to Indonesian

DECREE OF MINISTER OF FINANCE
No. 585/KMK.05/1996

ON
585/KMK.05/1996THE USE OF BANK GUARANTEE AS SECURITY FOR THE PAYMENT OF IMPORT DUTY, EXCISE, ADMINISTRATIVE FINES AND TAX ON THE IMPORT OF GOODS

THE MINISTER OF FINANCE,

Considering :

that with the enforcement of Law No.10/1995 on customs affairs, it is deemed necessary to regulate the use of bank guarantees as guarantees for the payment of state levies on the import of goods by issuing a decree of the Minister of Finance.

In view of :

• 1. Dutch East Indies Tariff Law (Statute Book of 1925 No.448), as already amended and supplemented the latest by Law No.9/1968 (Statute Book of 1968 No.53);
• 2. Law No.6/1983 on general provisions and taxation procedures (Statute Book of 1983 No.49, Supplement to Statute Book No.3262) as already amended and supplemented the latest by Law No.9/1994 (Statute Cook of 1994 No.59, Supplement to Statute Book No.3566);
• 3. Law No.7/1983 on income tax (Statute Book of 1983 No.50, Supplement to Statute Book No.3263), as already amended and supplemented the latest by Law No.10/1994 (Statute Book of 1994 No.60, Supplement to Statute Book No.3567);
• 4. Law No.8/1983 on value added tax on goods and services and sales tax on luxury goods (Statute Book of 1983 No.51, Supplement to Statute Book No.3264) as already amended and supplemented the latest by Law No.11/1994 (Statute Book of 1994 No.61, Supplement to Statute Book No. 3568);
• 5. Law No.10/1995 on customs affairs (Statute Book of 1995 No.75, Supplement to Statute Book No.3612);
• 6. Law No.11/1995 on excise (Statute Book of 1995 No.76, Supplement to Statute Book No.3613).

DECIDES:

To Stipulate :

THE DECREE OF THE MINISTER OF FINANCE CONCERNING THE USE OF BANK GUARANTEE AS SECURITY FOR THE PAYMENT OF IMPORT DUTY, EXCISE, ADMINISTRATIVE FINES AND TAX ON THE IMPORT OR GOODS

Article 1

The bank guarantees referred to in this decree shall be guarantees in the form of papers issued by banks which result in the obligation to pay to the parties receiving guarantees if the guaranteed parties default.

Article 2

(1) The model and content of the bank guarantees as meant in Article 1 shall be as attached (see Attachment I to this decree);

(2) The bank guarantees which do not follow the example as meant in paragraph (1) cannot be accepted as guarantees.

Article 3

The bank guarantees can be used as guarantees for the payment of:

• a. state levies on the import of goods due to the granting of facilities in bonded stockpiling sites;
• b. state levies on the temporary import of goods;
• c. state levies on the import of goods granted a permit for their earlier release with import duty and other import levies being postpponed;
• d. underpaid state levies due to the customs and excise officer's determination of tariffs and/or customs value to which an objection is filed;
• e. administrative fines stipulated by the customs and excise officer, to which an objection is filed.

Article 4

The amount of guarantees covered by the bank guarantees shall be at least:

• a. for state levies as meant in Article 3, letter a, b, c or d, equal to the amount of import duty, excise and tax still to be paid for the import of goods.
• b. for administrative fines as meant in Article 3 letter e, equal to the amount of administrative fines still to be paid.

Article 5

Bank guarantees that can be accepted as guarantees for state levies shall be bank guarantees issued by perception foreign exchange banks.

Article 6

(1) The validity of bank guarantees shall:

• a. for state levies as meant in Article 3 letter a, b or c, cover the period of suspension plus 30 (thirty) days;
• b. for underpaid state levies as meant in Article 3 letter d and administrative fines as meant in Article 3 letter e, cover 90 (ninety) days.

(2) The validity of bank guarantees may only be extended with prior consent from the Director General of Customs and Excise or the authorized official, with a copy addressed to the bank issuing the bank guarantees before their maturity date.

Article 7

(1) State levies guaranteed with the bank guarantees as meant in Article 3 shall be settled through the perception foreign exchange bank issuing the said bank guarantees.

(2) A deviation from the provisions of paragraph (1) may only be done with prior consent front the Director General of Customs and Excise or the authorized official.

Article 8

(1) If the guaranteed party still does not/does not fulfill his obligation within 30 (thirty) days before the maturity date of the bank guarantees, then the Directorate General of Customs and Excise shall, by using a form as meant in Attachment II to this decree, ask the bank issuing tile bank guarantees to disburse the bank guarantees by crediting them against the account of the Directorate General of Customs and Excise no later than 5 (five) days after the maturity date of the bank guarantees.

(2) If the Directorate General of Customs and Excise does not ask the Link issuing the bank guarantees as meant in paragraph (1), no later than two weeks after the maturity date of the bank guarantees, the bank issuing the bank guarantees shall ask confirmation from the Directorate General of Customs and Excise about whether or not the guaranteed party has fulfilled his obligation.

(3) The Directorate General of Customs and Excise shall give reply to the request for confirmation as meant in paragraph (2) before the maturity date of the bank guarantees.

(4) If until the maturity date of the bank guarantees the bank issuing the bank guarantees has not received any confirmation from the Directorate General of Customs and Excise as meant in paragraph (3), then the bank guarantees shall be declared null and void for the sake of law, without having to abolish the state claim to the guaranteed party.

Article 9

If the bank issuing the bank guarantees does not disburse the bank guarantees within 5 (five) working days after the maturity date of the bank guarantees as meant in Article 8 paragraph (1),

• a. The Directorate General of Customs and Excise shall be authorized to refuse new bank guarantees issued by the relevant bank until the obligation is fulfilled.
• b. The Directorate General of Customs and Excise shall immediately present :
• 1) a letter of the transfer of task to collect claims to import duty, excise and administrative fines on the import of goods by using a form as meant in Attachment II to this decree, to the Head of the State Receivership Office (KP3N) sharing the same domicile as the bank for further processing in accordance with the law in force;
• 2) a notification on tax owed for the import of goods by using a form as meant in Attachment IV to this decree, to the Head of the Tax Service sharing the same domicile as the bank for further processing in accordance with the law in force.

Article 10

The Director General of Customs and Excise shall stipulate further technical rules to implement this decree, if required.

Article 11

This decree shall take effect as from the date of stipulation.

For public cognizance, this decree shall be announced by placing it in the State Gazette of the Republic of Indonesia.

Stipulated in Jakarta
On September 23, 1996

THE MINISTER OF FINANCE
sgd.
MARIE MUHAMMAD