TIMOR-LESTE CUSTOMS AUTHORITY CRACKS DOWN ON EMBEZZLEMENT IN MASSIVE IMPORT SCANDAL

Dili, Timor-Leste - A Major Victory for the Timor-Leste Customs Authority

In a significant achievement, the Timor-Leste Customs Authority (CA) has uncovered a massive embezzlement scheme involving undervalued imports worth over $135,000. The scandal was exposed when a shipment of 96,040 kilograms of construction equipment from China was found to be significantly underdeclared.

The Scandal Unfolded

According to sources, the importer had declared the value of the goods at just $54,756.05, despite identical machines from the same manufacturer selling for up to $90,000. CA officials were alerted to the suspicious shipment after a thorough examination of the import declaration form revealed an unusually low value per kilogram.

Investigation Reveals Undervaluation

Upon further investigation, customs revenue and entry processing (CREP) officers discovered that several items had been undervalued, including three “stone crusher” machines that were normally sold for $90,000 but were declared at just $18,000. The importer was questioned about the discrepancy and produced a new invoice increasing the purchase value to $45,000. However, this was still deemed an underdeclaration by CA officials.

Physical Inspection and Administrative Penalty

CA officials ordered a physical inspection of the shipment and assessed an estimated undervaluation of $135,174.95. As a result, the CA imposed a record-breaking administrative penalty of $4,000 and collected an additional $2,550 in revenue from the importer. This marks the largest single penalty issued by Customs for undervaluation fraud to date.

Impact of USAID/CRP Project

The incident highlights the impact of the USAID/Timor-Leste Customs Reform Project (CRP), which has been working to strengthen the CA and improve customs procedures and personnel since 2016. The project’s efforts have already led to significant improvements in customs efficiency, with clearance times reduced from nine days to just 2.7 days and error rates in declarations decreased by over 80%.

Risk Management Techniques

The case also underscores the importance of risk management techniques in identifying suspicious shipments and preventing embezzlement. Since the incident, the CA has implemented measures to improve its detection capabilities, including re-routing consignments that match specific criteria for physical inspections.

Optimism for Future Improvements

As the project continues to support the CA, officials are optimistic that further improvements will be made, leading to increased government revenue and improved transparency in customs procedures.