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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.
If you believe an article violates your rights or the rights of others, please contact us.
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Sunday, 08 March 15
FREIGHT RATES FROM INDONESIA TO INDIA IS TRENDING UP
COALspot.com: The freight market continued to see gains this week and all the indices were rose except for Cape index. The BDI was increased 4.62 p ...
Friday, 06 March 15
BALTIC DRY INDEX: IS THIS POWERFUL INDICATOR SIGNALING A GLOBAL RECESSION? - STREET AUTHORITY
Although memories of the Great Recession linger, a case can be made that better days lie ahead.
That’s because central banks around the ...
Friday, 06 March 15
U.S. WEEKLY COAL PRODUCTION ROSE 3.5% WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.1 million short tons (mmst) of coal ...
Thursday, 05 March 15
PANAMAX : THE ATLANTIC ROUND IS NOW PAYING AROUND US$ 5K PER DAY
COALspot.com: Handy - The activity in the handy/supra segment is back. “ We see more fresh cargo in the market for 2nd half March dates ...
Thursday, 05 March 15
INDIA WILL BE THE LARGEST DRIVER OF GLOBAL SEABORNE COKING COAL DEMAND GROWTH IN 2015 - WOOD MACKENZIE
Global demand growth will remain weak because of China’s negative demand growth.
COALspot.com: At Coaltrans India, Wood Mackenzie says I ...
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- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Australian Coal Association
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- The University of Queensland
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
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