Corruption in Trade Licensing and the Loopholes of Indonesia’s Trade Regulation

Nandang Sutrisno1, Alfi Nurjannah2, Mahrus Ali3 & Syarif Nurhidayat4

Abstract
The purpose of this article is to examine the various ways in which corruption occurs in the international trade environment and analyze how international trade laws have addressed it. This study focuses on the relationship between corruption and international trade in Indonesia,exploring the common types of corrupt practices linked to international trade and evaluating whether Indonesia’s current regulations align with international law. This study is a
doctrinal legal analysis that draws on national and international laws on corruption and international trade, as well as court rulings on corruption cases. The study also examines corruption cases related to influence peddling in Indonesia in light of the United Nations Convention against Corruption, 2003. Additionally, the study analyzes Indonesia’s international trade regulations from the perspective of the World Trade Organization agreements, including the GATT 1994 and Agreements on Agriculture legal provisions. The study identifies three corruption modes that utilize international trade as a means of
corruption: trading in influence, abuse of function, and issuing permits for
personal gain or for unauthorized individuals. The article concludes that
Indonesia’s international trade policies have provided a fertile ground for corrupt
activitiesby officials, which violate the provisions of the GATT 1994 and the
agreements on agricultureaccording to the WTO perspective. As a result, the
government must strengthen its oversight of public officials to prevent
international trade policies from being used as a means of corruption. Overall,
this study highlights the importance of addressing corruption in international
trade and the need for adherence to international trade laws to ensure fair and
equitable trade practices.

Keywords: Corruption, Licensing, Indonesia, International Trade Law, WTO, GATT 1994