With its 6 000 inhabited islands, proximity to the very open economies of Singapore and Malaysia, and a corruption-prone customs service, smuggling has been an ever-present feature of Indonesian commercial life. While accurate estimates are by definition not available, a widely adopted rule of thumb in the business community is that tariffs in excess of 15-20% will attract illegal trade (Basri and Hill, 2008). The arrangement yielded substantial profits to the BPPC at the expense of users and farmers, as its government-sanctioned market power allowed it to maximise the spread between the purchase price to clove farmers and the selling price to consumers (WTO, 1998).