Minister of Trade Enggartiasto Lukita accompanied by the Director General of Foreign Trade, Oke Nurwan; Director General of National Export Development, Arlinda; as well as Head of Trade Assessment and Development Agency, Kasan held a press conference on Working Visit of the Ministry of Commerce to the United States on Friday (13/07) - Photo by Trade Ministry Office

JAKARTA (TheInsiderStories) – Indonesia’s Ministry of Trade (MoT) issues Ministerial Regulation Trade Number 94 Year 2018 concerning the provisions on the use of letters of credit (L/C) for minerals, coal, palm oil and natural oil and gas imports. This regulation is promulgated on Sept. 7 and will apply on Oct. 7, 2018.

“The issuance of the is one of the efforts to strengthen the country’s foreign exchange reserves in the midst of global economic uncertainty,” explained the Minister of Trade Enggartiasto Lukita in a written statement on Monday (24/09).

The decision has been made based on Presidential Decree Number 29 Year 2017, Article 4, paragraph (3) concerning Ways Payment of Goods and How to Deliver Goods in Export and Import Activities, where the ministry is given the authority to regulate the method of payment of certain goods exports, he added.

The new regulation stipulated the main points of regulation, namely the obligation to pay for exports certain items with L/C, the obligation to use foreign exchange from the local banks or local institutions export financing established by the government, the obligation to include the method of payment of L/C on Goods Export Notification, the obligation to submit a stamped statement verification obligations by surveyors, as well as the obligation to submit export realization reports equipped with the final L/C price.

In addition, it is also regulated in relation to price determination, which is the price listed in the most L/C low equal to world export prices. If there is no, then the price used will be
determined by the government or export destination country.

The supervision of L/C payments will be carried out by the MoT with the Minister
Finance, Bank Indonesia, and relevant ministries  or institutions coordinated by the trade ministry.

“For contracts that have been agreed before this regulation released, can be suspended under the conditions of existence approval from the Minister of Trade,” said Lukita.

The exception to the obligation for payment of certain types of goods with L/C applies
for sample or sample goods, research or scientific development goods, and
promotion. For exporters who do not meet the terms of the L/C payment method, sanctions will be given.

“Sanctions can be in the form of written warnings, freezing, until revocation of permits,” he added.

Lukita continued, the new regulation is expected to provide legal certainty
for each stakeholder, encouraging the optimization and accuracy of foreign exchange earnings exports, as well as maintaining the stability of export prices for certain goods.

Written by Staff Editor, Email: theinsiderstories@gmail.com

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