Updated Regulations on Rules and Certificate of Origin for Imported Goods in Trade Safeguard Measures
The Ministry of Trade (“MoT”) has enacted MoT Regulation No. 16 of 2024 on Rules of Origin and Certificate of Origin for Imported Goods in the Implementation of Trade Safeguard Measures (“MoTR 16/2024”). The regulation has revoked MoT Regulation No. 37/MDAG/PER/9/2008 on Certificate of Origin for Imported Goods in Trade Safeguard Measures (“MoTR 37/2008”) where importers were required to include Certificate of Origin (“COO”) for their goods from the exempted countries for additional safeguard duties and/or quotas. In this new regulation, MoT aims to optimize the implementation of trade security measures to restore or prevent threat of serious losses suffered by the domestic industry that produce similar or directly competitive goods, because of the surge of imported goods (“Safeguard Measures”), by regulating the rules of origin and COO for imported goods.
In this article, we provide a general overview of MoTR 16/2024, particularly the: (i) Exclusion of Safeguard Measures on Imported Goods from Developing Countries; (ii) Verification Process over Goods’ Originality and the COO; and (iii) Concluding Remarks.
Exclusion of Safeguard Measures on Imported Goods from Developing Countries
COO is an import document for the purpose of eligibility of imported goods to receive tariff reductions or exemptions depending on the type. The Indonesian Government has determined 2 (two) types of COOs:
a. Preferred COO is defined as a document used by the exporting country to obtain tariff reduction or exemption facilities for their goods. This type of COO is granted by the relevant Indonesian authorities based on international agreements.
b. Non-Preferred COO is defined as a document used by the exporting country for the goods without such tariff reduction or exemption facilities granted by Indonesia based on international agreements.
Under MoTR 16/2024, imported goods originated from developing countries can be excluded from having the Safeguard Measures, if the exporters can provide COO in every import (Article 2 Paragraph (3) jo. Article 1 Paragraphs (1) – (2) of MoTR 16/2024).
Verification Process over Goods’ Originality and the COO
Importers of goods with Preferred COO that are subject to Safeguard Measures shall verify the origin of their goods and the Preferred COO. The verification is subject to the prevailing laws and regulations concerning the verification of COO in relation to the import duty tariff for imported goods, based on the international agreement or treaty (Article 2 Paragraph (4) of MoTR 16/2024).
On the other hand, Non-Preferred COO must be enclosed in every import, which contains data and/or information of, at least the:
(a) name and address of the exporter;
(b) name and address of the importer;
(c) name of the manufacturer;
(d) HS Code;
(e) number of COO;
(f) origin criteria of goods;
(g) statement by the exporter, or producer and exporter;
(h) certification by the issuing agency of COO;
(i) details to identify consignment in the form of invoice number, date of departure, name of ship or flight number, and port of unloading; and
(j) quantity of goods.
(Article 9 of MoTR 16/2024)
Rules of origin for imported goods with Non-Preferred COO must contain the following information: (i) Origin Criteria, (ii) Consignment Criteria, and (iii) Procedural Provisions. For your ease of reading, kindly refer to the table below for the details of each criterion:
| Criteria | |
| Origin Criteria |
1. Goods wholly obtained or produced in 1 country, including imported goods that are wholly obtained from the sources available in the exporting country, or the ones using raw materials that are wholly obtained from the sources available in the exporting country. It can be in the forms of: (a) minerals and other naturally occurring substances; (b) agricultural and forestry goods; (c) living animals; (d) goods produced from living animals; (e) goods obtained from hunting, fishing, or capture fisheries; (f) goods that are directly processed on board of the exporting country flagged ship; (g) goods that are directly processed and/or produced using the raw materials on board the exporting country flagged ship, inside or outside the territory of the exporting country; (h) goods taken from the bottom of the sea or underground layer under the bottom of the sea outside the territory of the exporting country; (i) remains and waste generated from the operational fabrication, processing, or consumption; and (j) goods produced in the exporting country by using raw materials that are entirely originating from the exporting country. 2. Goods not wholly obtained or produced in 1 country, imported goods in which the production process uses non-originating materials, which must experience a change of classification in 2 first digits of HS Code or change in chapter (CC). |
| Consignment Criteria |
1. Goods delivered directly from the exporting country to Indonesia without transit to another country; 2. Goods not delivered directly from the exporting country, or goods on delivery with a transit in another country, provided that: (a) the transit is required for geographical reasons or special considerations related to transportation requirements; (b) the goods are not traded or consumed in the transit destination country; and/or (c) the goods do not undergo production process other than the loading and unloading, as well as other measures required to maintain their good condition. The delivery of the goods under point 2 above must be proven by the importer by showing the customs documents from the intermediary party or other related documents to the Directorate General of Customs and Excise (“DGCE”). |
| Procedural Provision | Importers who import goods from developing countries shall submit a Non-Preferred COO issued by the exporting country to DGCE, subject to the prevailing laws and regulations, and by meeting the rules of origin as stipulated in Article 9 of MoTR 16/2024 (i.e., the origin criteria, consignment criteria, and procedural provisions). |
(Articles 3 to 8 of MoTR 16/2024) If the submitted Non-Preferred COO is insufficient to prove the fulfilment of rules of origin and/or there is a doubt about the validity of data and/or information in the Non-Preferred COO, DGCE may conduct a field/site visit verification (Article 10 of MoTR 16/2024).
Concluding Remarks
The recent amendments through MoTR 16/2024 bring substantial changes regarding COO, and convenience due to the presence of tariff reduction or exemption. The previous MoTR 37/2008 only regulated one type of COO for imported goods, with no additional criteria nor provisions on tariff reduction or exemption. If there is an indication of insufficient data and/or inaccurate information in the rules of origin and the Non-Preferred COOs, businesses should practically prepare for possible field/site visit verifications, and ensure that all documents are accurate, complete, and consistent with the actual, physical condition of the goods.
The article above was prepared by Audria Putri (Senior Associate), Mia Sari (Senior Associate), and M. Irfan Yusuf (Associate).
