KADIN INDONESIA
Indonesian Chamber of Commerce and Industry
Indonesia’s Coordinating Minister for Economic Affairs has affirmed that the government has been continuously engaging in various efforts aimed at protecting the country’s domestic industries, particularly those that fall under the micro-, small- and medium-scale enterprises (Usaha Mikro Kecil Menengah – “SMEs”) classification, from the phenomenon of predatory pricing deriving from imported products, particularly products that are sold at prices below the average market value through e-commerce platforms.[1] Amongst others, the aforementioned protection efforts involve the imposition of further strict measures aimed at controlling the entry of imported goods and the revision of the prevailing import governance regime in comparison with that originally featured under the framework of Regulation of the Minister of Trade (“Minister”) No. 20 of 2021 on Import Policies and Arrangements, as amended by Regulation of the Minister No. 25 of 2022 (collectively referred to as “Regulation 20/2021”).[2]
The abovementioned revised import policy, which ultimately aims to improve the effectiveness of import controls, has been introduced through the issuance of Regulation of the Minister No. 36 of 2023, which bears the same title as Regulation 20/2021 (“Regulation 36/2023”) and which is set to come into force on 11 March 2024.[3] While the enforcement of Regulation 36/2023 itself has consequently resulted in the repeal and replacement of Regulation 20/2021, it should be noted that any implementing regulations to the now-revoked Regulation 20/2021 will remain in force provided that the provisions contained therein do not contradict Regulation 36/2023.[4]
In addition to the revocation of Regulation 20/2021, Regulation 36/2023 has also simultaneously repealed and replaced various import-related regulatory frameworks that were previously issued by the Minister. Said revoked frameworks break down as follows:[5]
Comprising 72 articles spanning 21 chapters, Regulation 36/2023 covers a wide range of aspects that aim to strengthen the efficiency of import controls. One major area that has now been adjusted under the framework of Regulation 36/2023 is the restructuring of import supervision from post-border to border for certain types of commodities (e.g. electronics, footwear and ready-made garments, as well as cosmetics and traditional medicines).[6] Moreover, Regulation 36/2023 also further addresses the relaxation of imports of personal goods, as undertaken by Indonesian migrant workers (Pekerja Migran Indonesia - “PMI”), who have often been faced with constraints as a result of various prohibitions and/or restrictions and the new rules serve as a recognition of PMI contributions, particularly in generating foreign exchange earnings and remittances.[7] In this regard, it should be noted that this relaxation for imported goods belonging to PMI took effect immediately upon the promulgation of Regulation 36/2023, specifically on 11 December 2023.[8]
Given the significant impact of Regulation 36/2023 upon a diverse range of parties who engage in import activities, this edition of Indonesian Law Digest (ILD) offers a summary of the various provisions set out under Regulation 36/2023 that focuses on the new applicable requirements and obligations and also provides a comparison with provisions set out under the previous framework of Regulation 20/2021 in order to highlight the various adjustments that have been provided under Regulation 36/2023. In order to ensure a thorough and concise discussion of these matters, our analysis has been broken down into the following sections:
I. General Import Requirements
II. Newly Introduced Business Licensing to Support Business Activities (Perizinan Berusaha untuk Menunjang Kegiatan Usaha - “PB UMKU”) Requirements
A. Issuance of PB UMKU
B. Changes to and Extension of PB UMKU
C. Cancellation and Revocation of PB UMKU
III. Import Requirement Exemptions
IV. Miscellaneous Import Aspects
A. Imports of Goods Exempted from Import Policies and Provisions
B. Imports of Goods in Used Condition
C. Temporary Importation with or without Non-Re-export Settlements
D. Imports of Manufactured Goods as Complementary Goods, Market Tested Goods and/or After-Sales Services Goods (collectively referred to as “Manufactured Goods”)
V. Reporting Obligations
VI. Applicable Administrative Sanctions
Individuals, institutions or business actors (collectively referred to as - “Importers”) who are planning to import goods are first required to secure Business License Numbers (Nomor Induk Berusaha - “NIB”) that simultaneously serve as Import Registration Numbers (Angka Pengenal Importir - “API”).[9] In this regard, Regulation 36/2023 further clarifies that NIB are exclusively granted to the main offices of businesses and are only applicable to branch offices that are involved in similar business activities.[10]
As originally featured under Regulation 20/2021, a total of two types of API are available from which Importers are required to select one, as follows:[11]
Both Regulation 20/2021 and Regulation 36/2023 stipulate that goods that are imported through the use of API-P are prohibited from being traded with or transferred to any other individuals.[12] However, Regulation 36/2023 has now broadened the categories of goods that are exempted from this prohibition, as originally set out under the framework of Regulation 20/2021. These exemptions are summarized in the table below:
| API-P Imported Goods Exempted from the Prohibition on Trade and Transfers | Regulation 20/2021[13] | Regulation 36/2023[14] |
| Leftover raw materials and/or auxiliary materials | √ | √ |
| Capital goods imported in a new condition that are used for a maximum period of two years | √ | |
| Manufactured goods that are used as complementary goods for market testing and/or after-sales service | √ | |
| Goods that are traded/transferred by holders of the following: 1) Oil-and-gas processing business licenses; and/or 2) Oil-and-gas trading business licenses | √ |
In addition, Regulation 36/2023 also grants Importers the right to convert their NIB that originally functioned as API-U into API-P via the Online Single Submission (“OSS”) system. However, reasons must be given for requests for such conversions,[15] while said conversions may only be carried out in line with the following conditions:[16]
It should also be noted that any goods that are imported prior to such a conversion may be traded/transferred.[17] Meanwhile, any business license that was previously issued prior to such a conversion will be automatically revoked and declared invalid via the INATRADE system.[18]
In addition to the above-outlined general requirements, Importers are also obliged to secure PB UMKU that serve as applicable permits within the import sector prior to entries of goods into customs areas.[19] Said PB UMKU are only required for certain types of goods, as comprehensively outlined under Appendices I and II to Regulation 36/2023, and comprise the following:[20]
Under the new framework of Regulation 36/2023, Importers are now permitted to secure more than one of the above-mentioned types of PB UMKU.[21] Moreover, while registered Importers and registered producers can only be used for one import customs notification (“Customs Notification”), import approvals can be used for the submission of one or more Customs Notification.[22]
In order to secure PB UMKU, Importers should submit their complete applications via the electronic Indonesia National Single Window system (“SINSW”) in order to be forwarded to the INATRADE system. Prior to any such submission, Importers are initially required to register an account via SINSW in order to secure access rights by uploading scanned copies of the original required documents in accordance with Importer type.[23]
Regulation 36/2023 has revised the available types of Importers, which now include the following:[24]
The following table sets out the required documents that need to be uploaded by each of the above-mentioned Importers in order to secure access rights:[25]
| Required Documents | Classification of Importers | |||
| A | B | C | D | |
| Tax Identification Number (Nomor Pokok Wajib Pajak/NPWP) | √ | √ | √ | √ |
| Personal Identification Number (Nomor Induk Kependudukan/NIK) | √ | |||
| NIB | √ | |||
However, it should be noted that Importer A may choose either of the above-required documents. Moreover, Importers are no longer obliged to upload said documents to SINSW if the corresponding ministries/government agencies already possess electronic versions of the results of scanned documents, data elements and/or business actor recognition/determination statuses.[26]
In addition, Importers should also provide statement letters that assume responsibility for the validity and conformity of the above-outlined documents, including relevant data and/or information, during the submission of applications via SINSW.[27] Moreover, if any inaccuracies are discovered, then Importers will be subject to the imposition of sanctions in accordance with applicable laws and regulations.[28]
Importers are allowed to make changes to various data elements of PB UMKU that have been issued through the submission of applications via SINSW and by uploading scanned copies of the necessary original documents.[29] While retaining the overall requirements for changes that were originally addressed under Regulation 20/2021, Regulation 36/2023 no longer requires Importers to submit said applications within thirty days.[30]
With regard to the above-mentioned changes, the specific data elements that may be subject to modifications break down as follows:[31]
Under the new framework of Regulation 36/2023, any changes that are made to tariff posts/harmonized systems and/or unit numbers of goods for specific serial numbers of goods, as stated in Import Approvals, are only available in line with the following conditions:[32]
Furthermore, Regulation 36/2023 has also now clarified the validity periods of the above-outlined data changes if applications are ultimately granted approvals, as outlined in the table below:
| Relevant Data Elements of PB UMKU | Validity Period |
| Tariff posts/harmonized systems, types/descriptions of goods and quantities and unit numbers of goods[33] | Remain unchanged from first issued PB UMKU |
| NIB that are applicable as API-P and API-U, including Importers’ identities, countries of origin and destination ports[34] | From the issuance dates of the changes (i.e. before or on the same date as the relevant BC 1.1 manifest document) until the relevant expiry dates of initially issued PB UMKU |
As with applications for changes, if PB UMKU validity periods are about to expire, then Importers may also apply for an extension by uploading scanned copies of the necessary original documents. In this regard, Regulation 36/2023 specifies that said applications can be submitted up to thirty days prior to the expiration dates of PB UMKU.[35] Moreover, Regulation 36/2023 also clarifies that if such applications are declared complete but the relevant extensions have still not been issued by the time that a PB UMKU expires, then an electronic extension will be automatically generated through SINSW.[36]
As originally addressed under Regulation 20/2021, Importers are permitted to cancel processes of issuance, change and extension for licenses via SINSW.[37] However, under the new framework of Regulation 36/2023, said cancellations can only be made prior to approvals for issuance, change and extension applications being issued by the Minister.[38]
It should also be noted that Importers will receive notification via SINSW regarding any cancellations and revocations in cases where mistakes are made regarding authority, procedures and/or substance in relation to the following matters:[39]
| Cancellation[40] | Revocation[41] |
| PB UMKU that have been issued | |
| Imports that have not commenced or that are currently being carried out | Imports that have already commenced or that are currently being carried out |
Moreover, if goods are currently in the process of being shipped or transported, then the revocation of PB UMKU will take place after the completion of the relevant customs clearances for such goods.[42] In this regard, a relevant Importer will also be required to submit a statement confirming their commitment to refraining from initiating the shipping process for any goods other than those that have already been shipped.[43]
Newly introduced under Regulation 26/2023, exemptions are available to the various import requirements outlined above for certain types of imports that fall into two specific categories (i.e. imports that are completed in relation to non-commercial and commercial activities) in line with specific conditions. However, it should be noted that said exemptions are only applicable to the following types of imports:[44]
The tables below outline the various exemptions that are now available under the framework of Regulation 36/2023:
| Imports for Non-Commercial Purposes | |
| Import Type | Exemption Conditions |
| Imports of free-import goods by Importers who are unable to secure NIB as API[45] | A total of 18 types of free-import goods can still be imported, including: 1) Promotional goods; 2) Goods for research purposes and the development of knowledge; 3) Consignment goods by PMI; 4) Non-commercial, sample goods; 5) Personal belongings of Indonesian citizens who are moving address, as proven through certificates issued by official representatives of the Indonesian Government who are located abroad; 6) Personal belongings of foreign citizens who are moving address; and so forth.
It should be noted that free-import goods do not require certificates to be secured from the Director-General of Foreign Trade (“Director-General”). Moreover, the types of goods that are specifically outlined in points (3), (5) and (6) may be imported in a non-new condition. |
| Imports of goods subject to import restrictions by Importers who are unable to secure NIB as API[46] | Importers who are unable to secure NIB as API are still permitted to import goods that are subject to import restrictions if said imports are conducted for non-business purposes. The scope of said goods is comprehensively outlined under Appendix IV to Regulation 36/2023.
Furthermore, such imports may also be exempted from various verification and/or destination port restrictions. However, certificates must be secured from the Director-General for said imports. |
| Imports of goods subject to import restrictions by Importers who are able to secure NIB as API[47] | Importers who are able to secure NIB as API and who are engaging in imports of goods subject to import restrictions for non-business purposes are exempted from the requirement to secure PB UMKU, as well as the requirement to secure verifications and/or comply with destination port restrictions, provided that said parties have secured certificates from the Director-General.
The scope of goods for this import type is comprehensively outlined under Appendix V to Regulation 36/2023. |
| Imports of goods subject to import restrictions in the form of consignment goods of PMI by Importers who are unable to secure NIB as API[48] | In cases where imports of goods are subject to import restrictions and take the form of goods that are sent by PMI, Importers who are unable to secure NIB that function as API are excluded from the requirement to secure NIB and/or PB UMKU, as well as the requirement to secure verifications and/or comply with destination port restrictions. It should be noted that this exemption applies only to goods that are not in a new condition.
The scope of goods for this import type is comprehensively outlined under Appendix III to Regulation 36/2023. |
| Imports for Commercial Purposes | |
| Import Type | Exemption Conditions |
| Imports of goods subject to import restrictions by Importers that have secured NIB as API[49] | Importers who are able to secure NIB as API and who are engaging in imports of goods subject to import restrictions for business purposes may also be exempted from the requirement to secure PB UMKU, as well as the requirement to secure verifications and/or comply with destination port restrictions, provided that said parties have first secured certificates from the Director-General.
The scope of goods for this import type is comprehensively outlined under Appendix VI to Regulation 36/2023. |
In order to secure the abovementioned certificates from the Director-General, Importers are required to submit their applications via SINSW. In this regard, Regulation 36/2023 retains the overall procedure for the securing of such certificates that were originally set out under Regulation 20/2021.[50] In addition, Regulation 36/2023 has now clarified that said certificates are applicable for one or more Customs Notifications and are specifically used for:[51]
Moreover, Regulation 36/2023 also grants Importers the right to cancel the processing of certificate applications prior to their issuance via SINSW by uploading a statement letter outlining their approval for said cancellation.[52]
Under the new framework of Regulation 36/2023, a total of four types of imports are exempted from various import policies and provisions. However, it is important to note that said exemptions do not exempt the relevant business actors from the requirement to secure PB UMKU. As such, the following table highlights the various requirements that apply to each of the above-mentioned four import types:
| Import Type | Remarks |
| Entries and releases of goods into and from KPBPB[53] | Regulation 36/2023 still retains the various requirements for entries and releases of goods into and from KPBPB that were originally set out under Regulation 20/2021. However, Regulation 36/2023 now mandates that applications for the issuance of PB UMKU should be submitted via SINSW by business actors in KPBPB or other locations within customs areas who own or receive the goods in question. |
| Imports and releases of goods into and from Special Economic Zones (Kawasan Ekonomi Khusus - “KEK”)[54] | A total of nine types of goods are exempted from the applicable import policies and provisions, including the following, among others: 1) Releases of goods produced in KEK to other locations within customs areas; 2) Goods that remain after the completion of the production process or goods that result from processes of destruction that are undertaken in KEK; 3) Goods that remain after the completion of business activities in KEK, such as waste/scrap; and so forth.
Applications for the issuance of PB UMKU should be submitted via SINSW by business actors in KEK or other locations within customs areas who own or who will receive the relevant goods. |
| Imports and releases of goods into and from Bonded Storage Areas (Tempat Penimbunan Berikat - “TPB”)[55] | A total of nine types of goods are exempted from the applicable import policies and provisions, including the following, among others: 1) Goods produced in bonded zones; 2) Goods that remain after the completion of the production process or goods that result from processes of destruction that are undertaken in bonded zones; 3) Goods that remain after the completion of processes of destruction that are undertaken in bonded warehouses; 4) Goods that remain after the completion of simple activities, such as waste/scrap in bonded logistics centers and/or bonded warehouses; and so forth.
Applications for the issuance of PB UMKU should be submitted by TPB business actors, Importers or business actors in other locations within customs areas who own or who will receive the relevant goods. |
| Imports of goods for the purpose of import facilitation for export release[56] | Import policies and provisions specifically exempt imports of goods and/or materials that will be processed, assembled or installed under export release schemes. |
In essence, both Regulation 20/2021 and Regulation 36/2023 require Importers to import goods in a new condition,[57] however, the Minister may stipulate that goods may be imported in a used state in line with certain conditions, as set out under both frameworks.[58] Under the latter framework, however, the classification of said goods has now been broadened to encompass a total of four categories, as summarized in the following table:
| Categories of Goods Permitted to Be Imported in Used Condition | Regulation 20/2021[59] | Regulation 36/2023[60] |
| Used capital goods that cannot be sourced domestically and that will be used during industrial production processes in line with export development, enhanced competitiveness, enhanced business efficiency, infrastructure development and/or re-exports | √ | √ |
| Used goods or equipment that will be used for recovery and rebuilding purposes in the wake of natural disasters, as well as used goods that are utilized for other purposes, as stipulated under applicable laws and regulations | √ | √ |
| Used goods in the form of remnants, scraps or rejected items that are not classified as either hazardous or toxic waste and that are imported for industrial raw materials and/or auxiliary purposes | √ | |
| Goods that are imported for specific purposes | √ |
It is important to note that imports of used capital goods for the purpose of industrial relocation require specific industrial relocation import approvals to be secured.[61] Moreover, imports of used capital goods for the purpose of dispensation require general import approvals to be secured.[62] In this regard, provisions that relate to applications for the issuance of, changes to or extension of said import approvals are identical to those outlined in the previous section above.[63]
While temporarily imported goods were not subject to the general import policies and provisions, as originally addressed under Regulation 20/2021, Regulation 36/2023 has now revised the conditions that apply in order for goods to be deemed eligible for said temporary imports.[64] The following table presents a comparison between the eligibility conditions, as featured under both frameworks:
| Eligibility Conditions for Temporary Imports | Regulation 20/2021[65] | Regulation 36/2023[66] |
| Imported goods that are required during the implementation of government projects | √ | √ |
| Imported goods that suffer severe damage during their use | √ | |
| Imported goods that will be donated to the central government | √ | √ |
In addition, Regulation 36/2023 also states that the above-outlined conditions also exempt imported goods from the obligation to meet the PB UMKU requirements and/or requirements relating to verifications or technical assessments.[67] Meanwhile, certain temporary imports of used capital goods will be subject to specific import requirements, as comprehensively outlined under Appendix II to Regulation 36/2023.[68]
While retaining the mandate for imports of manufactured goods, which can only be carried out by business entities who possess NIB as API and who have also secured certificates from the Director-General, as originally set out under Regulation 20/2021,[69] the newer framework of Regulation 36/2023 has now clarified that said imports may be completed in relation to two types of goods (i.e. free-import goods and goods subject to import restrictions).[70] In addition, Regulation 36/2023 has also introduced various new requirements that relate to said types of goods and that are required to be fulfilled by Importers, including requirements that relate to the implementation of the various matters highlighted in the table below:
| Free-Import Manufactured Goods[71] | Goods Subject to Import Restrictions[72] |
| Can only be carried out by business entities who possess NIB as API-P after securing certificates from the Director-General and who have special relationships with foreign companies | Can only be carried out by business entities who possess NIB as API-P after securing import approvals from the Director-General and who have special relationships with foreign companies. Said business entities are also exempted from the obligation to secure import approvals for goods that are subject to the various import policies and provisions that are outlined under Appendix I to Regulation 36/2023 |
| Prohibited from being traded and/or transferred to other parties | |
| Procedures for the issuance of, changes to, cancellation of and revocation of certificates remain the same as applications for certificates for import exemptions, as outlined above | Procedures for the issuance of, changes to, cancellation of and revocation of import approvals remain the same as procedures for the issuance of PB UMKU, as outlined in the previous section above |
Among other obligations, both Regulation 20/2021 and Regulation 36/2023 require Importers to submit monthly mandatory reports (i.e. import realization reports and distribution realization reports for imported goods or processed/produced imported goods). Said reports should be submitted by no later than the fifteenth day of the following month via SINSW.[73]
However, newly introduced under Regulation 36/2023, submissions of import realization reports depend on the types of documents (i.e. PB UMKU and surveyors’ reports) that the relevant Importers are in possession of. An elaboration of the new provisions is summarized in the table below:
| Types of Documents Secured by Relevant Importers | Submitted Import Realization Reports |
| Encompass: 1) Registered Importers or Manufacturer Importers; 2) Import approvals; and 3) Surveyors’ reports[74] | Import approval |
| Encompass: 1) Registered Importers or Manufacturer Importers; and 2) Import approvals[75] | |
| Encompass: 1) Registered Importers or Manufacturer Importers; and 2) Surveyors’ reports[76] | Registered Importer or Producer Importer |
| Encompass: 1) Import approvals; and 2) Surveyors’ reports[77] | Import approval |
In addition to the above-described reports, both Regulation 20/2021 and Regulation 36/2023 also require the submission of import realization reports by Importers who have secured certificates for import exemptions.[78] In this regard, Regulation 36/2023 further clarifies that Importers will not be required to submit said reports for the following month, provided that they have completed and submitted the required reports for certificates that are valid for a single submission of a Customs Notification.[79]
Ultimately, the issuance of Regulation 36/2023 has resulted in the revision of the available forms of administrative sanctions that can be imposed in relation to non-compliance with the above-outlined import policies and provision mandates. In this regard, the applicable administrative sanctions outlined under Regulation 36/2023 can be lifted once Importers bring their operations into compliance with said mandates. The following table sets out a comparison between the two frameworks of Regulation 20/2021 and Regulation 36/2023 as regards this area:
| Form of Administrative Sanction | Regulation 20/2021[80] | Regulation 36/2023[81] |
| Electronic warnings via SINSW | √ | √ |
| Suspension and revocation of the issuance of, changes to and extension of PB UMKU | √ | √ |
| Recommendation for the suspension of verification or technical assessment services | √ | √ |
| Suspension of certificates that are valid for single or more than one submission of customs notifications | √ | |
| Suspension of the issuance of certificates for import exemptions | √ | |
| Recommendation for the revocation of NIB as API | √ | √ |
| Revocation of certificates for import exemptions | √ | √ |
| Suspension of verification or technical assessment services | √ | |
| Suspension and/or revocation of surveyors’ reports | √ |
Amidst ongoing efforts that are being made by the government to restructure the domestic trade system in order to establish a fair and favourable trade environment, the refinement of import policies and provisions through the issuance of Regulation 36/2023 represents a strategic move by the Indonesian Government aimed at safeguarding the interests of domestic industries, particularly local UMKMs, against the challenges posed by imported products within the context of an ever-expanding, global digital ecosystem. In this regard, Regulation 36/2023 offers more detailed and specific provisions that address various import mechanisms for goods in line with special circumstances. These new provisions should hopefully strengthen the competitiveness of domestically produced Indonesian products and should consequently minimize the need to import any products that can be manufactured domestically.
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