Indonesian Export Regulations: Ensuring Compliance for International Trade

Posted 18 September 2023

Jack Wiston

Indonesia is a major exporter of a wide range of goods, including natural resources, agricultural products, and manufactured goods. As such, it is important for exporters to comply with all applicable Indonesian government laws and regulations.

Overview of the Indonesian Export Regulatory Framework

The primary Indonesian law governing exports is Law No. 10 of 1995 on Customs and amended by Law No. 17 of 2006 (the “Customs Law“). The Customs Law is implemented by a number of regulations, including Regulation of the Minister of Finance No. 32/PMK.04/2012 on Export Procedures (the “Export Procedures Regulation“).

In addition to the Customs Law and Export Procedures Regulation, there are a number of other Indonesian laws and regulations that may apply to exports, depending on the specific goods being exported. For example, the Law on Forestry (Law No. 41 of 1999) and the Law on Mining (Law No. 4 of 2009) impose restrictions on the export of certain forestry and mining products.

Acquiring a License for Exporting from Indonesia

To export goods from Indonesia, it is mandatory for exporters to obtain a business license from the Ministry of Trade. Exporters must also register with the Indonesian Customs and Excise Directorate General (DJBC) and obtain an exporter identification number (EIN).

To obtain an export license, exporters must submit an application to the Directorate General of Foreign Trade at the Ministry of Trade. The application must be accompanied by supporting documents, such as a commercial invoice, packing list, and certificate of origin.

The processing time for export licenses may vary based on factors like the type of goods and destination country, but a general estimate is at least two weeks.

Licensing and administration is governed by Law No. 7 of 2014 on trade, as well as other supporting regulations, such as:

Regulation of the Minister of Trade No. 18 of 2021 on Export Prohibited Goods and Import Prohibited Goods
Regulation of the Minister of Trade No. 40 of 2022 on Amendments to Regulation of the Minister of Trade No. 18 of 2021 on Export Prohibited Goods and Import Prohibited Goods
Regulation of the Minister of Finance No. 205/PMK.010/2019 on Export-Import Customs Procedures

Keep in mind that certain goods may be exempt from licensing requirements, especially if a trade agreement with the destination country waives this obligation.

Additional Requirements

Once the necessary business licenses and registrations are obtained, exporters must file a customs export declaration (PED) with the DJBC. The PED must provide comprehensive information about the goods being exported, including the quantity, value, and destination country.

Depending on the specific goods being exported, additional permits or licenses from other government agencies might be necessary. For example, exporters of agricultural products may need to obtain a phytosanitary certificate from the Ministry of Agriculture and exporters of food products may need to obtain a halal certificate from the Indonesian Ulema Council (MUI).

General documentation required to accompany the exported goods includes:

Commercial invoice
Packing list
Certificate of origin
Bill of lading or airway bill
Insurance certificate
Any other documents required by the destination country

Compliance with Indonesian Export Regulations

Exporters must take all necessary steps to ensure that their exports comply with all applicable Indonesian laws and regulations. This includes:

Obtaining all required business licenses and registrations
Filing accurate and complete customs export declarations
Obtaining all required permits and licenses from other government agencies, as applicable
Ensuring that the goods being exported meet all applicable quality and safety standards
Declaring the full value of the goods being exported
Paying all applicable export duties and taxes

Non-compliance can lead to severe penalties, including fines up to IDR 5 billion, imprisonment up to 5 years, and the confiscation of goods and business license.

Recent Changes to Indonesian Export Regulations

In recent years, the Indonesian government has made a number of changes to its export regulations. These changes are designed to boost Indonesia’s export competitiveness and to promote domestic processing of natural resources.

A notable change came into effect in August 2023 with Government Regulation No. 36 of 2023 on Export Proceeds from Natural Resources Business Activities, Management, and/or Processing. This regulation made a requirement for exporters of certain natural resources such as mining, plantation, forestry and fishing to retain 30% of their export earnings in a domestic bank account.

Another significant change is the imposition of export bans on certain natural resources, such as nickel ore and bauxite. These export bans are intended to promote the development of domestic downstream industries. Law No. 7 of 2014 prohibits the export of certain raw materials, and also gives power to the government to ban the export of any natural resource if essential for national interest.

Exporters should carefully review all applicable Indonesian export regulations to ensure that they are in compliance.

Conclusion

Compliance with Indonesian government laws and regulations is essential for exporters. Exporters who fail to comply may face a number of penalties, including fines, imprisonment, and the seizure of their goods.

Exporters should carefully review all applicable Indonesian export regulations to stay up-to-date and take all necessary steps to ensure that their exports comply with both Indonesia and the chosen destination country.

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