Jurisdiction - Indonesia
Reports and Analysis
Indonesia – The Ministry Of Trade Issues Regulation On Rules For Goods Originating From State.

24 February, 2015

 

 
On 14 October 2014, the government issued Regulation of Ministry of Trade No. 77/M-DAG/PER/10/2014 on Rules for Goods Originating from Indonesia (“Regulation No. 77“). Regulation No. 77 has been effective since 1 January 2015.
 
Regulation No. 77 is the first national regulation that stipulates the criteria for declaring that goods originate from Indonesia. The regulation is intended to provide requirements for the government to issue certificates of origin.
 
Under Regulation No. 77, there are two types of rules for goods that originate from Indonesia namely:
 
1. Preferential Rules For Goods Originating From Indonesia
 
Preferential rules for goods originating from Indonesia are used to obtain a reduction or exemption of import duty that is given by the importing country. Preferential rules for goods originating from Indonesia include:
 
a. Preferential rules for goods originating from Indonesia as regulated in a concluded international agreement;
 
b. Preferential rules for goods originating from Indonesia as enacted by the preference granting country.
 
2. Non-Preferential Rules For Goods Originating From Indonesia
 
Non-preferential rules for goods originating from Indonesia are used to satisfy the demand of a country, importer and/or exporter for the exporting goods from Indonesia without getting customs facilities. Non-preferential rules of origin of Indonesia include:
 
a. Non-preferential rules for goods originating from Indonesia as regulated in a concluded international agreement;
 
b. Non-preferential rules for goods originating from Indonesia that are not regulated in a international agreement;
 
Under Regulation No. 77, there are two requirements that must be fulfilled in order to declare that goods originate from Indonesia, as follows:
 
1. Origin Criteria
 
To assess the origin criteria, the issuer will verify details of the following aspects:
 
a. “Wholly Obtain” Aspect
 
The goods are considered to satisfy the “wholly obtain” aspect if the goods entirely consist of Indonesian raw materials or are produced in Indonesia using only raw materials from Indonesia.
 
b. Value Added Content Rule
 
The goods are considered to satisfy the “value added content-rule” if the goods possess added value based on comparison between Indonesian raw materials and imported raw materials.
 
c. Change in Tariff Classification
 
The goods are considered to satisfy the “change in tariff classification” if the Indonesian manufactured goods (produced with imported materials) experience substantial changes which result on the change of tariff classification of Specific Processing Rule. The goods are considered to satisfy the “specific processing rule” if the goods derive from imported raw materials and have undergone a specific production process.
 
2. Consignment Criteria
 
The goods are considered to satisfy the “consignment criteria” if the goods are directly delivered to the importing country without any transit stage, unless:
 
a. the transit is performed due to geographical and technical delivery reasons;
 
b. the goods are not traded or consumed during the transit period; and
 
c. the goods do not undergo any production process during the transit period except for unloading purposes to preserve the quality of goods.
 
The Ministry of Trade has not yet issued any implementing regulations for the Origin and Consignment Criteria for rules for goods originating from Indonesia.
 
Pending issuance of an implementing regulation, there have been policies implemented, for example for applicants who apply for Preferential Rules for Goods originating from Indonesia. In theory, they will be given a Certificate of Origin Form A while applicants who apply for Non-Preferential Rules for Goods Originating from Indonesia will be given a Certificate of Origin Form B.
 
However, if an applicant who applies for a Certificate of Origin Form A fails to meet the requirements set under Regulation 77, the Ministry of Trade may automatically issue the Certificate of Origin Form B to the applicant (even though those applicants did not apply for a Certificate of Origin Form B).
 
We may see more policies being applied in the near future.
 
HHP_logo
 
For further information, please contact:
 
Wimbanu Widyatmoko, Partner, Hadiputranto Hadinoto & Partners
wimbanu.widyatmoko@bakernet.com
 
Mochamad Fachri, Partner, Hadiputranto Hadinoto & Partners
mochamad.fachri@bakernet.com
 
Riza Fadhli Buditomo, Hadiputranto Hadinoto & Partners
riza.fadhli.buditomo@bakernet.com

Comments are closed.