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Indonesia's rule on imports of finished goods revised

Publication Date : 18-06-2012

 

The Indonesian government finalised the revision of a newly issued regulation on a finished goods arrangement to better cater for the interests of local business stakeholders, a senior trade official says.

A number of business communities, including large retailers, automotive spare parts distributors and foreign pharmaceutical manufacturers, had previously voiced their objections over the newly launched import arrangements, which became effective last month with a transition period ending December 31, as it would hurt their business due to the limitation of allowable imported products.

The revised regulation, set to take effect in July, would basically contain two basic changes, namely the definition of “special affiliation” and the scope of products, which could be imported by general importers, Trade Ministry director general for foreign trade Deddy Saleh said.

“We’ve omitted the requirement of “special affiliation” in terms of financial and operational relationship and just put “special affiliation” in a general sense,” he said over the weekend in Jakarta.

Saleh referred to mutually-affecting relations regarding an agent – whether a sole distributor or an importer-agent – and foreign partners as an example of the “special affiliation” placed in the revised rule.

In a change from the previous rule, the new rule would also allow general importers to import various types of products from more than one category depending upon the nature of their business, he said.

“We will allow them [general importers] to import goods from more than one section as long as they can reveal the “special affiliation”, which is proven by their foreign principals and endorsed by our trade attaches or our official representatives overseas,” Saleh said.

This past May, the government set a new arrangement on finished goods importation under the regulation of importer identification numbers, which differentiates scopes of importation allowable for general importers and producer importers.

The regulation replaced a 2010 Trade Ministerial Regulation on the importation of finished goods, of which one article was recently annulled by the Supreme Court because it was considered as encouraging imports at the expense of supporting domestic production.

The new arrangement has seemingly come as an answer to concerns raised by domestic business players who have been cautious over the influx of imported finished goods products flooding the domestic market sold at cheaper prices, which could encourage business players to import rather than investing in the country.

In line with this, the government also expects to place stricter measures on imports because imported products do not comply with the Indonesian National Standards.

 

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