IBI helps Timor-Leste Customs Recover Revenue

Just days after an IBI team provided Container Examination Training to 69 Timorese Customs Officers, the Customs Authorities (CA) uncovered two separate potential organized tax evasion attempts in which goods were concealed or were undervalued to avoid paying the correct duties and taxes. The staff involved commented that the team's training played a significant part in helping them find these goods.

Under the USAID/Timor Leste Trade Governance Activity, implementing partner IBI provides technical assistance to strengthen the Timor-Leste Customs Authority (CA) capacity. An example is the August 2023 comprehensive Container Examination Training of 69 CA staff members. These participants came from diverse Customs backgrounds and regions, including the Tibar Bay Port, Dili Airport, Batugade land border, and the CA headquarters. Before the training, students expressed their lack of awareness about concealments within the body or framework of the containers. IBI's team was crucial in developing the training program and accompanying trainer’s materials, available in Tetum and English. The training program combined classroom-based theoretical learning with practical exercises in the workplace. For example, it covered container inspection methodologies, including risk assessment for selection, health, and safety guidelines before and during inspections, and standard methods to conceal narcotics, prohibited items, and undeclared goods within containers.

The incident was discovered when the TGA team helped the CA identify two shipments involving 24 vehicles with a combined declared value of AUD 88,030 (USD 59,000). Further investigation revealed that the realistic value of the vehicles should have been AUD 845,661 (USD 572,000), indicating a significant underv

aluation by the importer. In the case of the second company, the CA identified two shipments involving six vehicles and related parts, with a combined declared value of AUD 17,671 (USD 11,900). Initial research indicates that the actual value of the vehicles exceeded AUD 100,000 (USD 67,600), highlighting yet another substantial undervaluation by the importer. The discovery of this attempt allowed the Activity team and CA to collaborate and swiftly resolve the situation.

The two companies involved defended their declared values, claiming the vehicles had undergone crash repairs, justifying the lower values. With support from the Trade Governance Activity Team, the CA Commissioner utilized the Memorandum of Understanding (MOU) between the Timor-Leste Customs Authority and the Australian Border Force (ABF) to verify the values declared by the companies when exporting the vehicles from Australia to Timor Leste. The assistance from the Activity team directly resulted in the CA imposing 18 penalties on the importers who had misrepresented their merchandise. This led to the collection of around $20,007 in extra penalties and associated revenues because of the heightened declared values of the goods.

Aside from assisting the CA in identifying and targeting non-compliant traders and securing additional revenues, this case marked the first instance of the CA utilizing the MOU with the ABF. The CA Commissioner commended the process for obtaining information, finding it accessible and efficient, and expressed gratitude to the Activity team for their support in assisting the CA in preparing the request to the Australian Border Force. Due to the favorable outcome of the situation, the CA Commissioner pledged to utilize the MOU more frequently in the future.

Separately, a CA team examined a container in Tibar Bay Port and identified 25,995 additional electronic goods concealed within a consignment from China.

The Trade Governance Activity team is committed to supporting the professional growth of the CA staff at Tibar Bay Port. With the CA discovering the organized attempt by the two companies alongside discovering the electronic goods from China just days after the training, IBI’s TGA team is showing impressive results.