GOVERNMENT REGULATION NO. 29 YEAR 2017 ON PAYMENT AND DELIVERY METHOD OF GOODS IN EXPORT AND IMPORT ACTIVITY

The Government of Indonesia (GOI) issued Government Regulation No 29 Year 2017 dated 24 July 2017 on Payment and Delivery Method of Goods in Export and Import Activity (“GR 29”). This GR 29 is required under Law No. 7 Year 2014 on Trading, particularly its Article 40. This GR, however cannot be fully implemented yet because it still requires implementing regulation in the form of ministerial regulation.

 

1.Payment method

1.1 exported goods

This GR 29 stipulates that for certain exported goods which are determined under the Ministry Regulations must be paid with L/C mechanism (Art.4.1) ; Elucidation of this GR 29, indicates that such exported goods are the goods which are deemed to be strategic or  restricted to be exported. For other type of exported goods can be paid with advance payment, open account, documentary collection and consignment.

1.2 Imported  goods

GR 29 also provides that for certain imported goods which are determined under the Ministry Regulations must be paid under counter trade (imbal dagang) mechanisms, which are barter, counter purchase (imbal beli), buyback or offset (Art.6.1). Elucidation of this GR 29, explains that such imported goods are goods for government procurement which using state budget, and such goods can be primary/public goods (barang kebutuhan pokok), strategic goods, or restricted imported goods. Elucidation of this GR 29 also provides the meaning of such barter, counter purchase (imbal beli), buyback or offset mechanism. For other type of imported goods can be paid with L/C, advance payment, open account, documentary collection and consignment.

 

2. Delivery method

2.1 exported goods

a. certain exported goods

This GR 29 stipulates that certain exported goods which are determined under the Ministry Regulations must be delivered under CIF terms (Art.8.1). Elucidation of this GR 29, indicates that such exported goods are Goods which are deemed to be strategic or restricted to be exported.

b. Other type of exported goods

This GR 29 stipulates that for the other type of exported goods can be applied variants of INCOTERMS FOB, CFR, CIF or other type of delivery methods (Art.7.1)

2.2 Imported  goods

a. certain imported goods

GR 29 also regulates that certain imported goods which are determined under the Ministry Regulations must be delivered under FOB terms (Art.10.1). Elucidation of this GR 29, explains that such imported goods are goods for government procurement which using state budget, BUMN/BUMD procurement, and such goods can be primary/public goods (barang kebutuhan pokok), strategic goods, or restricted imported goods.

b. Other type of imported  goods

This GR 29 stipulates that for the other type of imported goods can be applied variants of INCOTERMS FOB, CFR, CIF or other type of delivery methods  (Art.9). The other type of delivery methods refer to Article 7.1 and Article 9 above is referred to EXW, FCA, FAS, CPT, CIP, DAT, DAP, and DDP under INCOTERMS. However please note that the said Ministry Regulation to implement this GR 29 has not been issued yet. And violations of the above obligations can be culminated in the form of revocation of license after warning letter and/or administrative sanction.

 

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