it up as their main weapon during the press conference last week. The fact that they DIDN’T KNOW and DIDN’T EVEN BROUGHT IT UP clearly shows that they don’t have a single evidence or proof to back their claims. In this writer’s opinion, even without the audit, even without determining the condition of sales, they already prove themselves oblivious to this whole WTO Valuation Agreement matter. The distribution rights customs is just a made up ruse to distract us from other hot topics or a quick money making scheme by the greedy, uninformed officials.

Let’s hope everything goes well and the new distribution rights customs be annulled. For Indonesia’s movie industry’s sake, for Cineplex 21 & Blitzmegaplex’s business, for their employees & families, for movie fans everywhere and for the sake of this country.

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