WORLD TRADE  
ORGANIZATION  G/LIC/Q/IDN/14 
6 April 2009 
 (09-1679) 
Committee on Import Licensing Original:   English 
  
 
NOTIFICATION UNDER ARTICLES OF THE AGREEMENT ON  
IMPORT LICENSING PROCEDURES FROM INDONESIA
1 
 
Replies from INDONESIA to Ques tions from the UNITED STATES  
and the EUROPEAN COMMUNITIES2 
 
  The following communication, dated 23 March 2009, has been received from the delegation of 
Indonesia.  
_______________ 
 
  Indonesia wishes to refer to the questions raised by the EU and the US concerning the 
administrative procedures covering certain im ports as laid out in Decree No. 56/M-
DAG/PER/12/2008 (Decree 56) which replaces D ecree No. 44/M-DAG/PER/10/2008 (Decree 44). 
 
 Decree 56 entered into force on 1 February 2009.   This decree is not intended to create new 
non-automatic licensing procedures as im porters are simply required to register with the Ministry of 
Trade.  The rejection of an application is not b ased on any form of evaluation, but it reflects the 
failure to provide the basic information containe d in Article 2(3) of Decree 56.  Where this 
information is supplied as required, the importer is automatically registered within 7 working days. 
  With regard to the additional information sought, Indonesia wishes to respond as follows in 
the order of the questions set:  
1. Have the import licensing procedures foreseen und er Regulation of the Trade Minister of the 
Republic of Indonesia, Number 44/M-DAG/PER/10/2008, dated 31 October 2008 (“Decree 44”), as 
modified by Regulation of the Trade Minister  of the Republic of Indonesia, Number 56/M-
DAG/PER/12/2008, dated 24 December 2008 (“Decree 56”), been notified to the WTO Committee on Import Licensing Procedures?  If not, when will Indonesia do so?  
 Answer
: 
  Regulation 56 is not an import licensing scheme as the purpose is only to register importers.  
There is no import permit required with no restrictions on volume. 
 
 For this reason the Regulation 56 is not no tified to the WTO Committee on Import Licensing. 
 
2. We believe that the requirements of D ecree 44 and 56 establish non-automatic import 
licensing procedures as defined in Article 1 and Article 3 of the WTO Agreement on Import Licensing 
Procedures.  If Indonesia disagrees, please explain.  
                                                     
 
1 See Understanding on procedures for th e Review of Notifications (G/LIC/4). 
2 See document G/LIC/N/2/IDN/11. G/LIC/Q/IDN/14 
Page 2  
 
  Answer
: 
  Under Decree 44, the only element that may have been considered to contribute to an impression of a non-automatic import licensing procedure is the requirement for an importer to demonstrate past performance.  However, this is  no longer required under Decree 56.  As long as the 
basic information stipulated under Article 2(3) is provided, registration is granted within 7 days.  
Once registered, import licences are issued automatica lly to the importer concerned for the validity of 
the registration which is two years.  
3. What are the measures that are being implemente d by the Decree?  Is the decree intended to 
limit the quantity or affect the customs va lue of imports of the applicable goods? 
Answer
: 
  The measure is in the form of registering im porters of the applicable goods.  The Regulation 
is not intended to limit the quantity or affect th e customs value of imports of the goods concerned. 
 
4. Please clarify the objective of th e Decree.  (Is it to combat “illegal trade”, “track imports”, 
and/or promote “health and safety”?)  
 
Answer
: 
 
 The Decree is designed to address illegal trad e and safeguard health and safety through the 
development of an effective tracking system.  Wh ere goods enter the country without being declared, 
the requirements of pre inspection and import lic ences will help the Authority to identify those 
products being marketed in Indonesia.  The same sy stem also allows for a more effective tracking of 
products that may subsequently have to be wit hdrawn from circulation on health and safety grounds. 
 
(a) With regard to alleged smuggling into Indonesia, can Indonesia provide figures, 
data, studies, or other analysis demonstra ting the extent of this problem, particularly 
with respect to the products covered by the Decree? 
 
 Answer : 
 
 The very nature of smuggling means that it is not easy to provide figures, data or 
studies that would reveal the extent of the problem being faced.  However, those 
Members familiar with Indonesia should u nderstand that the problem faced is not 
"alleged" but real.  The government of Indonesia would welcome studies undertaken 
by the EU and the US as it is understood that we all share the common goal of 
protecting legitimate trade. 
 
5. How and according to what criteria have the pr oducts covered by the Decree been selected? 
Can Indonesia share information on the process – studies, analyses, and consultations – that have 
underpinned the selection of products?  
 
Answer : 
  The selection of products is based on items that are the most sensitive to smuggling.   G/LIC/Q/IDN/14 
 Page 3 
 
 
  6. Please explain the criteria used by Indonesi a for granting and/or allocating licences or 
registering/designating importers. Of the applications received so far, how ma ny have been declined? 
Why?  
 
Answer : 
 
- The criteria is set out under Article 2.3 of Decree 56. 
- As of 2 February 2009 the st atus of applications received: 
  a. Electronics:  approved 701;  133 rejected;  78 under process, 
 b. Toys:  256 approved;  60 rejected;  4 under process, 
 c. Food and beverages:  235 approve d;  39 rejected;  16 under process, 
 d. Garment:  234 approved;  60 rejected;  9 under process, 
 e. Footwear:  211 approved;  26 rejected;  5 under process. 
 
(a) Under what circumstances would a license application be denied other than failure to 
submit the necessary documents, as required in Article 2 of Decree 56?  
 
Answer
: 
 
 Applications would only be denied if th e requirements of Article 2 of Regulation 56 
are not met. 
 
(b) Will the relevant authorities be consulti ng with domestic industries or business 
associations in deciding whether or not to grant import license applications?  
Article 2.4 of the original decree, D ecree 44, appeared to  reference such 
consultations.  
 
Answer : 
 
 There is no consultation with the private sector on the granting of licences. 
 
7. What studies and analysis have been made to as certain that the measures in the Decree 
(import licensing, pre-shipment inspection, port entry limitations,  etc.) are the most appropriate and 
least trade restrictive in terms of achieving th e stated objective? Can Indonesia share this 
information?  
 
Answer : 
  Extensive discussions upon relevant informa tion available were undertaken at government 
ministries.  The focus of these discussions was how to establish a tracking system that would fulfil the 
twin objective of reducing and facilitating the identif ication of smuggled goods as well as being able 
to identify products that may have to be withdr awn from the market on health and safety grounds.  
The adoption of a registration scheme that would be  functional and efficient in nature, upon which 
import licences would automatically be registered , combined with pre-shipment inspection was 
considered the least-trade restrictive means of achie ving the objectives set.  Ports of entry were also 
chosen to ensure that the vast majority of imports are covered. G/LIC/Q/IDN/14 
Page 4  
 
  8. When will these import me asures enter into force?  
 
Answer
: 
  Ministerial Regulations No. 56/M-DAG/PER/12/ 2008 (Decree 56) entered into force on 
1 February 2009, except for textiles and apparel under HS 61-63, which entered into force on 
1 January 2009.  
9. Article 11 of Decree 56/2008 provides that the provisions are not applicable to the 
“temporary import of certain products.” Are goods in  transit therefore exempt from the provisions of 
the decree?
3 
 
10. Regarding the requirements outlined  in Article 2.3 of Decree 56, are importers required to 
submit documents for each individual shipment, or c an they complete one submission that is valid for 
numerous shipments?  
 
Answer : 
  The validity of registration is for two years.  Du ring this period, it is not required to submit 
documents for each individual shipment.  11. Article 5 of Decree 56 restricts importation of certain importable products to only five sea 
ports and all international airports.  What is the justification for restricting imports to only five sea 
ports?  Why were these ports selected over others?  Many importers choose another port if they are 
willing to forego the facilities at the identified ports?  If not, why not?  
 Answer
: 
  The five ports were selected because of th eir infrastructure and combined together they 
represent the ports of entry for the vast majority of  imports into Indonesia.  No other ports may be 
chosen because it would dilute the effectiveness of  the Decree in terms of tracking the goods. 
 12. Article 5, paragraph 2 of Decree 56 says that impor ts of Certain IT-Products for the needs of 
free trade zones and free ports is governed by th e rules and procedures concerning free trade zones 
and free ports.  
 
(a) Does this mean that free trade zones and f ree ports are not subject to any of the 
requirements of Decree 56, including registration and verification?  
 
Answer
: 
  The Authorities of free trade z ones are free to decide whethe r to adopt the procedures under 
Regulation 56, but they are not obliged to do so. 
 
13. Some of the tariff lines are textile sector products, including apparel  and made-up textile 
goods, as well as alcoholic beverages.   
 
(a) How do the new import licensing requirements overlap or interact with other existing 
import licensing requirements for the same products, particularly 19/M-
DAG/PER/5/2005 for textiles and apparel and 230/MPP/Kep/7/1997 for alcoholic 
beverages?   
                                                     
 
3 No reference was made to this question as contained in document G/LIC/Q/IDN/11.  G/LIC/Q/IDN/14 
 Page 5 
 
 
  (b) What steps are being taken to minimize the burden on traders of duplicative non-
automatic licensing procedures?  Upon impl ementation of Decree 56, will goods in 
HS chapters 61-63 be subject to two sets of registration requirements?  
 
Answer : 
  There is no overlap on the requirement s laid out for alcoholic beverages under 
230/MPP/Kep/7/1997, because alcoholic bevera ges is not covered by Regulation 56. 
 
 Textiles and apparel (HS 61-639 are also covered under Regulation 56.  However, the 
Government will ensure there are no duplicates of procedures.  
14. Article 6 of Decree 56 requires that every import of these products be subject to a verification 
or “Import Technical Investigation.”  
 
(a) What specific issues are being investigated and verified?  
 
Answer
: 
 
 The technical verification at the port of  exportation only covers the quantity and 
specification the goods to be exported to Indon esia.  Verification of the quality of the 
goods will be conducted if it is necessary, such in the case of food and beverages. 
 
(b) Are there technical regulations that provide the basis for such investigations?  If so, 
please explain.  Are there other reasons that  form the basis for the investigations, 
consistent with Indonesia’s WTO obligations?  
 
Answer : 
  There are no technical regulations to provide the basis for the checking process at 
pre-shipment level.  The verification is a pplied as part of the tracking system referred 
to. 
 
(c) What is the reason for requiring that every shipment be investigated?  Why will it be 
necessary to investigate products that are identical to products that have already 
been investigated in  previous shipments?  
 
Answer : 
 
Each consignment is checked to ensu re that import licences are not missed. 
 
(d) What will the verification consist of, do cumentary and/or physical inspections?  
 
Answer : 
 
 The verification will consist of documentary and physical checks.  
(e) What information and documents must be submitted for verification?  
 
Answer
: 
 
 The documents to be submitted for verifica tion are those related to the quantity and 
quality of the goods concerned. G/LIC/Q/IDN/14 
Page 6  
 
  (f) In what form will physical inspections take place?  
 
Answer
: 
  Physical inspections will take place at the c ountry of export.  It may consist of visual 
inspection of consignments and where app licable, samples taken to a laboratory. 
 
(g) How long is the whole verification process envisaged to take?  
 
Answer
: 
 
 On the basis that all documents required are submitted, the verification process will 
be completed within one day provided that  the application is made before 12 noon 
and the following day if the application is made after 12 noon. 
 (h) From the information received from appointed Surveyors (Succofindo and PT 
Surveyor Indonesia) it seems that both the importer and the exporter must submit an application and documentation for verification. If so, why? Why must the same documentation (e.g. Taxpayer Number and Special Importer Identify Number) be 
submitted to both the Ministry of Trade (in applying for a license) as well as to the surveyor (as part of the verification process)?  Why do the appointed surveyors 
require additional documentation to be s ubmitted (e.g. Trading License (SIUP))?  
 
Answer
: 
  Only the exporter is required to submit the application.  Importer who applies for the 
first time is required to simply submit in formation already required under Article 2(3) 
of Decree 56 to confirm their status.  This information is not subject to verification. 
 
(i) Will Indonesian Customs Authorities, for th e purpose of customs clearance, also 
require the documents submitted to the appoi nted surveyors for verification under the 
Decree, as well as carrying out documentary and physical inspections?  
 
Answer
: 
  Customs officers will only require import licences and the surveyors report for 
clearing goods.  However, the Decree does limit the verification to essential 
documents to minimise the financia l burden on the commercial operators. 
 
(j) What costs will be associated with verific ation or investigation, as mentioned in 
Article 6.3?  
 
Answers
: 
 
 The cost of inspection is determined by the surveyor company.  However, according 
to the information provided to the Governme nt the cost normally approximately 0.6% 
of the FOB price. 
  G/LIC/Q/IDN/14 
 Page 7 
 
 
  (k) What is the role of the surveyors?  What are they?  How are th ey appointed?  Does 
Indonesia already have approved surveyors in foreign ports?  
 Answers
: 
  The surveyor is used to assist in the pr e-inspection process.  They are appointed by 
the Government.  The precondition of particip ation being set out in Article 7 of the 
Decree.  It is the obligation of the appointed surveyor to complete pre-inspection and 
they are likely to fulfil thus function through counterparts abroad. 
 
15. Please clarify the meaning of Article 11 of Decree 56, including Articles 11(c) and 11(d), 
which appear to exempt certain business activities from the new requirements.  What business 
activities will be covered by the decree and whic h ones will be exempted?  Why?  How will 
Indonesian customs determine the ultimate use of the imports?  
 Answer
: 
  Exempted from this Decree:   a. Diplomatic goods or belongings of dipl omats posted in Indonesia or for diplomatic 
purposes in accordance with international agreement or protocol; 
 b. Goods or belongings of international orga nization or officials of such organization; 
 c. Goods or presents used for religious or public activities;  d. Goods for museum, zoo, or other non-co mmercial activities, which is open for public; 
 e. Goods for research and development activities;  f. Goods for handicapped people; 
 g. Weapons, ammunition, military equipmen t including its spare parts used for national 
defence; 
 h. Goods or auxiliary goods used for pr oducing products for the purpose of national 
security; 
 i. Personal belongings/luggage of passengers , crew, cross-border where the value and 
volume are limited; 
 j. Sample for export and not for traded.  k. Equipments which have been exported for the purpose of repairing, recondition and 
quality testing and then imported again into Indonesia; 
 l. Equipments for human therapy, blood grouping and gen-net.;  m. Equipments for building and developing industry in the framework of implementing 
investment policy or machines for devel oping industries for certain time-frame; 
 n. Equipments for preserving environment;  o. Sports goods imported by the hi ghest body of sport organization; 
 p. Damaged equipment, quality degradati on, destroyed, the decrease of volume or 
weight naturally when carried into the I ndonesian Custom Territory and when import 
approval was given to use; 
 q. Goods owned by central and local  government used for public interest; 
 r. Goods or equipments to be used for government project funded by foreign loan or 
foreign grant. 
 
 
__________