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Friday, 27 March 15
INDONESIA: NEW REGULATION REQUIRES LETTER OF CREDIT FOR EXPORT OF PRODUCTS FROM NATURAL RESOURCES
 The Minister of Trade issued Ministerial Regulation No. 04/M-DAG/PER/1/2015 (“Regulation No. 4/2015”) on 5 January 2015. Regulation No. 4/2015 comes into effect from 1 April 2015.
Regulation No. 4/2015 applies to the export of the following prescribed products;
Coal
Unprocessed or partially refined Minerals including;
Iron concentrate | Copper concentrate | Lead concentrate | Zinc concentrate | Alumina | Nickel | Silver | Gold
Crude oil | Liquefied Natural Gas | Crude Palm Oil.
Once in effect, Regulation No. 4/2015 will require Indonesian exporters of the prescribed products to obtain a Letter of Credit from their product buyer for an amount equal to the value of the prescribed products sold prior to the export of the prescribed products.
The Letter of Credit must be received by an Indonesian foreign exchange bank.
The prescribed products cannot be exported without a Letter of Credit in compliance with Regulation No.4/2015.
The Minister shall appoint surveyors to confirm that a Letter of Credit has been received by the Indonesian exporter for the value of the prescribed products sold for the equivalent of (or greater than) the “world price” for the prescribed product. The surveyor shall issue a report which is to be provided to certain government agencies including Bank Indonesia and the Ministry of Finance (but not the Director General of Tax). The prescribed products cannot be exported without the surveyor’s report.
Exporters who do not comply with Regulation No.4/2015 may be subject to sanctions. The sanctions are not specified in Regulation No.4/2015 but may ultimately to suspension or revocation of their export and production licenses for ongoing violations.
Regulation No.4/2015 is subject to further implementing regulations (which have not yet been issued).
The Minister of Trade issued a similar regulation in 2009 (although the range of prescribed products included more agricultural commodities and less minerals and did not include oil & gas). The Minister of Trade revoked the regulation in 2010 stating that at that time, Indonesia’s foreign exchange reserves had improved and the regulation was no longer required.
The stated purpose of Regulation No.4/2015 is to “optimize and accurately record foreign exchange derived from exports while maintaining the stability and improvement of prices of exports”.
Regulation No.4/2015 does not include any transitional provisions so it appears actual export deliveries of prescribed products after 1 April 2015 will need to comply with the Regulation, even though the sales may be subject to a long terms sales contract entered before the enactment of Regulation No.4/2015.
Similarly, Regulation No.4/2015 requires the Letter of Credit to be issued for at least the “world price” of the prescribed product but the Regulation does not define the term “world price”.
One of the major export products subject to Regulation No.4/2015 is coal and the Government of Indonesia has its own “Indonesian Benchmark Price” for coal on which royalty is to be calculated and paid, however, it appears the pricing for coal for the purposes of Regulation No.4/2015 is “world price” and not the “Indonesian Benchmark Price”.
Regulation No.4/2015 also does not recognize that there may be many valid reasons for an exporter selling a prescribed product as less than “world price”. For example, if a buyer makes advance payments to an exporter or if a buyer commits to a long term supply contract with an exporter. (by: Philip Payne | ABNR)
Source: ABNR
About ABNR
ALI BUDIARDJO, NUGROHO, REKSODIPUTRO (ABNR) was founded in 1967 by professionals with a deep respect for the law and a keen interest in assisting clients, both foreign and domestic, to achieve their commercial goals within the Indonesian legal environment.
Ali Budiarjo, Nugroho, Reksodiputro is the exclusive member firm in Indonesia of Lex mundi - the world's leading network of independent law firms with in-depth experience in 100+ countries worldwide.
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Saturday, 28 March 15
THE DRY BULK FLEET AT BREAKING POINT - CLARKSONS
The severe oversupply in the bulkcarrier fleet has contributed to the current trough in the dry bulk market, putting considerable financial pressur ...
Friday, 27 March 15
WEEKLY U.S COAL OUTPUT FALLS 1.7% W-W; 7.9% Y-Y
COALspot.com – United States the world's one of the largest coal producers, produced approximately totaled an estimated 18.2 million ...
Thursday, 26 March 15
CHINA IRON ORE IMPORT FOR THE FIRST 2 MONTHS DECLINED BY 1.2 % Y-O-Y; PANAMAX AUSSIE/CHINA ROUNDS BEING FIXED IN THE $4 -5K RANGE - FEARNLEYS
Handy
There has been more activity in both hemispheres this week. Especially the USG market has picked up with more cargoes for prompter dates en ...
Thursday, 26 March 15
RATES FOR THE SMALLER SIZE SEGMENT CONTINUED TO IMPROVE LAST WEEK - INTERMODAL
To see green across the board is a rare occurrence in the Dry Bulk market nowadays and while the upside in which last week closed off is not of the ...
Thursday, 26 March 15
KYUSHU ELECTRIC POWER OF JAPAN HAS JOINED GLOBALCOAL ONLINE COAL TRADING PLATFORM
globalCOAL® announced today that Kyushu Electric Power, one of Japan’s largest utility companies, has joined its online coal trading plat ...
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- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- The University of Queensland
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Australian Coal Association
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
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