Carry Cargo are experts in shipping to Indonesia and here we have outlined some of the pitfalls and problems that may surface when exporting to that country.
Shipments destined for Indonesia require expert knowledge of documentation & customs procedure to avoid time consuming and costly mistakes.
The Indonesia market can, if you are not extremely diligent, be a minefield of hidden requirements which, if not met in full can delay an urgent shipment or indeed, result in confiscation of goods.
Our Export team at Carry Cargo International has a wealth of in depth experience, practical knowledge and cultural insight which combine to allow you to have confidence that deadlines will be met and customers satisfied.
From the initial drawing up of Letters of Credit through to request of necessary proofs of delivery, Carry Cargo can advise, highlight elements of risk and help exporters avoid traps.
Independent republic in south-east Asia
Belawan, Palembang (Sumatra), Jakarta, Semarang, Surabaya (Java), Balikpapan (Kalimantan), Manokwari, Merauke (Irian, Jaya), Udjung Pandang (Sulawese), Ternate (Moluccas)
International Country Code
Bahasa Indonesia (official, modified form of Malay), English, Dutch, local dialects, the most widely spoken of which is Javanese
Indonesia has the largest Muslim population of any country, while the island of Bali is predominantly Hindu.
Indonesia spans three time zones:
During the recent global financial crisis Indonesia joined China and India as the only G20 members showing growth. This was much due to significant reforms in the financial sector together with fiscally conservative policies that have helped Indonesia grow by about 6% over each of the past four years. Indeed, its debt-to-GDP ratio in recent years has declined steadily because of sound fiscal stewardship, leading two of the three leading credit agencies to give the country an upgraded rating. However, Indonesia still struggles with poverty and unemployment, corruption, a complex regulatory environment, and unequal resource distribution among regions. The government also faces the ongoing challenge of improving the country’s infrastructure to remove impediments to growth, while addressing climate change concerns, particularly with regard to conserving forests and peatlands.
In October 2014, Joko Widodo became Indonesia’s new president. He is the first in that office not to have emerged from the country’s political elite or to have been in the military. He succeeded Susilo Bambang Yudhoyono, who had to step down after serving two five-year terms,
Government offices: Monday to Thursday 0800–1500, Friday 0800–1100. Commercial offices: Monday to Friday 0800–1700. Foreign banks:Monday to Friday 0830–1530. Local banks: Monday to Friday 0800–1530. Shops: Monday to Sunday 0900–2200 (some close at 1730).
Garuda Indonesia Airways is the state airline, which flies to Asian, European and Australian destinations. Bouraq, Merpasi and others provide air service to major cities and outlying islands. Soekarno International Airport is 20 miles outside Jakarta and is one of 673 airports (186 of which are paved). The country also has 76 heliports.
In Jakarta and other cities public transport can be unreliable or unsafe. Taxis are available but drivers’ skill and knowledge are variable. Private cars are preferred by expatriates. There are 496,607km of road. For intercity and inter island travel, train and air services are cheap but can be inefficient or uncomfortable. The rail system is extensive, covering 8529km.
A ferry service links many islands. The country’s largest ports include Cilacap, Cirebon, Jakarta, Kupang, Palambang, Semarane, Surabaya and Ujungpandane.
Indonesia has 38.6 million main line telephones in use as well as 281.9 million mobile phone subscribers and 55 million internet users. It also has a short-wave radio system that can pick up the BBC and Radio Australia.
Business Protocol and Social Convention
Western-style clothing is predominant in Jakarta, where shirts and ties are considered acceptable for business. Lightweight clothing is appropriate and advisable. Indonesians like to avoid confrontation and disharmony. They also place emphasis on doing business with “friends” so developing a rapport is vital. Because of the predominance of Muslims in Indonesia, business gifts — which are given quite commonly — should not include pork products or alcohol. Respect, civility and politeness should be shown at all times, especially when greeting someone for the first time. Patience and perseverance should help to cement further relations.
Petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilizers, plywood, rubber, food, automotive, electrical appliances, medical instruments and appliances, handicrafts, jewellery, tourism
Main Products Exported
Oil and gas, electrical appliances, plywood, textiles, rubber
Indonesia has (since 1966) maintained close relations with USA, Western Europe, Australia and Japan.
Major Trade Partners
Japan, the US, Singapore, South Korea, China, Malaysia
Membership of Organisations and Trade Agreements
Founder member of the Southeast Asian Nations (ASEAN) in 1967, organised to promote common economic, social and cultural goals. In 1990 ASEAN Regional Forum gave ASEAN a security aspect. Indonesia received substantial foreign and economic assistance through the inter-government group on Indonesia and IB successor, the consultative group on Indonesia. Also a strong supporter of Asia Pacific Economic Co-operation.
Membership of Organisations
ADB, APEC, ARF, ASEAN, BIS, CD, CICA (observer), CP, D-8, EAS, EITI (candidate country), FAO, G-11, G-15, G-20, G-77, IAEA, IBRD, ICAO, ICC (national committees), ICRM, IDA, IDB, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM (observer), IPU, ISO, ITSO, ITU, ITUC (NGOs), MIGA, MONUSCO, NAM, OECD (Enhanced engagement), OIC, OPCW, PIF (partner), UN, UNAMID, UNCTAD, UNESCO, UNIDO, UNIFIL, UNISFA, UNMIL, UNIMISS, UNWTO, UPU, WCO, WFTU (NGOs), WHO, WIPO, WMO, WTO
Bills of Lading
No special regulations apply and bills of lading may be made out “to order”. As long as there are no payment or title (ownership) issues then check if the goods can move with an express bill or on express release to avoid potential delays that may occur when shipping with the full marine bill of lading (ie cargo cannot be released until the original has been handed to the carrier in your buyer’s country).
Cargo Notification Regulations: Due to an increased awareness of the requirement for security procedures, Indonesia is one of the many countries that have introduced a mandatory Cargo Notification system. Generally completed by the masters of vessels, the airline, carrier or freight company, it must be received at least 24 hours prior to the arrival of a vessel/aircraft to the customs office of entry. Goods arriving without pre-notification may be denied entry or face severe delays in customs clearance. Importers with a very good standing may apply for the status of main partner (MITA) at the Directorate General of Customs and Excise. The MITA status comprises a number of benefits and presents a prerequisite for priority treatment.
Certificates of Origin
None, unless specially requested. Request for a declaration of origin generally satisfied by a statement on the invoice but customer may occasionally request an EU Certificate of Origin issued by the Chamber of Commerce (see the EU Certificates of Origin topic).
This is to ensure that such imports are not a danger to public health or to the environment. Consequently, importers are to obtain an independent certificate of inspection. In certain cases, an import licence is also required. Various decrees and requirements are in place and Bureau Veritas (tel: 020 7550 8950), Cotecna (tel: 020 8277 7700) and SGS United Kingdom Ltd (exporter helpline tel: 01276 697899, fax:01276 697832) have been authorised to carry out inspection of exports from the UK. The SGS/Bivac/Cotecna Certificate has been approved by the Minister of Trade and Industry. SGS/Bivac/Cotecna hold lists setting out the types of waste material that are now prohibited from import into Indonesia, as well as those permitted. All shipments with a value of or exceeding US$5000 are subject to an inspection of quality, quantity, tariff classification and country of manufacture by the Indonesian customs authorities. Please note that the number and kind of commodities concerned by PSIs may vary according to new ministerial regulations entering into force. Furthermore, PSI measures may also be applied temporarily.
Invoices to be issued in one original and one copy, originally signed. Invoices must include a full and accurate description of goods (if textiles or chemicals including the exact composition of the goods); first six digits of the commodity code (HS Code); transport details; weights and dimensions; value and currency of the supply including separate indication of additional costs such as freight and insurance; the shipping term (the Incoterms® 2010 rule, eg FCA, CIP, DAP); country of origin; payment terms and the full addresses of all parties concerned.
It is a legal requirement to show the full transaction price of the sale on the commercial invoice at export. There have been some instances of undervaluing of goods at import and the customs authorities are taking a strong line in combating this fraud.
A document containing the details of the shipment is recommended, prepared by the exporter in English. It serves as a basis for Customs treatment of goods. It should include: the content of the packages, description of the goods, marks and numbers. It is also recommended that you have a weight note showing net and gross weights with the unit of measure.
1 Indonesian rupiah (IDR) = 100 sen
The importation of goods can only be conducted through registered importers. Registered importers will have a General Importer’s Identification Number (APIU), which must be quoted to customs on arrival. Importers must be registered with the Directorate General for Customs and Duty and all companies engaged in trade activities must be registered with the Investment Coordinating Board as well as registered with the Tax Office at the Ministry of Finance. This final registration is necessary to get a Tax Payer Registration Code Number and obtain a Trade Business Licence from the Department of Industry and Trade in order to perform trade activities in Indonesia. Some commodities, eg textiles, may only be imported by registered importers who have a “Special Importer’s Identification Code Number”. Import licences are mainly classified according to the purpose of importation. Indonesia also has a list of prohibited imports such as firearms, some pharmaceutical products, explosives, certain chemicals, etc.
Assessed on the ad valorem rates on the CIF value plus. There is a fluctuating special rate of exchange for Customs duties. In addition, a standard rate of VAT at ten per cent is levied on imports. Tariff is based on the Harmonised System (see Customs Nomenclatures in Terminology). Preferential rates apply to members of ASEAN (Association of Southeast Asian Nations), which includes Brunei, Burma, Cambodia, Indonesia, Laos, the Philippines, Singapore, Thailand, and Vietnam. Specific duty rates can be obtained via the EU Market Access Database Applied Tariffs Database page on the website:http://madb.europa.eu, if you know the first four digits of the commodity code of the goods.
Further information can be obtained from the Indonesian Directorate of Customs and Excise website www.beacukai.go.id.
Genuine commercial samples, low value, not for resale may be imported duty free but restrictions apply. Exporters should seek advice from their importers or contact The Director for Customs, Directorate General of Customs and Duties, Department of Finance, JI Jend A Yari/By Pas, Jakarta, Indonesia.
Temporary importation of commercial samples, professional equipment and goods for exhibitions can be made under an ATA Carnet as long as the goods are exported from Indonesia within 12 months of the issue date of the Carnet.
UK Export Regulations
All goods must be declared to Customs on leaving the EU (generally arranged by the freight forwarder/carrier).
Because of increased cargo security measures, all shipments leaving the EU require a pre-departure message to be sent to the country of destination — it is known as the ECS (Export Control System). For goods travelling across the EU Member States to a non-EU country, a new document — the Export Accompanying Document (EAD) — must be used to comply with Customs cargo security procedures. This is also the exporter’s official evidence of export. Created by Customs at the Office of Export (ie in the UK), it must be officially closed at the Office of Exit from the EU. The shipment can be tracked by the Movement Reference Number (MRN), which appears on the EAD on the Europa website (http://ec.europa.eu/index_en.htm). The information required differs depending on the security status of the exporter and freight companies involved, ie whether all or some are approved under the EU’s AEO (Authorised Economic Operator) status. The export customs declaration for shipments leaving the EU is also required giving details of the shipment including the exporter’s EORI (Economic Operator Registration Identification number — similar to the VAT No.) commodity code, value, customs procedure code, export licence requirements, transport and packing information. Details submitted to Customs on this form must be notified to the freight company by the shipper and the shipper must check that the declaration has been completed accurately to avoid customs penalties. A copy of this official customs declaration and/or a certified transport document is required for VAT purposes. From a UK port or airport this is via the electronic system known as NES — the National Export System. All goods subject to Export Controls (ie covered by an export licence — SIEL, OGEL or OIEL), coming under CAP regulations or otherwise controlled under Customs regulations (eg under IPR/OPR, etc), must be exported with a full declaration unless the shipper is authorised to use one of the simplified NES procedures. All shipments must be given a Unique Consignment Reference (UCR) made up of the shipper’s EORI and export reference, eg invoice number.
Export Controls: Certain classes of goods are controlled under National and EU regulations. Examples are military goods, dual-use and military technology (including intangible transfer of such technology, eg by e-mail or fax). These are all listed on the GOV.UK website under Strategic Export Controls. Other goods not listed in the statutory instruments may be controlled if their end-use involves chemical, biological or nuclear weapons or the means of delivering them. Subscribers are recommended to seek advice from the BIS Export Control Organisation (ECO).
Note: For controlled military goods moved at your instigation between countries outside the UK, consult the “trade — trafficking and brokering” rules on the BIS ECO website..
Packing and Marking Requirements
Marking of Goods
Labelling should be in Bahasa Indonesian. Marking which could mislead consumers as to the origin of the goods is prohibited. Labelling of goods, especially foodstuffs and alcoholic beverages, must be confirmed with the importer. You can check for further details with the Desk at UK Trade & Investment. Contact through the website: www.gov.uk or via Technical Help for Exporters, a service provided by the BSI. Website: www.bsigroup.co.uk (tel: 020 8996 9001).
Consult the Commercial Section of the British Embassy for general advice, particularly where food products are concerned.
Indonesia has implemented the International Plant Protection Convention Guidelines for regulating wood packaging in international trade (ISPM No. 15). Imports of wood packaging must either be accompanied by a certificate to show that they have been correctly heat treated or fumigated or bear the international mark stating the above. Consignments with wood packaging may still be subject to inspections and delays at import.
All business is carried out under the current BIFA standard trading terms and conditions which are available upon request.