INDONESIA
77/M-DAG/PER/11/2016 (R77)
Regulation of the Minister of Trade of the Republic of Indonesia concerning provisions of tyre import
WTO notification: NHIL
Date of publication: 11 Nov. 2016
Date of implementation: 1 Jan. 2017
Brussels, 9thDecember 2016
Introduction
In June 2015, the Indonesian authorities published a Regulation on tyre import (45/M-DAG/PER/6/2015 - R45), which the European Commission recognised as subjecting importers to non-automatic licensing, overly burdensome administrative procedures for importer recognition and import authorisations, as well as numerous controls and verifications including on conformity with standards.
As a result from the actions undertaken by the European Commission, the Indonesian Authorities agreed to withdraw the Regulation in question and replaced it with one that re-established the status quo.
Almost, eighteen months after that Regulation, on 11 November 2016, the Indonesian Minister for Trade issued a new text concerning provisions on tyre imports (77/M-DAG/PER/11/2016, hereinafter R77), which brings back the problems the tyre industry had identified in 2015, mainly the following:
1-Import quotas in the form of non-automatic licensing (on the basis of 6 months import plan) – Art. 6, art. 10, art. 13
2-Pre-shipment inspections with verification or technical analysis at port of loading – Art. 11, art 13
3-Possession of warehouses and means of transports – art. 6
The protectionist intent of the Regulation is already obvious from the Preamble, which states that it is necessary to “rearrange the provisions on tyre import” in order “to support the availability and supply of domestic tyres, to support national tyres industries development, to create fair competition, and to increase national competitiveness.”
Furthermore, Art. 2 also plainly states what the object of this Regulation: “Tyre import is restricted”.
Given the tight timeline (implementation 1 Jan. 2017), ETRMA would like to ask the European Commission to request that Indonesia urgently suspendsthe implementation of this Regulation. Without doing so and without solving the many trade-restrictive measures there included, tyre exports to Indonesia would be seriously disrupted.
Finally, it should be noted that this Regulation 77 was never notified to WTO.
Factual description of measures
Regulation 77 adds further requirements and restrictions to those already present[1]:
Pre import stage (Art.6):
- To get the Import Recommendation (Article 6.1.h), the importer must apply (on-line) to the Director General of Chemical, Textiles and Various Industry, Industry Ministry. The importer has to submit a six month import plan that specifies the type of tires, classification/HS 10 (ten) digits, quantity, country of origin, including the port of loading, and port of destination. The above mentioned Director General will consider the application and give recommendation (or approval) on the quantity that may be imported to Indonesia.
At present, and despite the application of this measure will be in two weeks, the application cannot yet be made electronically. The format and online access still need to be set up.
- Furthermore, Art. 6 lists the following additional requirements:
1.A letter of Appointment from the brand owner with authentication by local notary and trade attaché in the country of origin (Article 6.1.e)
2.Warehouse possession (Article 6.1.f)
3.Transportation possession (Article 6.1.g)
4.The above-mentioned 6-months import plan
All these documents need to besubmitted electronically to the Director General of the Ministry of Trade as part of the application to receive theImport Approval.
Import stage (Arts. 11 to 13):
After getting an Import Approval, this new regulation also sets a new requirement for verification ortechnical analysis at the loading point. This activities need to be performed by a surveyor nominated by the Minister. This operation can also be carried out at a special port in Indonesia called PLB (Pusat Logistic Berikat)or Bonded Logistic Centre. The result of this verification or technical analysis will be in the form of a Surveyor Report.
This will result into delays and further costs.
Post import stage (Art. 14):
Importershave to report their tyre imports, whetheror not they have actually materialized, by electronic submission attached to the following requirements:
- Scanned of Import Realization Control Card signed by Customs officer, for any type of Tires to the network of Indonesia National Single Window (INSW); or
- Scanned of Notification of Import (PIB), for any type of Tires to the network of Indonesia National Single Window (INSW)
Legal description of measures and legal obligations infringed
The full text of the translated Regulation 77 is included in Annex I.
The main issues identified by the European tyre industry are the following:
- Unrealistic time of implementation:
Article 2:12 of the TBT Agreement underlines that “Except in those urgent circumstances referred to in paragraph 10, Members shall allow a reasonable interval between the publication of technical regulations and their entry into force in order to allow time for producers in exporting Members, and particularly in developing country Members, to adapt their products or methods of production to the requirements of the importing Member”. As the urgency of applying this new regulation has not been demonstrated on the basis of “urgent problems of safety, health, environmental protection or national security”, the Indonesian authorities should take the time to comply with the following:
- Notify R77 as per articles 2:9 of the TBT Agreement and articles 1:4 (a) and 8:2 (b) of the Agreement on Import Licensing Procedures as well as GATT X:1;
- Allow at least six months from the WTO notification to the industry to comply with the new norms and procedures.
- Different procedures for national producers and importers and different procedures for different types of importers
The very existence of this regulation establishes a bias towards locally manufactured tyres, which will not have to undergo any of the (complicated) procedures listed in this Regulation.
Furthermore, Art. 3 Para 1 establishes that tyres can only be imported by companies that hold:
-AProducer Importer Identification Number (API-P)
-A General Importer Identification Number (API-U) and obtained the Import Approval from the Minister.
Additional and unnecessary requirements are set for General Imports (API-U) such as property of the warehouse /storage area and the means of transport (Article 6.1 f) et g). None of these requirements is applied to the local producers.
On this point, it should be noted that in common business practice, companies may appoint third party for the storage/warehouse activities and means of transportation, based on resource, cost and competitiveness.
Furthermore, the duration of the licence is different for the two types of importers (art. 7):
-1 (one) year as of the issuance date, for API-P holder; and
-6 (six) months as of the issuance date, for API-U holder
Establishing a different treatment for similar actors and products is discriminatory and unjustified and gives an undue advantage to certain players at the damage of others. Domestic and foreign producers should be treated in the Indonesian market on an equal footing pursuant to the National Treatment principle (article III:4 of the GATT)
In this context, ETRMA requests that such rules are reviewed to achieve full equivalence of treatment between domestic and foreign manufacturers.
- Procedures resulting into a quantitative and other restrictions;
The import procedures (set in Article 6, para 1, point d; Article 6, para 2 and Art.17, point d) are also in contrast with the GATT agreement and in particular against Article XI, para 1 on the elimination of quantitative restrictions.
The quantitative restriction is a result of the combined effect of requesting an import plan specifying the number of tyres imported, the country of origin, port of loading and port of destination and Article 17, Point d stating that the licence would be revoked if companies "import tyres that the type does not match and /or exceed the amount stated in the tire import documents".
This means that this Regulation implicitly makes import approval dependent on the quantity of tyres imported.
- Duplication of administrative procedures
Article 6 Para 1 point g states that a “recommendation from the Director General of Industrial Chemicals, Textiles and Related Products, Ministry of Industry” is needed to obtain a licence, in the same way as for the change of the Licence (article 9, para 4 point b).
This recommendation is an additional burden and a duplication of existing provisions, since tyres are already regulated by the Ministry of industry. Furthermore, it could result in additional delays in import activities as there is no time-limit set in order for the Ministry to issue such a recommendation.
This duplication of administrative procedures goes against Article 1:5 and 6 of the WTO Agreement on Import Licensing Procedures. Furthermore, the number of documents that need to be provided in the context of the import plan is unreasonable and alone constitutes a barrier to trade with Indonesia.
As a result, ETRMA would be grateful if the request of providing an import plan could be removed altogether.
Product(s) affected (HS code minimum 4 digits) / Estimated commercial value
The HS codes concerns are the following: 4011.10.00.00, 4011.20, 4011.20.10.00, 4011.20.90.00, 4011.40.00.00, 4011.50.00.00, 4011.61, 4011.60.10.00, 4011.61.10.00, 4011.61.90.00, 4011.62, 4011.62.10.00, 4011.62.90.00, 4011.63, 4011.63.10.00, 4011.63.90.00, 4011.69.00.00, 4011.92, 4011.92.10.00, 4011.92.90.00, 4011.93, 4011.93.10.00, 4011.93.90.00, 4011.94, 4011.94.10.00, 4011.94.20.00, 4011.94.90.00, 4011.99, 4011.99.10.00, 4011.99.20.00, 4011.99.30.00, 4011.99.90.00, 40.13, 4013.10, 4013.10.11.00, 4013.10.19.00, 4013.10.19.00, 4013.10.29.00, 4013.10.29.00, 4013.20.00.00, 4013.90, 4013.90.11.00, 4013.90.19.00, 4013.90.20.00, 4013.90.31.00, 4013.90.39.00, 4013.90.91.00, 4013.90.99.00 (see List of restricted tyres in appendix of Regulation)
Trade in number of tyres
Imports of products corresponding to these codes amount to 37,726,882 tyres
Exports of products corresponding to these codes amount to 224,957 tyres
Trade in value
Imports of products corresponding to these codes total to € 200,399,408
Exports of products corresponding to these codes total to € 10,619,080
Member States who export to Indonesia: Czech Republic (€839,695), Germany (€1,512,279), Spain (€4,952,439), France (€1,888,360), UK (€185,876), Hungary (€123,931), Italy (€362,651), Luxemburg (€165,853), Netherlands (€35,775), Poland (€390,180), Romania (€150,596).
ANNEX I – Translation of the Regulation
MINISTER OF TRADE OF THE REPUBLIC OF INDONESIA
REGULATION OF THE MINISTER OF TRADE OF THE REPUBLIC OF INDONESIA
NUMBER 77/ M-DAG/ PER/ 11/2016
CONCERNING
PROVISIONS OF TIRES IMPORT
WITH THE BLESSING OF THE ALMIGHTYGOD
MINISTER OF TRADE OF THE REPUBLIC OF INDONESIA,
In consideration of:a.whereas to support the availability and supply of domestic tires, to support national tires industries development, to create fair competition, and to increase the national competitiveness, it is necessary to rearrange the provision on tires import;
b.whereas in consideration set forth in paragraph a, it is necessary to stipulate the Minister of Trade Regulation on the Provision of Tires Import;
In view of:1.Act Number 7 of 1994 concerning Ratification of the Agreement Establishing The World Trade Organization (The Republic Of Indonesia State Gazette Number 57 of 1994, Supplement to the Republic Of Indonesia State Gazette Number 3564);
2.Act Number 10 of 1995 concerning Customs (The Republic Of Indonesia State Gazette Number 75 of 1995, Supplement to The Republic Of Indonesia State Gazette Number 3612) as amended by Act Number 17 of 2006 concerning Amendment to the Act Number 10 of 1995 concerning Customs (The Republic Of Indonesia State Gazette Number 93 of 2006, Supplement to The Republic Of Indonesia State Gazette Number 4661);
3.Act Number 5 of 1999 concerning Anti-Trust (The Republic Of Indonesia State Gazette Number 33 of 1999, Supplement to The Republic Of Indonesia State Gazette Number 3817);
4.Act Number 8 of 1999 concerning Consumer Protection (The Republic Of Indonesia State Gazette Number 42 of 1999, Supplement to The Republic Of Indonesia State Gazette Number 3821);
5.Act Number 39 of 2008 concerning State Ministries (The Republic Of Indonesia State Gazette Number 166 of 2008, Supplement to The Republic Of Indonesia State Gazette Number 4916);
6.Act Number 3 of 2014 concerning Industries (The Republic Of Indonesia State Gazette Number 4 of 2014, Supplement to The Republic Of Indonesia State Gazette Number 5492);
7.Act Number 7 of 2014 concerning Trade (The Republic Of Indonesia State Gazette Number 45 of 2014, The Republic Of Indonesia State Gazette Number 5512);
8.Act Number 20 of 2014 concerning Standardization and Certification (The Republic of Indonesia State Gazette Number 216 of 2014, Supplement to The Republic Of Indonesia State Gazette Number 5584);
9.Presidential Regulation Number 7 of 2015 concerning State Ministries Organization (The Republic Of Indonesia State Gazette Number 8 of 2015);
10.Presidential Regulation Number 48 of 2015 concerning Ministry of Trade (The Republic of Indonesia State Gazette Number 90 of 2015);
11.Presidential Decree Number 83/P of 2016 concerning Replacement of Several Working Cabinet State Ministers for the Period of 2014-2019;
12.Minister of Trade Regulation Number 14/M-DAG/PER/3/2007 on Standardization of Trade Services and National Standard (SNI) for Goods and Services as amended several times and the most recently by the Minister of Trade Regulation Number 72/M-DAG/PER/9/2015 concerning Third Amendment to the Minister of Trade Regulation Number 14/M-DAG/PER/3/2007 concerning Standardization of Trade Services and National Standard (SNI) for Goods and Services (The Republic of Indonesia State Gazette Number 1518 of 2015);
13.Regulation of the Minister of Trade Number 46/M-DAG/PER/8/2014 concerning General Provisions on Verification or Technical Analysis of Trade Affairs (The Republic Of Indonesia State Gazette Number 1104 of 2014);
14.Regulation of the Minister of Trade Number 48/M-DAG/PER/7/2015 concerning General Provisions on Importation (The Republic Of Indonesia State Gazette Number 1006 of 2015);
15.Regulation of the Minister of Trade Number 70/M-DAG/9/2015 concerning Standard Importer Classification (The Republic Of Indonesia State Gazette Number 1516 of 2015);
16.Regulation of the Minister of Trade Number 76/M-IND/PER/9/2015 concerning National Standard for Tires Products (The Republic Of Indonesia State Gazette Number 1448 of 2015);
17.Regulation of the Minister of Trade Number 08/M-DAG/PER/2/2016 concerning Ministry of Trade Organization and Standard Operating Procedure (The Republic Of Indonesia State Gazette Number 202 of 2016);
DECIDES:
To stipulate :REGULATION OF THE MINISTER OF TRADE ON TIRES IMPORT
Article 1
In this Regulation of the Minister, the following terms shall have the following meanings:
- Tires is a part of vehicle made of natural and/or synthetic rubber, unmounted and/or mounted on a rim under classification Pos HS 4011, 4013, and 8708.
- Import is activities which entering goods into the customs area.
- Import Approval is an approval used as License in performing Tires Import.
- Recommendation is a certificate issued by the relevant government institution/unit in charge and constitute as requirement in obtaining Import License.
- Verification or technical analysis is the research and inspection on Imported goods by surveyor.
- Surveyor is an authorized survey company to perform Verification or technical analysis on Imported goods.
- Minister is the minister in charge of trade affairs.
- Director General is the Director General of Foreign Trade, Ministry of Trade.
Article 2
(1)Tires Import is restricted.
(2)Such restricted Tires as provided in the Appendix which constitute an integral part of this Ministerial Regulation.
Article 3
(1)Tires as referred to in Article 2 shall only be imported by companies that hold Producer Importer Identification Number (API-P) or companies that hold General Importer Identification Number (API-U) who obtained the Import Approval from the Minister.
(2)Minister shall delegate the issuance of such Import Approval as referred to in paragraph (1) to the Director General.
Article 4
Companies that hold API-P as referred to in Article 3 paragraph (1) may import restricted Tires solely for the purpose of to be used as raw material or as a finish for their produced goods.
Article 5
Companies that hold API-P as referred to in Article 4 shall not trade and/or transfer restricted Tires to any other parties.
Article 6
(1)Companies who wish to obtain the Import Approval as referred to in Article 3 shall submit an electronic application to the Director General attached with the following required documents:
- API-P or API-U;
- National Standard Certification (SPPT SNI) for Tires products, if applicable;
- Goods Registration Number (NPB)for Tires products, if applicable;
- Master List shall specified type of Tires, classification/HS 10 (ten) digits, quantity, country of origin and port of loading, and port of destination;
- Letter of Appointment from the brand owner or manufacturer abroad with authentication by local notary and trade attache in the country of origin;
- Warehouse possession receipt in accordance with product characteristics, for API-U holder;
- Transportation possession receipt is accordance with product characteristic, for API-U holder; and
- Recommendation from the Director General of Chemical, Textiles and Various Industry, Ministry of Industry.
(2)The Master List as referred to in paragraph (1) section d:
- for a period of 12 (twelve) months, for API-P holder; and
- for a period of 6 (six) months, for API-U holder.
(3)Upon the application as referred to in paragraph (1), the Director General may issue the requested License within a period not later than 3 (three) days as of the receipt of such application, provided that it satisfied all requirements.
(4)In the case such application as referred to in paragraph (1) is not complete and correct, the Director General shall notified the applicant concerning refusal of requests within a period not later than 3 (three) days as of the receipt of such application.
Article 7
The Import Approval as referred to in Article 5 paragraph (3) is valid for:
- 1 (one) year as of the issuance date, for API-P holder; and
- 6 (six) months as of the issuance date, for API-U holder.
Article 8
(1)The validity period of Import Approval as referred to in Article 7 may be extended for a period of not later than 30 (thirty) days.
(2)To obtain such extension of Import Approval as referred to in paragraph (1), any entity shall submit an electronic application to the Director General, attached with the following required documents:
- original copy of the valid Import Approval;
- original copy of Import Realization Control Card;
- Bill of Lading (B/L); and
- Manifest document (BC 1.1).
(3)Upon the application as referred to in paragraph (2), the Director General may issue the requested License extension within a period not later than 3 (three) days as of the receipt of such application, provided that it satisfied all requirements.
Article 9
(1)Companies that import Tires shall report any changes to their documentation as referred to in Article 6 paragraph 91) section a to g, and shall submit application to change their License particulars.
(2)Companies that import Tires shall submit application to change their License particulars with respect to any changes on HS, type of Tires, quantity, country of origin and port of loading, and/or port of destination.
(3)To obtain the amendment of Import Approval as referred to in paragraph (1), the company shall submit an electronic application to the Director General, attached with the following required documents:
- affected documents as referred to in paragraph (1); and
- Import Approval.
(4)To obtain the amendment of Import Approval as referred to in paragraph (2), the company shall submit an electronic application to the Director General, attached with the following required documents: