Mandatory Technical Considerations for Imports of Iron or Steel, Alloy Steel, and Their Derivatives Products
In order to support the stability of the national steel industry and to improve the quality of domestic steel products that utilize iron or steel, alloy steel and their derivatives products as well as to increase the use of domestic iron or steel, alloy steel and their derivative products as capital goods, raw materials and /or auxiliary materials for industrial purposes, as well as consumer goods, and commodities other than those used as capital goods, raw materials and/or auxiliary materials for industrial purposes, the Minister of Industry (the “MOI”) views that it is necessary to regulate the granting of technical considerations for the imports of the above commodities.
Based on the above, the MO issued MOI Regulation No. 1 of 2024 on Procedures for Issuance of Technical Considerations for Imports of Iron or Steel, Alloy Steel, and their Derivatives Products dated January 8, 2024 (“Regulation 1/2024”). We set out below the key provisions of Regulation 1/2024.
♦ Key Definitions
Key definitions under Regulation 1/2024 are as follows:
1. Iron or Steel is defined as a product from the smelting of carbon iron or steel with a number of further alloying elements and fouling elements, and/or goods produced from such products.
2. Alloy Steel is defined as a product from the smelting of steel which contains one or more alloying elements.
3. Iron or Steel and Alloy Steel Derivatives Products (the “Derivatives Products”) are defined as products resulting from advanced processing of Iron or Steel and Alloy Steels in the basic form of bars or sheets or the result of the assembly or merging process of the products from the advanced processing of Iron or Steel and Alloy Steel in basic form.
4. Technical Considerations for Imports of Iron or Steel, Alloy Steel, and their Derivatives Products (each, a “Technical Consideration”) are defined as a technical consideration letter which is used as a requirement to obtain an approval for imports of Iron or Steel, Alloy Steel, and their Derivatives Products.
5. Supply Center for Raw Materials and/or Auxiliary Materials (Pusat Penyedia Bahan Baku dan/atau Bahan Penolong) for Iron or Steel, Alloy Steel, and their Derivatives Products (“PPBB”), is defined as a business entity that provides Raw Materials and/or Auxiliary Materials to fulfill the needs of Raw Materials and/or Auxiliary Materials for Small Industries and Medium Industries.
♦ General Provisions of Regulation 1/2024
Article 2(1) of Regulation 1/2024 provides that a business party may import Iron or Steel, Alloy Steel, and the Derivatives Products after obtaining an import approval from the ministry that organizes government affairs in the trade sector (i.e., the Ministry of Trade).
Further, Article 3(1) of Regulation 1/2024 stipulates that to obtain an import approval, a business party must obtain a Technical Consideration issued by the MOI. In this regard, Article 3(3) of Regulation 1/2024 stipulates that the MOI shall delegate the authority to issue Technical Considerations and amendments to a Technical Consideration to the Director-General.
In addition, Article 4(1) of Regulation 1/2024 elaborates that the business parties that may import Iron or Steel, Alloy Steel, and their Derivatives Products are as follows:
- Industrial Companies;
- Industrial Service Companies;
- Non-Industrial Companies which own an API-P;
- Non-Industrial Companies which own an API-U; and
- the PPBB.
♦ Requirements to Submit an Application for the Issuance of the Technical Consideration
Article 4(2) of Regulation 1/2024 stipulates that in order to be able to submit an application for the issuance of the Technical Consideration the business actor(s) must fulfill the following requirements:
Please note that Article 5 of Regulation 1/2024 stipulates that an application for the issuance of the Technical Consideration shall be submitted electronically to the Director-General through the SINSW which will be redirected to the SIINas.
Regulation 1/2024 also provides the required documents and the detailed procedures for each business part for the application of a Technical Consideration. Please contact us through the below emails if you wish us to provide you with our advice in relation to the required documents and the detailed procedures for the application of a Technical Consideration.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Adhitya Ramadhan (aramadhan@aksetlaw.com), and M. Raehan A. Fadila (mfadila@aksetlaw.com) for further information.
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