A Look at Indonesian Trade Regulations on Importer Identification Numbers

Indonesia's Ministry of Trade (MOT) recently issued new regulations on Importer Identification Numbers.

Special Importer Identification Number

The MOT has revoked the requirement for importers to obtain a Special Importer Identification Number (NPIK) for the import of certain products such as textiles, shoes and electronics. The NPIK requirement had been stipulated in Minister of Industry and Trade Decree No. 141/MPP/Kep/3/2002 regarding NPIK, as amended by MOT Decree No. 07/M-DAG/PER/3/2008 and Decision of Director General of Foreign Trade No. 05/DJPLN/KP/III/2002 regarding Certain Types of Imported Goods for which an NPIK is Mandatory.

The revocation of this requirement for certain products is found in MOT Regulation No. 50/M-DAG/PER/7/2015 (MOT Reg 50/2015). MOT Reg 50/2015 revokes the aforementioned regulations related to the NPIK and also declares that NPIKs issued under these previous regulations are null and void. The NPIK is deemed as no longer relevant as a license for import restrictions.

Importer Identification Number

The provisions on Importer Identification Number (API) are now regulated under MOT Regulation No. 70/M-DAG/PER/9/2015 (MOT Reg 70/2015), which became effective on January 1, 2016.

MOT Reg 70/2015 revokes MOT Regulation No. 27/M-DAG/PER/5/2012 regarding the Provisions on Importer Identification Number, as lastly amended by MOT Regulation No. 84/M-DAG/PER/12/2012 (together, MOT Reg 27/2012).

Just like MOT Reg 27/2012, MOT Reg 70/2015 recognizes two types of API, namely: (i) General Importer Identification Number (API-U), which is granted to companies that import certain goods for trading purposes, and (ii) Producer Importer Identification Number (API-P), which is granted to companies that import goods for their own use as capital goods, raw materials, supporting materials and/or materials to support their production process.

One importer may have only one type of API, either an API-U or an API-P, which is valid for import activities within Indonesian territory.

MOT Reg 70/2015 deletes the provision that only goods within the same section of the Indonesian Goods Classification System can be imported under an API-U. The previous provision stipulated that if importers intended to import goods from more than one section of the Goods Classification System, the importer was required to import such goods from an overseas company with a special relationship with the importer, or the importer had to be a business entity partially or entirely owned by the state.

MOT Reg 70/2015 does not limit the importation of goods from within various sections of the Goods Classification System, as long as the goods are in line with the Trading Business License (SIUP) of the company holding the API-U. Therefore, the new API-U format no longer sets out information on the sections of goods.

MOT Reg 27/2015 no longer recognizes the Importer Producer designation. This caused concern among companies holding an API-P, particularly manufacturing companies that import finished products as complementary goods and for test market purposes, because the deletion of the Importer Producer provisions meant they were no longer able to import finished products for trading purposes. Importer Producer designations issued under MOT Reg 27/2012 remain in effect until their expiration.

API-U and API-P issued under MOT Reg 27/2012 remain in effect, but holders were required to adjust them to the provisions of MOT Reg 70/2015 by June 30, 2016.

Import of Complementary Goods, Goods for Test Market Purposes and After-Sales Service

The issue of the importation of complementary goods and goods for test market purposes was addressed with the issuance of MOT Regulation No. 118/M-DAG/PER/12/ regarding Provisions on the Importation of Complementary Goods, Goods for Test Market Purposes and After-Sales Service (MOT Reg 118/2015).

MOT Reg 118/2015, which became effective on January 1, 2016, allows companies that have an API-P to import manufactured goods (barang manufaktur) insofar as such goods are needed for developing their business and investment. The imported manufactured goods may be traded and/or transferred to other parties. They may not be used in the production process and may only be used as (a) complementary goods, (b) for test market purposes, and/or (c) for after-sales services.

There are certain criteria to be met for each type of goods mentioned above. Complementary goods are manufactured goods imported by companies holding an API-P for the purpose of completing their product line, originating from and produced by a company overseas that has a special relationship with the company holding the API-P. Goods for test market purposes are manufactured goods that cannot be produced by the company holding the API-P and are imported to gauge market reaction and for the development of the API-P holder's business within a certain period of time. While goods for after-sales service are manufactured goods imported by companies holding an API-P to guarantee the availability of spare parts, replacement products, and substitute products that relate to the main products.

To import manufactured goods as complementary goods, for test market purposes, and/or for after-sales service, a company holding an API-P must obtain an Import Approval (no longer an Importer Producer designation, the term recognized under MOT Reg 27/2012), from the MOT through the Director General of Foreign Trade by submitting an application electronically through http://inatrade.kemendag.go.id, accompanied by supporting documents, including: (a) evidence of a special relationship with the company overseas, specifically for the import of complementary goods, and (b) a recommendation from the supervising technical ministry, such as the Ministry of Industry.

Special relationship as referred to above is defined as a relationship between the company holding the API-P with a company overseas whereby one party has the ability to control the other party or has a significant impact on the other party in accordance with the applicable accounting standards, which can be in the form of (i) a contractual agreement to share control over an economic activity; (ii) share ownership; (iii) articles of association; (iv) an agency/distributor agreement; (v) a loan agreement; or (vi) a supplier agreement.

The validity period for the Import Approval will be in line with the validity period set out in the recommendation issued by the supervising technical ministry.

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