Indonesian Government Relaxes Licensing Requirements for Medical Devices to Combat COVID-19

Since the first COVID-19 case was reported in Indonesia on March 2, 2020, the number of cases has expanded to around 4,839 as of April 14, 2020, with 459 deaths. A number of medical professionals in the country have contracted COVID-19, in part due to a lack of medical devices to diagnose, treat or prevent the virus, as well as personal protective equipment ("PPE") such as gloves, face shields, goggles, face masks and respirators.

In response, the Government has issued several regulations and policies to relax the licensing requirements for the importation and production of medical devices, which is hoped will encourage business actors to support the procurement of the necessary medical equipment to prevent the spread of COVID-19.

Accelerated Issuance of Licenses for Production, Distribution of Medical Devices

The Indonesian Ministry of Health ("MOH") has expedited the application process for the licenses required to produce domestically and distribute certain medical devices and household supplies (Perbekalan Kesehatan Rumah Tangga or "PKRT") to deal with COVID-19. It has (i) accelerated certification services for production and distribution certificates, and (ii) is offering one-day service for Marketing Authorization (Izin Edar).

The medical devices and PKRT being prioritized by the MOH include:

• surgical apparel (face masks, PPE and medical goggles);
• liquid chemical sterilant/high-level disinfectants;
• surgical gloves;
• patient examination gloves;
• clinical electronic thermometers;
• ventilators;
• culture transport medium (VTM/UTM);
• microbiological specimen collection and transport device (Dacron swabs); and
• antiseptic hand sanitizer.

Under these new policies, manufacturers or distributors that wish to produce or distribute the above medical devices and/or PKRT can obtain a production certificate or distribution certificate within one to two days upon fulfilling the (i) statutory payment of Non-Tax State Revenue (Penerimaan Negara Bukan Pajak or "PNBP") to the Government and (ii) submitting the required documents and information.

The MOH has also simplified the required documents and information, so manufacturers or distributors are only required to submit their business identification number (Nomor Induk Berusaha or "NIB"), an application letter, information on the technical person in charge and a statement letter that they will fulfill the required commitments within six months.

Manufacturers that have already obtained a production certificate for certain medical devices and/or household supplies from the MOH can obtain the relevant Marketing Authorization in less than a week upon fulfilling the requirements as stipulated in the MOH's Technical Licensing Guidelines for Medical Devices and Household Supplies. While the MOH has cut the timeline for obtaining Marketing Authorization, it has not changed the required application documents, in order to ensure the quality of medical devices and household supplies distributed in Indonesia. In total, manufacturers should be able to start business operations in approximately one to two weeks.

To accelerate the issuance of production and distribution certificates the MOH is providing services every day from 8 am to 4 pm, Monday to Friday, and from 8 am to noon on Saturdays and Sundays. For the one-day service for Marketing Authorization, the MOH is providing services 24 hours a day, seven days a week until June 30, 2020.

Given the urgency of ensuring the availability of certain medical devices, the Indonesian Capital Investment Coordinating Board (Badan Koordinasi Penanaman Modal or "BKPM") has accelerated the integration of the NIB, industrial business license and MOH operational licenses in order to expedite the licensing requirements for certain medical devices to deal with COVID-19. On March 2, the BKPM launched a new system, the Investment Control and Command Centre (Pusat Komando dan Pemantauan Investasi or "Pusat KOPI"), to monitor all licensing requests through the Online Single Submission system in order to prevent delays in the BKPM licensing process.

Licensing Exemption for Importation and Distribution of Certain Medical Devices

Under new rules issued by the ministries of trade and health, the importation of certain medical devices no longer requires a Surveyor Report from the country of origin of the goods. Also, such goods are no longer subject to restrictions on the port of entry. These exemptions will apply until June 30, 2020.

These new rules are provided in Minister of Trade ("MOT") Regulation Number 28 of 2020 on the Eighth Amendment to MOT Regulation Number 87 M-DAG/PER/10/2015 on Provisions on the Importation of Specific Products dated March 20, 2020. They are also in MOH Decree No. HK.01.07/MENKES/218/2020 on Medical Devices, In Vitro Diagnostic Medical Devices and Household Supplies Exempted from Import Licensing Procedures to Reduce Coronavirus Disease 2019 (COVID-19) dated March 30, 2020 ("MOH Decree No. 01/2020").

The MOH has also issued a regulation to allow business actors to bypass the need for a Marketing Authorization or Special Access Scheme ("SAS") license to distribute certain medical devices. This new rule is contained in MOH Regulation No. 7 of 2020 on the Amendment to MOH Regulation Number 51 of 2014 on the Importation of Medical Devices through the Special Access Scheme dated March 27, 2020 ("MOH Reg. 7/2020").

Under MOH Reg. 7/2020, importers will only be required to obtain a recommendation from the National Disaster Management Agency (Badan Nasional Penanggulangan Bencana or "BNPB"), which they can apply for through the Indonesia National Single Window online system. The list of HS Codes for medical devices eligible for the licensing exemption is contained in MOH Decree No. 01/2020.

Temporary Export Ban for Certain Medical Devices

Alongside encouraging the importation and production of medical devices to combat COVID-19, the Government has also temporarily prohibited the export of certain medical devices, through the issuance of MOT Regulation No. 23 of 2020 regarding Temporary Export Ban on Antiseptic, Mask Raw Materials, PPE and Masks dated March 17, 2020 ("MOT Reg. 23/2020").

Under MOT Reg. 23/2020, business actors cannot export medical devices with HS Codes as stipulated in the attachment of the regulation. That prohibition is in place until June 30, 2020. Anyone who violates the import ban under MOT Reg. 23/2020 shall be subject to criminal sanctions in the form of imprisonment for a maximum of five years and a fine of up to IDR 5 billion, as stipulated in Law Number 7 of 2014 on Trading.

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