IMPORT LICENSING SYSTEM OF INDONESIA

REPLIES BY INDONESIA to the QUESTIONS
FROM THE United States

The following communication, dated 1 November 2024, is being circulated at the request of the delegation of Indonesia.

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Question 1

The United States understands that on 10 March 2024, Indonesia began implementing a new import licensing regulation MOT 36/2023 (amended by MOT 3/2024) as well as implementing regulations MOI 1/2024 - MOI 6/2024[1]. The new import licensing requirements apply to a range of products within over 3800 HS codes.

·_              What objective is Indonesia hoping to achieve through these import licensing requirements?

·_              Did Indonesia carry out a public notice and comment period ahead of publication and implementation of this measure? If so, please describe your process.

Reply:

Indonesia imports licensing regulation's aiming to enhance trade balance and adapt to current economic conditions. The process involved stakeholder consultations and a three-month transition period. The Ministry of Trade conducted extensive outreach through various channels to inform businesses about the changes. This approach was designed to gather input, provide clarity, and ensure smooth implementation of the new requirements.

Question 2

The United States understands that importers are required to register through the INSW system, which has not been functioning properly, and undergo a lengthy verification process in order to apply for an import license. Indonesia also requires importers to submit certain sensitive and business confidential data to even considering the application.

·_              Considering that the new import license application process is a computer-based system, has there been thorough testing conducted to validate the functionality and reliability of the computer systems before the implementation?

·_              Please provide an estimated time of the overall process to obtain an import license?

·_              Please explain why Indonesia requires sensitive and confidential information[2] as a precondition to apply for Pertek (technical consideration) and processing of import approvals.

Reply:

Indonesia has implemented a new computer-based system for import licensing through the Indonesian National Single Window (INSW). This system underwent thorough testing during a three‑month transition period to ensure its functionality and reliability. The process, which has been partially in use since September 2022, aims to streamline import procedures. Once an application is complete and meets all requirements, an import license is issued electronically within five working days. Regarding the requirement for sensitive and confidential information, Indonesia maintains that this data is necessary to verify the accuracy and intended use of imported goods, thereby ensuring regulatory compliance and maintaining the integrity of the import process.

Question 3

The United States understands that Indonesia also introduced a quota system for products causing great uncertainty for importers.

·_              Please explain a rationale for establishing quota.

·_              Please explain who sets the overall quota and how the quota is determined for a particular product.

Reply:

Indonesia can ensure that the MOT 36/2023 is not a quota for limiting imports. As a member of the WTO, Indonesia understands that the quota measures shall be consistent with WTO rules.

Question 4

Indonesia did not notify MOT 36/2023 or its implementing regulations in accordance with Article 5 of the Agreement on Import Licensing Procedures.

·_              Please explain when Indonesia will notify this measure to the Committee on Import Licensing.

Reply:

Indonesia is currently under discussion of its notification to the WTO Committee on Import Licensing. This process involves internal discussions and coordination among relevant ministries to ensure a comprehensive and accurate notification.

Question 5

Considering the broad scope of MOT 36/2023 impacting a large number of products, challenges with the system, concerns with data collection, uncertainty with import allocation and the lack of transparency, the United States asks Indonesia to delay its implementation for at least 12 months until Members and stakeholders have a better understanding of Indonesia's new requirements.

Reply:

Indonesia understands the concerns expressed by the United States regarding the implementation of the MOT 36/2023. We would like to emphasize that this regulation was designed with careful consideration of Indonesia's obligations under WTO agreements.

Nevertheless, Indonesia appreciates the input provided and is committed to continuously evaluating the implementation of this regulation. At present, we will maintain our policy objectives of improving trade efficiency and effectiveness. We look forward to continuing our cooperation with the United States and other WTO members to ensure the smooth flow of international trade.

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