REGULATION OF THE MINISTER OF TRADE OF THE REPUBLIC OF INDONESIA
No. 19/M-DAG/PER/9/2005

ON
PROVISIONS ON THE IMPORT OF TEXTILE AND TEXTILE PRODUCTS

THE MINISTER OF TRADE OF THE REPUBLIC OF INDONESIA,

Considering :

• a. that in the framework of maintaining the business climate in the textile and textile products (TPT) sector so as to remain conducive in the domestic market and in order to prevent unfair trading practices inflicting losses on TPT industries and consumers, it is necessary to re-regulate policies on the import of TPT;
• b. that in connection with the matter in letter a, it is necessary to issue a regulation of the Minister of Trade;

In view of :

• 1. Trade Ordinance of 1934 (Statute Book of 1938 No. 86);
• 2. Law No. 5/1984 on industry (Statute Book of 1984 No. 22, Supplement to Statute Book No. 3274);
• 3. Law No. 7/1994 on Ratification of Agreement Establishing the World Trade Organization (Statute Book of 1994 No. 57, Supplement to Statute Book No. 3564);
• 4. Law No. 10/1995 on Customs Affairs (Statute Book of 1995 No. 75, Supplement to Statute Book No. 3612);
• 5. Law No. 5/1999 on Prohibition On Monopoly and Unfair Business Competition (Statute Book of 1999 No. 33, Supplement to Statute Book No. 3817);
• 6. Law No. 8/1999 on consumer protection (Statute Book of 1999 No. 42, Supplement to Statute Book No. 3821);
• 7. Presidential Decree No. 260/1967 on affirmation of tasks and responsibility of the Minister of Trade in the foreign trade sector;
• 8. Presidential Decree No. 187/M/2004 on the establishment of the United Indonesia Cabinet as already amended by Presidential Decree No. 8/M/2005;
• 9. Presidential Decree No. 9/2005 on the status, tasks, functions, organizational structures and working arrangements of state ministries;
• 10. Presidential Regulation No. 10/2005 on first-echelon organizational units and tasks of state ministries as already amended by Presidential Regulation No. 15/2005;
• 11. Decree of the Minister of Industry and Trade No. 229/MPP/Kep/7/97 on import general provisions;
• 12. Decree of the Minister of Industry and Trade No. 141/MPP/Kep/1/2003 on Special Importer Identity Number (NPIK);
• 13. Decree of the Minister of Industry and Trade No. 40/MPP/Kep/1/2003 on Importer Identity Number (API);
• 14. Regulation of the Minister of Trade No. 01/M-DAG/PER/3/2005 on the organization and working arrangement of the Ministry of Trade;

DECIDES :

To stipulate :

THE REGULATION OF THE MINISTER OF TRADE ON PROVISIONS ON THE IMPORT OF TEXTILE AND TEXTILE PRODUCTS

Article 1

Referred to in this regulation as:

• 1. Textile and Textile Products, hereinafter called TPT shall be fabrics in sheet and products using fabrics in sheet as raw material/auxiliary material subsumed into classification of imported goods/tariff heading (HS) as contained in Attachment I to this regulation.
• 2. Textile-Producer Importer, hereinafter called IP-Textile shall be companies having Producer Importer Identity Number (API-P) or Limited Importer Identity Number (API-T) approved to import TPT as raw material/auxiliary material needed for their production.
• 3. Recommendation shall be a letter issued by officials of related institutions/units authorized to give technical explanation and being not import license/approval.
• 4. Minister shall be the Minister of Trade.
• 5. Director General shall be the Director General of Foreign Trade, Ministry of Finance.

Article 2

TPT as contained in the list of unit I up to 19 in Attachment I to this regulation only can be imported by companies already securing recognition as IP-Textile with the provision that the TPT imported by IP-Textile are only used as raw material or auxiliary material for production of industries owned by the said IP-Textile and cannot be traded or handed over.

Article 3

(1) Recognition as IP-Textile as meant in Article 2 shall be stipulated by the Director General.

(2) In order to secure recognition as IP-Textile as meant in paragraph (1), the companies shall submit written application to the Director General by enclosing:

• a. Industrial Business License/Industrial Registry Number or other equivalent business license from the technical ministries/non-ministerial government institutions overseeing the business;
• b. Special Importer Identity Number of Textile and Textile Products (NPIK-TPT);
• c. Producer Importer Identity Number (API-P) or Limited Importer Identity Number (API-T);
• d. Nomor Pokok Wajib Pajak (NPWP);
• e. Recommendation from the Director General of Metal, Machine, Textile and Multifarious Industries, Ministry of Industry;
• f. Statement of Plan for the Need of Raw Material or Auxiliary Material and Marketing of Production for one year, legalized by personnel in responsible for companies in the model as contained in Attachment II to this regulation.

(3) The model of document of recognition as IP-Textile shall be as contained in Attachment III to this regulation.

Article 4

The Director General shall issue recognition or rejection of recognition as IP-Textile on the basis of the application as meant in Article 3 in not later than 10 (ten) working days as from the date of receipt of the application.

Article 5

Recognition as IP-Textile shall be effective for one year at the maximum and can be extended.

Article 6

(1) Companies already securing recognition as IP-Textile shall convey report on the realization of the import of textile in the form of Import Controlling Card to the Director General in this case the Director of Import, Ministry of Trade every 3 (three) months with a copy made available to the Director General of Metal, Machine, Textile and Multifarious Industries, Ministry of Industry.

(2) The report as meant in paragraph (1) shall be in the form of copy of the Import Controlling Card legalized by the companies.

Article 7

(1) The import of TPT as contained in Attachment I to this regulation, unless otherwise stipulated in column of remarks in the attachment, shall be subject to prior verification or technical inquiry in countries where the goods are loaded.

(2) The verification or technical inquiry as meant in paragraph (1) shall be done by surveyors appointed by the Minister.

(3) The verification or technical inquiry by the surveyors as meant in paragraph (2) shall cover, among others, data or information about countries of goods producers, specifications of goods covering HS Number, description of goods and composition of materials, quantity and kinds of goods.

(4) Surveyors shall give surveyor inspection identity as result of verification or technical inquiry in the form of a seal in transport package of the Full Container Load (FCL) type or surveyor inspection identity in the form of a label in goods or transport packages of other kinds.

(5) Based on the verification or technical inquiry, the surveyors as meant in paragraph (2) shall issue Surveyor Report (LS) as an import document.

(6) In connection with the implementation of the verification or technical inquiry as meant in paragraph (2), surveyors can collect compensation for the rendered service from importers.

Article 8

(1) In order to secure the appointment as executors of verification or technical inquiry into the import of TPT as meant in Article 7 paragraph (2), surveyors shall meet the following requirements:

• a. having experience as surveyor for 5 (five) years at the minimum;
• b. having branch or representative or affiliate abroad.

(2) Surveyors appointed as the executors of verification or technical inquiry into the import of TPT shall submit written report on activities of verification or technical inquiry into the import of TPT periodically, every month.

(3) The written report as meant in paragraph (2) shall be conveyed to the Director General of Foreign Trade in this case the Director of Import, Ministry of Trade in the first week of the ensuing month.

Article 9

(1) The obligation of verification or technical inquiry as meant in Article 7 shall not apply to the import of TPT:

• a. which are supplied into :
• 1. Bonded Zones or Bonded Warehouses stipulated on the basis of a decree of the Minister of Finance :
• 2. Sabang Free Trade Area;
• b. which constitute:
• 1. goods for the need of the government and other state institutions;
• 2. goods for the need of technology research and development;
• 3. goods belonging to technical and project assistance on the basis of Government Regulation No. 19/1955;
• 4. granted goods;
• 5. samples;
• 6. personal effects;
• 7. luggage of passengers or crew members of transport means or cross borders and promotion goods;
• 8. freights sent through courier by using aircraft;
• 9. freights having FOB Value of US$1,000.00 or less without courier by using aircraft.
• c. which secure the exemption from import duty and/or excise as well as value added tax and sales tax on luxury goods on the import of goods and/or materials to be processed, assembled or installed at other goods for exporting on the basis of facility of the Import Relief for Export Purpose (KITE) as regulated in Decree of the Minister of Finance No. 129/KMK.03/2004.

(2) The import of TPT as meant in paragraph (1) letter a, which are supplied wholly or partly into Other Indonesian Customs Area (DPIL) and domestic sales of TPT whose raw material comes from the import securing KITE facility as meant in paragraph (1) letter c shall be subject to prior verification or technical inquiry.

(3) The verification or technical inquiry as meant in paragraph (2) shall be executed by surveyors in places where the goods to be imported into DPIL or goods to be sold in the country are located.

Article 10

The verification or technical inquiry into the import of TPT by the surveyors as meant in Article 7 shall not reduce the authority of the Director General of Customs and Excise to undertake customs inspection.

Article 11

(1) Recognition as IP-Textile shall be frozen if:

• a. the relevant does not fulfill the obligation to convey the report as meant in Article 6 twice; or
• b. the relevant is in the course of investigation into alleged crime related to misuse of recognition as IP-Textile.

(2) The freezing of recognition as IP-Textile can be liquidated after the relevant secures clarification from the Director General with regard to the negligence in fulfilling the obligation as meant in Article 6 or the relevant is not proven committing the crime related to misuse of recognition as IP-Textile.

(3) The freezing of recognition as IP-Textile as meant in paragraph (1) as well as the liquidation of recognition as IP-Textile as meant in paragraph (2) shall be done by the Director General.

Article 12

(1) Recognition as IP Textile shall be revoked if:

• a. the relevant does not fulfill the obligation to convey the report as meant in Article 6 more than twice; or
• b. the relevant changes and/or supplements and/or replaces contents mentioned in document of recognition as IP-Textile; or
• c. the relevant is declared guilty by the court for crime related to misuse of recognition as IP-Textile.

(2) The revocation of recognition as IP-Textile as meant in paragraph (1) shall be done by the Director General.

Article 13

Without reducing the importance of the provision in Article 8, in order to implement the provision in Article 7 paragraph (2), surveyors appointed by the Minister shall be as stipulate in Decree of the Minister of Industry and Trade No. 307/MPP/Kep/11/2003 on the Appointment of Surveyors as Executors of Verification or Technical Inquiry into the Import of Textile and Textile Products (TPT).

Article 14

(1) With the enforcement of this regulation, Decree of the Minister of Industry and Trade No. 732/MPP/Kep/10/2002 on Textile Import Procedures and Decree of the Minister of Industry and Trade No. 276/MPP/Kep/4/2003 on Verification or Technical Inquiry into the Import of Textile and Textile Products (TPT) as already amended several times and the latest by Decree of the Minister of Industry and Trade No. 646/MPP/Kp/10/2003 shall be declared null and void.

(2) Recognition as IP-Textile already issued on the basis of Decree of the Minister of Industry and Trade No. 732/MPP/Kep/10/2002 shall be declared to remain effective until the validity period of the recognition expires.

(3) Surveyor Report (LS) already issued on the basis of Decree of the Minister of Industry and Trade No. 276/MPP/Kep/4/2003 on Verification or Technical Inquiry into the Import of Textile and Textile Products (TPT) 9s already amended several times and the latest by Decree of the Minister of Industry and Trade No. 646/MPP/Kp/10/2003 shall be declared to remain effective until customs clearance of the import of the said TPT is settled.

Article 15

(1) Besides IP-Textile as meant in Article 2, the Minister or officials appointed by the Minister can appoint other companies to import TPT as contained in the serial list 1 up to 19 in Attachment I to this regulation.

(2) Companies securing appointment to import TPT as meant in paragraph (1) only can supply to industries not importing TPT directly and shall be prohibited from trading TPT on the domestic market.

Article 16

The exception from the provisions regulated in this regulation only can be stipulated by the minister or officials appointed by the minister.

Article 17

Technical provisions and matters not yet regulated in this regulation can be stipulated by the Director General.

Article 18

The regulation shall come into force as from the date of stipulation.

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

Stipulated in Jakarta
On September 30, 2005
THE MINISTER OF TRADE,
Sgd
MARI ELKA PANGESTU