A recent press release issued by the Ministry of Trade (“Ministry”) asserts that an influx of illegally imported goods is threatening the resilience of the country’s domestic industries. In addition to not meeting the required standards (i.e. Indonesian National Standards [Standar Nasional Indonesia/SNI]), these illegal products are also being sold at significantly lower prices than their domestic counterparts. As a result, many textile factories are closing while high numbers of workers are being laid off and state revenue is declining. [1]

In response to these issues, the Minister of Trade (“Minister”) recently established the Task Force for the Supervision of Certain Goods Subject to Import Regulations (“Task Force”) through the issuance of Decree of the Minister No. 932 of 2024 (“Decree 932/2024”). The Task Force is expected to increase the effective supervision of the circulation of certain types of goods subject to import regulations (collectively referred to as “Imported Goods”) that do not comply with the provisions set under Regulation of the Minister No. 36 of 2023 on Import Policy and Provisions, as amended several times, most recently by Regulation No. 8 of 2024 (“Regulation 36/2023”).[2] In specific, the implementation of supervision functions through the Task Force is said to specifically targets importers and/or distributors of illegal Imported Products through ports, instead of small traders or retailers.[3]

While Decree 932/2024 has been in force since 18 July 2024, the Director-General of Consumer Protection and Trade Compliance at the Ministry of Trade has stated that the Task Force will commence operations on 24 July 2024.[4] The working period of the Task Force runs until 31 December 2024. [5]

Duties of the Task Force

The Task Force will be responsible for carrying out the following duties:[6]

In carrying out the above-listed duties, the Task Force may coordinate and/or involve business associations through the Indonesian Chamber of Commerce and Industry (Kamar Dagang dan Industri Indonesia – “FORUM”).[7] The Chief Executives and/or members of the Task Force may also establish technical teams that operate under their various institutions.[8]

As additional information, the Chief Executives and members of the Task Force comprise the following parties:[9]

The composition of the Task Force, as outlined above, will hopefully prevent the overlapping of duties among the relevant institutions. Moreover, the Task Force will serve as a coordinating platform for use by relevant agencies in order to increase supervision of illegal imports.[10]

Types of Targeted Imported Goods

One of the duties of the Task Force will be to perform supervision activities in relation to illegal imports. Said activities will performed based on frequency and/or a specified basis, as follows:[11]

However, it should be noted that supervision activities, as undertaken by the Task Force, are limited to certain types of Imported Goods, which encompass:[12]

1. Textiles and textile products;
2. Ready-made clothing and accessories;
3. Ceramics;
4. Electronics;
5. Footwear;
6. Cosmetics; and
7. Other finished textile goods.

However, based on decisions of Task Force coordination meetings, the scope of Imported Goods under supervision may be modified. Meanwhile, any adjustments that are made to the list of types will be stipulated through official Decrees of the Minister.[13]

The possibility of such adjustments, as outlined under Decree 932/2024, may result in the list of possible supervision objects being expanded. For reference, the list of goods for which imports are limited is currently set out under Appendix I to Regulation 36/2023.

Destruction of Imported Goods

Imported Goods that do not comply with relevant Laws and Regulations may be destroyed in the presence of the Task Force, while the cost associated with any such destruction will be borne by the relevant importers.[14]

Currently, Regulation 36/2023 also sets out certain consequences for imports of goods that do not comply with its provisions. Specifically said imports should be re-exported, destroyed, withdrawn from distribution or subject to other mechanisms set under the relevant Laws and Regulations. All costs associated with these consequences will also be borne by the relevant importers.[15]

Key Takeaways

Claimed to specifically target importers and/or distributors of illegally Imported Products who import goods through ports, instead of small traders or retailers, the implementation of the Task Force’s supervision functions is expected to increase caution among importers by encouraging them to comply more rigidly with relevant trade regulations. By curbing the ongoing influx of substandard illegal imports, the new policy should hopefully foster a more level playing field, increase demand for high-quality, domestically produced products within the marketplace and ensure that standardized Imported Goods reach consumers.