ASEAN Bloc Tackles Trade Obstacles

by Mary Swire, Tax-News.com, Hong Kong

13 May 2011

Indonesian Minister of Finance Agus Martowardojo has urged members of the ASEAN trade bloc to implement reforms to establish greater financial sector integration between nations, including through easing tax and non-tax barriers and setting up frameworks to mitigate criminality.

Speaking to the Indonesia Banking Expo, 2011, on May 11, a few days after the 18th ASEAN Summit in Jakarta, Martowardojo emphasized the need for the ASEAN countries to liberalize restrictions to encourage bilateral investment.

The Minister said that in order for countries' financial sectors to integrate, the ASEAN bloc would have to review how the tax systems, capital markets, insurance industries and customs and excise regimes interact.

Countries must also address weaknesses in the financial system, and establish robust corporate governance frameworks to tackle fraud, the Minister said, noting the recent emergences of incidences of banking crime. "We should be prepared, because the economic integration of ASEAN is under spotlight," he said.

On tackling corporate fraud, the Minister said that: "If weakness in the system exist, fraud will occur. Strengthening corporate governance will mitigate this."

ASEAN is comprised of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

At the earlier ASEAN summit, member states agreed measures to facilitate internal trade within the trade bloc and to establish a framework allowing stronger trade ties with China, Japan and South Korea.

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