API-P license holders will soon be able to breathe a sigh of relief as the Ministry of Trade has shown concern for importers' challenges by issuing a supplementary regulation to the previous the Minister of Trade regulation No. 70/M-DAG/PER/9/2015 ("Permendag-70") on Importer Identification Number (API). The following are summary of the key elements of the regulation:
- A Complementary Good is a manufactured good imported by an API-P license holder to complement its product lines. The good must be sourced from and manufactured by the foreign entities having special relationship with the API-P license holder. Special relationships is defined as a relation in which one party has the ability to control the other party or has significant influence over the other party, according to the applicable accounting standards.
- A Market Testing Good is a manufactured good imported by the API-P license holder to test the market and is imported only within a specific period / limited time frame and in a limited quantity / volume.
- An After-Sales Services Good is a manufactured good imported by the API-P license holder with the purpose to secure the availability of spare parts and substitute goods of the main (manufactured) products in markets.
- The above three types of imported goods are tradeable and can be transferred to other parties, but cannot be used in the manufacturing process.
- Other than that, the goods must also meet the following requirements:
- they must be imported in a new condition;
- they cannot be manufactured by the API-P license holder; if they could be, or are available in the domestic market, this must be in a limited quantity only; and
- they are in accordance with the API-P license holder's business license.
- Prior to importing such goods, the API-P holders must obtain an Import Approval ("IA") from the Ministry of Trade by submitting an online application to the Director General of Foreign Trade via http//inatrade.kemendag.go.id. The application will be processed within 5 working days upon receipt of the completed and accurate application.
- After obtaining IA, the API-P license holders are required to submit periodic reports. They will also be subject to post compliance audits conducted by the Directorate General of Foreign Trade of the Ministry of Trade.
- The Importer Producer ("PI") licenses currently held by the API-P license holders under the previous Ministry of Trade regulation No.27/M-DAG/PER/5/2012 and 84/M-DAG/PER/12/2012 remain valid until 30 June 2016.
To discuss the above in more detail, please do not hesitate to reach out to your usual PwC contact.