ASEAN-CHINA FREE TRADE AGREEMENT (ACFTA) TO DEVELOP THE LEGAL REGIME ON EXTERMINATION OF GOODS SMUGGLING IN ASEAN FROM INDONESIAN PERSPECTIVE (COMPARISON STUDY: EUROPEAN UNION)

Abstract

Purpose: ASEAN-China Free Trade Area or ACFTA was established by ASEAN states and China to create free trade areas by removing barriers to trade in goods and services. While economic cooperation between the ACFTA state members increases, inter-states goods smuggling still happens and affects the economy sector. This article will study, whether ACFTA regulates goods smuggling especially between China and ASEAN and, how the way the ACFTA could learn from the European Union’s systems to resolve goods smuggling and fraud to help ASEAN in reducing the rate of smuggling of imported goods from Indonesian approach.
 Methodology: This study has employed a normative legal research method with a comparison approach to explain how ACFTA could develop the agreement role in ASEAN to reduce and exterminate goods smuggling activities by comparing the current system with the European Union form of law system and agreement.
 Main Findings: This study found out that ACFTA missed the discussion about goods smuggling. Trader’s intention to avoid taxes and import duties from importing countries has pushed the import goods smuggling to increase. A large number of Indonesian traders, especially in the outermost area did goods smuggling because of their dependence through the import goods from neighborhood countries. A developed regional framework like the European Union has a special institution that coming from joint European countries authorities working to resolve smuggling matters.
 Implications/Applications: The study will provide the details related to ACFTA, whether they regulate the import and goods smuggling between China and ASEAN Countries. Learning from the European Union law system and agreement regarding this matter, hoped to be an example for ACFTA to develop the regulation regarding the same matter.
 Novelty/Originality of this study: Study about the extermination of goods smuggling in ASEAN has not got enough attention from society, meanwhile, it gave an adverse effect on taxation and the economic sector in every state.