By : Riza Buditomo; Muhammad Ramzi
In 2020, the Ministry of Trade (MOT) unveiled a new post-border import regulation, MOT Regulation No.51 of 2020 on Post-border Import Inspection and Supervision (MOT Reg 51), heralding a significant shift in the oversight of imported goods. MOT Reg 51 replaced all prior policies governing post-border import supervision, encompassing the spectrum of import licenses subject to scrutiny, the inspection procedures, and the penalties applicable to offenders.
Notably, the government's Omnibus Law has paved the way for streamlining post-border procedures. In this context, MOT Reg 51 assumes the role of an instrumental mechanism for the MOT's supervisory body and investigators to fortify their enforcement capabilities, expand inspections, and probe into investigations concerning imported goods that have cleared customs at the point of entry.
Despite MOT Reg 51 being in force since the middle of 2020, its actual impact has only become apparent towards the end of 2022. Over time, the enforcement of MOT Reg 51 has progressively gained momentum, manifesting in a growing consistency and assertiveness.
II. Key Development
MOT Reg 51 has given rise to a novel form of examination known as the Post Border Audit, spearheaded by a dedicated department within the Ministry of Trade known as the Directorate of Trade Supervision (DTS). In practice, the DTS collaborates closely with the Directorate of Import, the authority responsible for granting import approvals and licenses. While the DTS primarily provides recommendations, the ultimate decision-making power rests with the Directorate of Import.
A notable aspect of the Post Border Audit is that it is conducted by the DTS, which scrutinizes and compares the alignment between the utilization of import approvals/licenses held by importers and the import declarations/PIB data sourced from the Indonesian Customs office, facilitated by the Indonesian National Single Window (INSW) system. It is worth noting that Customs does not partake in this Post Border Audit, as the focus of the audits diverges.
In the event of any infractions uncovered during a Post- border Audit, importers may be subjected to an array of penalties, spanning from product recalls to the disposal of imported goods. In more severe instances, import and business licenses, including the pivotal Business Identification Number/NIB, could face revocation.
This regulation encompasses all importers who have been granted concessions in post-border customs clearance. Although no specific implementation guidelines have been issued for MOT Reg 51, it is widely acknowledged that internal policies and discretionary measures play pivotal roles in the enforcement of this regulation.
III. Recent Experience
In the past year following the implementation of MOT Reg 51, the Ministry of Trade (MOT) has displayed commendable diligence in enforcing supervision and inspection measures, with a particular focus on industries such as textile, footwear, apparel, and clothing. Moreover, they have placed a priority on monitoring sensitive goods, including essential food items.
In certain instances, due to the absence of detailed implementation regulations or internal record-keeping systems, a voluntary report submitted to the MOT may inadvertently be classified as a violation without formal notification.
A recurring challenge lies in the significant time lag between the receipt of recommendations and the final decision-making process, which can span several months. This generates a sense of uncertainty among business operators, impeding their ability to make informed commercial choices. This pattern is expected to persist in Indonesia over the coming years as audits become more frequent.