Indonesia Bans Selling Goods in Social Media Platform

In 26 September 2023, the Ministry of Trade had banned selling goods in social media or social-commerce platform through Minister of Trade Regulation Number 31 of 2023 concerning Business Licensing, Advertising, Development and Supervision of Business Actors in Trading Through Electronic Systems (“MoT Reg 31/2023”). This regulation is effective immediately on the date of its issuance. In order to ensure compliance, we encourage that business actors note the following key takeaways:

  1. Marketplace and social-commerce business model are prohibited from acting as manufacturer of goods.
  2. Social-commerce business model is prohibited from facilitating payment transactions on its electronic system.
  3. Cross-border transaction, where a foreign merchant directly sells finished goods to Indonesian customer, conducted in e-commerce are required to apply floor price which is US$100 per unit.
  4. E-commerce is obliged to facilitate and display information on the country of origin of foreign seller, the country of origin of goods sent from abroad, and proof of compliance with standards for goods and/or services in accordance with Indonesian law.

It is important to note that failure to comply with MoT 31/2023 may result in administrative sanctions in the form of written warning, included in the monitoring list, blacklisted, temporary of service, and/or revocation of business license. The enactment of MoT Reg 31/2023 also marks the replacement of Minister of Trade Regulation Number 50 of 2020 concerning Provisions for Business Licensing, Advertising, Guidance and Supervision of Business Actors in Trading Through Electronic Systems.