DECREE OF THE MINISTER OF FINANCE
No.347/KMK.01/1999

CONCERNING
THE EXEMPTION FROM IMPORT DUTY ON THE IMPORT OF GOODS AND/OR MATERIALS FROM BONDED WAREHOUSES TO BE PROCESSED, ASSEMBLED, OR INSTALLED IN OTHER GOODS FOR MANUFACTURING MOTOR VEHICLES DESTINED FOR EXPORT

THE MINISTER OF FINANCE,

Considering :

• a. that in order to increase exports of motor vehicles, it is necessary to exempt from import duty on the import of goods and/materials from bonded warehouses to be processed, assembled or installed in other goods 4r)T manufacturing motor vehicles destined for export;
• b. that in relation thereto, it is deemed necessary to issue a decree of the Minister of Finance;

In view of :

• 1 . Law No.10/1995 on customs affairs (Statute Book of 1995 No.75, Supplement to Statute Book No.3612);
• 2. Government Regulation No.33/1996 on bonded stockpiling areas (Statute Book of 1998 No.50, Supplement to Statute Book No.3638) as already amended by Government Regulation No.43/1997 (Statute Book of 1997 No.40, Supplement to Statute Book No.3717);
• 3. Presidential Decree No.122/M/1998;
• 4. Decree of the Minister of Finance No.399/KMK.01/1996 on bonded warehouses;

DECIDES:

To stipulate :

THE DECREE OF THE MINISTER OF FINANCE ON THE EXEMPTION FROM IMPORT DUTY ON THE IMPORT OF GOODS AND/OR MATERIALS FROM BONDED WAREHOUSES TO BE PROCESSED, ASSEMBLED OR INSTALLED IN OTHER GOODS FOR MANUFACTURING MOTOR VEHICLES DESTINED FOR EXPORT.

Article 1

Referred to in this decree as :

• 1 . Import shall be an activity to supply goods into customs areas;
• 2. Export shall be an activity to release goods from customs areas;
• 3. Exemption shall be the exemption from import duty on the import of goods and/or materials to be processed, assembled or installed in other goods for manufacturing motor vehicles destined for export;
• 4. Customs and Excise Officials shall be employees of the Directorate General of Customs and Excise appointed in certain positions to execute certain tasks;
• 5. Bonded warehouses shall be buildings or places with certain limits, in which activities such as stockpiling, packaging, sorting, packing, labeling or other activities in line with their function as the center for the distribution of imported goods for other Indonesian customs areas (DPIL), bonded zones or re-export without further processing are carried out.

Article 2

Goods and/or materials originating in bonded warehouses to be processed, assembled or installed in other goods for manufacturing motor vehicles, which are imported by automotive assembly manufacturers, shall be given exemption facilities.

Article 3

In order to obtain the facilities as meant in Article 2, manufacturers shall fulfill the following requirements:

• 1. submitting applications to the Director General of Customs and Excise by using the form as meant in specimen stipulated in Attachment I to this decree;
• 2. being submitted by automotive assembly manufacturers imported goods and/or goods from bonded warehouses;
• 3. attaching lists of linkage between imported goods and/or materials and exported motor vehicles by using the form as meant in the specimen stipulated in Attachment II to this decree;
• 4. using goods and/or materials imported from bonded warehouses to be processed, assembled or installed in other goods for manufacturing motor vehicles wholly destined for export.

Article 4

The applications as meant in Article 3 shall be processed for approval or rejection in the period of 14 (fourteen) working days as from the date of receipt of complete and correct applications.

Article 5

In the case of the applications being approved, applicants shall be obliged:

• 1. to deliver guarantees in the form of bank guarantees, customs bonds or other guarantees to the Directorate General of Customs and Excise with the value being the same as import duty owed before the release of goods and/or materials is done;
• 2. to keep and maintain documents, books and reports connected with import and export activities at least for 10 (ten) years;
• 3. to convey reports on exports to the Directorate General of Customs and Excises at least once in 6 (six) months by using the forms as meant in specimen stipulated in Attachments III and IV to this decree, along with the following documents :
• a. photocopies of Import Declarations (PlB) already given release approval by Customs and Excise officials;
• b. photocopies of receipts of guarantees from the Directorate General of Customs and Excise;
• c. photocopies of Export Declarations (PEB) already securing loading approval from Customs and Excise officials;
• d. photocopies of Bills of Lading or airway bills.
• 4. to convey reports on the delivery of goods to the country for using imported goods and materials securing the exemption facilities from the Directorate General of Customs and Excise at least once in 6 (six) months by using the forms as meant in specimens stipulated in Attachments V and VI to this decree, along with the following documents :
• a. photocopies of Import Declarations (PIB) already given release approval by Customs and Excise officials;
• b. photocopies of SSBC.

Article 6

The granting of the exemption facilities as meant in Article 2 shall be done by the Director General of Customs and Excise on behalf of the Minister of Finance in the form of a decree of the Minister of Finance as meant in the specimen stipulated in Attachment VII to this decree.

Article 7

(1) Exports shall be realized in the period of 6 (six) months as from the date of imports.

(2) In the case of the provision as meant in paragraph (1) being fulfilled, the guarantees shall be returned not later than 14 (fourteen) working days after reports on the realization of exports are approved.

(3) In the case of the provision as meant in paragraph (1) failing to be fulfilled, the owed import duty on the import of the goods and/or materials shall be paid and subjected to interest as high as 2% (two percents) of the import duty owed per month, starting from the maturity period of 6 (six) months up to the realization of exports for 12 (twelve) months at the maximum.

(4) In the case of the exports being realized after the import duty is paid for 12 (twelve) months at the maximum as from the date of imports, import duty restitution can be given.

Article 8

(1) In the case of the delivery to the country being realized before the period of 6 (six) months, import duty shall be paid plus an administrative sanction in the form of a fine as high as 100% (one hundred percents) of the import duty which must be paid.

(2) In the case of the delivery to the country being realized after the period of 6 (six) months, the guarantees shall be disbursed and subjected to interest as high as 12% (twelve percents) of the import duty which must be paid.

Article 9

Supervision over the granting of the exemption facilities as meant in this decree shall be done by the Director General of Customs and Excise.

Article 10

The implementation of audits in the customs field can be made at any time in accordance with the provisions effective for the implementation of audits in the customs field.

Article 11

In the case of any failure in accounting for goods and/materials whose production must be exported or must be available at manufacturers, recipients of the facilities shall be obliged to pay import duty plus a fine as high as 100% (one hundred percent) of the import duty which must be paid.

Article 12

(1) The remaining goods and/or materials resulting from the production and damaged goods and/or materials imported from bonded warehouses can be sold in the country with the impart duty being set at 5% (five percents) of the selling price.

(2) The goods as meant in paragraph (1) shall be examined by the Directorate General of Customs and Excise, before being sold in the country.

(3) On the remaining goods and/or materials and damaged goods and/or materials as meant in paragraph (1) which must be available at manufacturers and can not be accounted for, recipients of the facilities shall be obliged to pay import duty which is owed plus a fine as high as 100% (one hundred percents) of the import duty which should be paid.

Article 13

(1) The remaining goods and/or materials resulting from the production and damaged goods and/or materials can be destroyed.

(2) The remaining goods and/or materials resulting from the production and damaged goods and/or materials which are destroyed shall be exempted from import duty.

(3) Applications for destruction shall be submitted to Heads of Customs and Excise Service Offices overseeing the relevant manufacturers.

(4) The results of the destruction shall be contained in accounts of destruction.

Article 14

The payment as meant in Article 12 paragraph (1) and the destruction as meant Article 13 shall be accounted for to the Director General of Customs and Excise by using the form as meant in specimen stipulated in Attachment VIII to this decree.

Article 15

(1) In the case the results of audits showing an excess of the exemption, the excess shall be returned plus interest as high as 2% (two percents) per month for 12 (twelve) months at the maximum, starting from the date of imports.

(2) In the case of the excess of the exemption as meant in paragraph (1) matching criminal elements, recipient of the exemption facilities shall be liable to criminal sanctions in accordance with the provisions stipulated in Law No.10/1995.

Article 16

Technical provisions needed for the implementation of this decree shall be further stipulated by the Director General of Customs and Excise.

Article 17

This decree shall come into force as from the date of stipulation.

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

Stipulated in Jakarta
On June 24, 1999

THE MINISTER OF FINANCE,
sgd
BAMBANG SUBIANTO