Minister of Trade Simplifies Laws on Restricted Goods for Export and Import

The Minister of Trade (“MOT”) recently issued MOT Regulation No. 18 of 2021 on Goods Prohibited from Being Imported and Exported (“Regulation 18”) in the divinity of simplifying Indonesian regulatory frameworks. Prior to the issuance of Regulation 18, the list of goods prohibited for export and import was scattered across various regulations, including  MOT Regulation No. 12 of 2020 on Goods Prohibited for Import,  MOT Regulation 45 of  2019 on Goods Prohibited for Export, and Minister of Industry and Trade Decree No. 520/MPP/Kep/8/2003 on the Prohibition on Imports of Hazardous and Toxic Waste. All of these restrictions are revoked by Regulation 18.

Regulation 18 forbids the importation of 149 items (up from 116 items) and the exports of 275 items (previously only 39 items). The goods forbidden for export and import under Regulation 18 are listed in the Regulation 18’s schedule. In contrary to the prior regulations, Regulation 18 adds new categories of forbidden imports, including sugar, rice, and hand tools. Although importers are barred from importing said commodities, goods that are prohibited for import may be re-imported after being previously exported under particular conditions, pursuant to the restrictions of the prevailing legislation. Regulation 18 also adds additional forbidden export categories, including subsidized fertilizer and metal residues and scrapings.

In terms of applicability and sanction, the prohibition applies to (a) export of goods from free-trade zones and free ports (KPBPB), (b) import of goods from outside the customs area to KPBPB, (c) export of goods from the exclusive economic zone to outside the customs area, (d) import of goods from outside the customs area to the exclusive economic zone, (e) export of goods from the bonded zone to outside the customs area and (f) Import of products into the bonded zone from outside the customs zone.  The release of Regulation 18 may usher in a new era in the trade sector by further easing and harmonizing technical regulations on export and import, as most technical requirements on import and export are currently governed separately.