publications

Part 9: Restoration of the Import Policy And Regulation to Their Previous Parameters

By : Riza Buditomo; Rinaldi Raymond; Muhammad Ramzi; Devi Mutia Alisa

03-Jun-2024

i. In Brief
Following our previous update on Part 8 here, on 17 May 2024, Minister of Trade (“MOT”) issued MOT Regulation 8 of 2024 (“MOT Reg 8”) which is the third amendment to MOT Regulation No. 36 of 2023 on Import Policy and Regulation (“MOT Reg 36”).
The issuance of MOT Reg 8 is expected to provide relaxation of import regulations and accelerate the process involved in import activities. For instance, the implementation of MOT Reg 36 has led to several issues for importers to import their products. For instance, many containers/imported goods are stuck at the ports. These issues are the impact of the unpreparedness of the new licensing process implemented by MOT Reg 36, e.g.:
• The relevant institution (e.g., Ministry of Industry) is facing difficulties in providing the necessary technical assessments required for obtaining Import Approval (Persetujuan Impor/"PI").
• The new system is still under development and not yet stable for use. Many new requirements are complex, making it difficult for importers to comply within a short timeframe.

ii. Key Issues
MOT Reg 8 provides significant changes to the treatment of imported goods, in which the treatment of many of the impacted commodities is restored to the import regulations before MOT Reg 36, i.e., MOT Regulation No. 20 of 2021 on Import Policies and Arrangements as amended by MOT Regulation No. 25 of 2022 (“MOT Reg 20”).

We set out below the key takeaways of MOT Reg 8.

1. The changes of import license of certain commodities.
The import license of certain commodities (e.g., traditional medicine and health supplements, cosmetics and household supplies, bags, and valve products), which under MOT Reg 36 require PI, now are no longer require PI, as detailed below.

 

2. Certain commodities are no longer require Technical Consideration

(Pertimbangan Teknis/"Pertek") for PI Issuance.

 

MOT Reg 8 changes the requirements for the issuance of PI for certain commodities (e.g., electronics, footwear, apparel, and accessories products). These commodities currently do not require a Pertek for issuance. Instead, they only need a plan for imports within 1 (one) calendar year.
For your reference, we set out below the comparison of import licenses between MOT Reg 36 and MOT Reg 8 for several of the most commonly imported commodities.

iii. Note to Importers

In light of the above, the following are the impacts brought by MOT Reg 8 for importers:

1. Importers should be aware of the new import provisions provided by MOT Reg 8 by reviewing the import licenses  for their imported goods. If their goods require Import Approval (PI), they must verify the requirements for obtaining a PI. (whether it requires Pertek or an import plan).

2. Importers should develop a strategy for using the PI in light of the changes brought by MOT Reg 8, which affects goods that previously required a PI and now no longer requiring PI. The importer has the discretion to either utilize the PI for the importation process (use of quota provided in the PI) or to hold the PI until its validity period expires as a precautionary measure. This strategy is in preparation for potential future changes in import regulations that may once again require a PI for these goods. 

It is important to note that although MOT Reg 36 has only been in effect since March 10, 2024, it has already been amended three times. Given these trends and the current implementation circumstances of MOT Reg 36, further changes are anticipated in the near future. These changes are expected to continue at least until the licensing system is ready and the guidelines for issuing PI or Pertek are established within the relevant institutions.
The government's swift action in issuing MOT Reg 8 addresses various obstacles in the import process and supports smooth trade operations in Indonesia. It appears to us that the government continues prioritizing efforts to safeguard domestic industry and investment. Through this new policy, the government is committed to consistently listening to and responding to feedback from business actors to create a more conducive business climate and support national economic growth.
On the other hand, importers have welcomed this change, providing a legal framework and certainty for import regulations and policies. They anticipate smoother operations and increased efficiency in the supply chain.
Rest assured, we are committed to keeping you well-informed about the developments regarding the amendment to the import policy and regulation. We will provide you with timely insights and analysis to help you navigate this ever-changing business environment with confidence.

Share