Shippers, please note: Indonesian customs clearance "red light period" warning!

The Republic of Indonesia, as a key country along the Belt and Road Initiative and the largest economy in Southeast Asia, is of great importance. According to the latest data, Indonesia's total population is estimated to reach about 278 million in 2023, making it the fourth most populous country in the world. The huge population base not only brings significant demographic dividends to the country, but also breeds a huge potential consumer market.

However, it is worth noting that despite its many economic advantages, Indonesia is widely regarded as one of the countries with the highest customs clearance difficulties in the world. Complex customs procedures and regulations pose a challenge to international trade, which also affects the efficiency and cost of business activities to a certain extent. Therefore, while enjoying the opportunities brought by Indonesia's vast market, shippers also need to pay special attention to and be prepared to deal with related logistics and trade barriers.

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What is the Indonesian customs clearance “red light period”?

In Indonesia, customs are divided into red light customs and green light customs. If a certain export product has a red light at Indonesian customs, customs will pay more attention to protecting the local enterprises that produce such goods. Then when the exporting enterprise exports goods to Indonesia, it will encounter stricter customs measures.

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Generally speaking, from December to March of the following year, it is the red light period for import customs clearance in Indonesia. Indonesian customs will work with other law enforcement agencies to conduct strict inspections on import customs clearance. Customs clearance procedures require more procedures and take longer than before. If the operation is not done properly, more fees will be incurred accordingly. For some red license plate heads, they will be 100% checked.

At the same time, this is also a means of increasing tax revenue. As the saying goes, "a new official starts with three fires", when the senior personnel of the Indonesian Customs are changed, they will also use the customs red light period to assert their rights and gain benefits. Sometimes the trade gap between imports and exports is relatively large, and the government will adjust the gap between the two by adjusting the corresponding non-tariff thresholds. In recent years, due to the proliferation of drugs and the rampant terrorists, all countries will strengthen the inspection of entry and exit, especially the inspection of imported goods.

Measures to deal with the "red light period"

When we export to Indonesia, we need to pay attention to the following things, in addition to collecting the final payment before shipment:

01For different types and quantities of goods, it is necessary to clarify the cargo information before shipment. Be sure to communicate with local Indonesian merchants about the latest local customs policies and whether such products will encounter customs clearance obstacles. If necessary, you should also cooperate with a strong destination port agent.

02If Indonesian merchants do not have the corresponding import rights, or have the import rights but the qualifications are relatively shallow, they are generally more likely to be inspected (obtaining the import license API, or even applying for the Master List, does not mean that they can clear customs without obstacles). Therefore, DDP operation can be adopted, that is, using some import header agents with better qualifications to complete customs clearance.

03 Regardless of whether it is DDP or DDU operation, it is recommended to apply to the shipping company for 14 days free time of detention when booking a container. In this way, even if the customs clearance time is longer than usual, no container rental will be incurred or reduced.

* Goods arriving in Indonesia must pay taxes within 30 days. At the Port of Jakarta, if the goods exceed the deadline, they will be sent to a simple warehouse of the relevant supervisory agency, which is affiliated with the National Port Company. The goods can be stored there for 1 to 3 months. If they are not taken after the deadline, they will be auctioned in the warehouse of the Port Authority, and the proceeds from the auction will be used to pay the storage fee. The balance after deducting the auction fee will be retained for 3 years. If no one claims it after 3 years, it will be handed over to the Indonesian Treasury. Goods are not allowed to be returned before paying customs duties.

04 Since January 2016, Indonesia has been very strict on many products. For example, LED lights, machinery (old), machines (old), textiles, etc. need to undergo SGS pre-loading inspection. You need to apply abroad and issue the SGS NO. The carrier will make an appointment for pre-loading inspection, so the chance of being stuck during customs clearance at the destination port is almost zero.

05Confirm the corresponding import rights and qualifications with the Indonesian buyers in China, and then clarify the loading requirements. Do the best possible work before shipment, and you can complete the import and export related work as efficiently as possible.

06Exported goods must be consistent with the actual packing list. If the destination port finds that the goods are inconsistent with the actual packing list, invoice, and bill of lading copy, the fine will be quite expensive. Some customers prefer to use abbreviations or do not list details. This does not matter for exports to other countries, but for Indonesian products, it must be as detailed as possible.

07 Before shipment, be sure to go through a professional export agency, review the customs clearance documents, and conduct detailed inspections during the loading period. Try to be as detailed as possible before shipment. The quantity of goods needs to be counted clearly, and possible loopholes should be strictly reviewed before shipment from the port of departure, and then arrange shipment to avoid trouble at the port of destination to the greatest extent.

08 In addition, there is another very important point: the verification risk of Indonesia’s FORM E.

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Source: Focus Vision, Shipping Network and online materials, etc.

Disclaimer: This article is for industry information sharing and reference only.