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Indonesia to revise import regulation amid protests

Publication Date : 13-05-2012


The Indonesian government will revise the newly-launched regulation on the restriction of imports of finished goods amidst complaints from several business associations, a senior trade official said in Jakarta on Friday.

A number of business communities, including big retailers, automotive spare part distributors and foreign pharmaceutical manufacturers, have recently raised concerns over the new import rule as it could severely impact their business due to limited categories of products allowed for import.

The revision, however, would provide flexibility for certain general importers to import various goods from different categories with certain requirements, Trade Ministry’s director general for foreign trade Deddy Saleh said on Friday.

The change would be made because the government acknowledged that due to the nature of its business, certain firms in several sectors, such as automotive, food and beverage and the pharmacy industry, should import many kinds of products under different classifications and the new rule had to accommodate this interest.

“We will allow importation of goods from more than one category as long as [general] importers could prove a “special affiliation” with foreign companies supplying goods to them,” he told reporters during a press conference at his office in Jakarta.

Deddy cited the relation between sole spare part distributors and foreign spare part producers as an example of the “special affiliation”.

The Trade Ministry issued a new regulation on import arrangement last week, aimed at tightening import supervision, boosting investment and accelerating industrialization in Indonesia.

From its regular monitoring, the government has found a wide array of imported products that do not meet official standards, such as the Indonesian National Standard (SNI) and labelling.

Local business players have also long raised concerns over an influx of imported goods in the local market in recent years, which most often are sold at prices lower than locally-made products and gradually find ground in the local market.

Under the new regulation, becoming effective starting from May 1, a general importer (trader) can only import products under the same category under one license. This means that a company will be allowed to only import one category of products. If they want to import several categories of products, they should set up several separate companies.

Previously, a general importer was allowed to import a wide range of products from different categories.

Under the new import arrangement, a producer-importer may import raw materials, intermediary goods and capital goods to support its manufacturing activities. It can also import finished goods for the purpose of market testing and for completing product lines under specific quotas and deadlines issued by the Trade Ministry with recommendations from related institutions, such as the Industry Ministry, Health Ministry and Food and Drug Supervision Agency.

Indonesia currently imports more than 8,000 different types of products under a harmonized system of classification consisting of 21 sections.

Deddy said that the revision would be made immediately, but declined to mention a specific time frame for the issuance.

The prevailing regulation set a deadline of Dec. 31 for local business compliance.


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