Client Newsflash

Amendments to the Regulation on Importer’s Licenses (MOT Reg 59-2012)

This Newsflash summarizes the provisions of the Minister of Trade (the “MOT”) Regulation No. 59/M-DAG/PER/9/2012 dated September 21, 2012 (“Reg. 59”) regarding Amendments to MOT Regulation No. 27/M-DAG/PER/5/2012 (“Reg. 27”) regarding Provisions on Importers’ Identification Numbers (Angka Pengenal Importir – API).

Reg. 59 was issued to address some concerns arising under Reg. 27 as well as to make corresponding adjustments due to the issuance of another Minister of Finance regulation regarding the exemption of duty on the import of machinery and goods and materials for the industrial development in framework of capital investment.

The summary of the pertinent provisions of Reg. 59 is set out below:

1. Definition of Special Relationship. Reg. 59 redefines “special relationship” by removing the words “taking financial and operational decisions.” Please refer to our Newsflash dated July 20, 2012 regarding Reg. 27 for comparison (posted on our website as well). The consequence of the removal of these words is that the definition of special relationship is broader and more general.

2. API-U Holders Now Can Import Goods in More than One Section in Goods Classification System. Reg. 59 now lets an API-U holders (i.e., APIs granted to trading companies) to import goods in more than one section in the Goods Classification System provided:

a. the API-U holder must import the goods from an offshore company that has special relationship with the API-U holder; or
b. the API-U holder is a business entity which are wholly or majority-owned by the State.

The special relationship may be justified based on: (i) a contractual arrangement in sharing control over an economic activity; (ii) share ownership; (iii) articles of association; (iv) agency/distribution agreements; (v) loan agreements; or (vi) supplier agreements.

In order to be able to import goods in more than one classification, in its application for the API-U the holder must also attach: (a) a statement letter from the API-U holder stating the special relationship; and (b) proof of the special relationship legalized by the foreign trade Attaché or diplomatic/consular/representative of the Republic of Indonesia in the country of the company with the special relationship. M-00199 2

3. Import of Complementary Goods by API-P Holders. Reg. 59 relaxes the requirements for an API-P holder to import complementary goods. Now an API-P
holder may import complementary goods if the import is consistent with the API-P holder’s license and the complementary goods originates from an offshore company which has a special relationship with the API-P holder. Under Reg. 27, the complementary goods would need to be produced by the offshore entity. The description of special relationships for API-U holders also apply to API-P holders.

4. Transfer of Certain Imported Goods by API-P Holders. Reg. 59 now allows API-P holders to transfer only certain goods that are imported with duty exemption for their production processes to a third party after at least two years of own use by the API-P holders from the import date.

5. Certain Imports without APIs. Reg. 59 removes the requirement to obtain an approval from the Import Directorate of the Ministry of Trade for the import of certain goods under Reg. 27 without API.

The foregoing material is the property of AKSET Law and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor should it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.

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