New Importing Provisions for Entry of Health and Cosmetic Goods

This Newsflash is a part of our Newsflashes in relation to the new importing provisions as regulated under the Minister of Trade (the “MOT”) Regulation No. 36 of 2023 on Import Policies and Regulations  as amended by the MOT Regulation No. 3 of 2024 (collectively, the “New Import Regulation”). The New Import Regulation is effective since March 10, 2024.

Under the New Import Regulation, imports of certain goods is subject to certain limitations. As one of the implementing regulations of the New Import Regulation, the Minister of Industry (the “MOI”) issued MOI Regulation No. 4 of 2024 dated January 30, 2024 on Procedures for Issuing Technical Considerations for Imports of Traditional Medicine, Health Supplements, Cosmetics and Household Health Supplies (“Regulation 4/2024”).  We set out below the key points of Regulation 4/2024.

Types of Goods

To support the stability of local health and cosmetic goods industry and increase the use of such local goods, Regulation 4/2024 specifically sets out the limitations on the import of the following goods: (i) traditional medicine; (ii) health supplements; (iii) cosmetics; and (iv) household health supplies, as listed under Annex I of Regulation 4/2024 (such goods collectively, the “Goods”).

Limitation on Imports of Health and Cosmetic Goods

Companies that hold a General Import Identification Number (Angka Pengenal Impor Umum or an “API-U”) are only able to import the Goods after obtaining the Import Approval from the MOT. However, to obtain the Import Approval, the holder of an API-U must first obtain a Technical Consideration issued by the MOI (the “Consideration”).

Based on the type of Goods, the Considerations are categorized into: (i) a Consideration for traditional medicines and health supplements; and (ii) a Consideration for cosmetic and household health supplies.  A Consideration for each category can only be published one time within one calendar year for the same Harmonized System Code (the “HS Code”).

To obtain a Consideration, a holder of an API-U must fulfill the commitments for each of the relevant Business Classification Number (Klasifikasi Baku Lapangan Usaha Indonesia or KBLI) and submit the required documents electronically through the Indonesian National Single Window System (“INSWS”) that will be redirected to the MOI’s licensing system.

A Consideration will be issued by the MOI after the verification of the completeness of the required documents within 5 (five) business days.

Amended Consideration

Companies that have obtained a Consideration and an Import Approval may submit an application to obtain the amended version of the Consideration in the case of any changes made related to the import data (e.g., the identity of the holder of the API-U, relevant HS Codes, description of Goods, amount of Goods, loading and destination port, etc.).

However, in the case of an increase in the amount of allocation for import needs, such an increase may only be carried out if: (i) the holder of API-U has realized its imports of at least 75% (seventy-five percent) of the total allocated import needs that have been approved; and (ii) the change in the amount of import allocation for each HS Codes is equal to or greater than the amount of the realized imports for the current year.

The validity period of the amended Consideration shall follow the validity of the original Consideration.

Reporting Obligation

After obtaining the Consideration, the holder of an API-U is required to submit the following documents through the INSWS, subject to the relevant laws and regulations:

  1. the Import Approval document along with the changes;
  2. the Import Realization Report; and
  3. the Distribution Realization Report.

Sanctions

The holder of an API-U may be subject to administrative sanctions if such a holder does not submit the required realization report and/or it violates Regulation 4/2024.

As a note, the administrative sanction is in the form of a written warning, rejection for the request of Consideration for the following year and/or recommendation on the revocation of the issued Import Approval.

Changes on New Import Regulation

On April 16, 2024, the Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso announced that the New Import Regulation would be revised. However, the revision of the New Import Regulation is still under the discussion of the relevant government authorities. As such, we will provide an update on this Newsflash if there are any changes made under the revised New Import Regulation.

AKSET

Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Adhitya Ramadhan (aramadhan@aksetlaw.com) or Ayu Nandini Prameswari (aprameswari@aksetlaw.com) for further information.

 

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