REGULATION OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE
No. P-01/BC/2007

CONCERNING
THE FIFTH AMENDMENT TO DECREE OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE
No. KEP-81/BC/1999
ON
TECHNICAL DIRECTIVES FOR STIPULATION OF CUSTOMS VALUE FOR CALCULATING IMPORT DUTY

THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE,

Attachment

Considering:

• a. that in order to enable the effective and efficient stipulation of the customs value as well as optimal use of price database, it is necessary to amend Decree of the Director General of Customs and Excise No. KEP-81/BC/1999 on Stipulation of Customs Value for Calculating Import Duty as has already been amended several times and the latest by Regulation of the Director General of Customs and Excise No. P-17/BC/2005;
• b. that based on the consideration as intended in paragraph a above, it is necessary to stipulate a regulation of the Director General of Customs and Excise on the Amendment to Decree of the Director General of Customs and Excise No. KEP-81/BC/1999 on Stipulation of Customs Value for Calculating Import Duty;

In view of:

• 1. Law No. 7/1994 on Ratification of the Agreement Establishing the World Trade Organization (Statute Book of 1994 No. 57, Supplement to Statute Book No. 3564);
• 2. Law No. 10/1995 on Customs (Statute Book of 1995 No. 75, Supplement to Statute Book No. 3612) as has already been amended by Law No. 17/2006 (Statute Book of 2006 No. 93, Supplement to Statute Book No. 4661);
• 3. Decree of the Minister of Finance No. 690/KMK.05/1996 dated October 18, 1996 on Customs Value for Calculating Import Duty;
• 4. Decree of the Minister of Finance No. 491/KMK.05/1996 dated July 31, 1996 on the Basis for Calculating Import Duty on Imported Goods;
• 5. Decree of the Minister of Finance No. 453/KMK.04/2002 on Customs Procedures in the Import Sector as has already been amended by Decree of the Minister of Finance No. 548/KMK.04/2002 on the Amendment to Decree of the Minister of Finance No. 453/KMK.04/2002 on Customs Procedures in the Import Sector;
• 6. Decree of the Director General of Customs and Excise No. KEP-81/BC/1999 on Technical Directives for Stipulating Customs Value for Calculating Import Duty as already amended several times and the latest by Regulation of the Minister of Finance No. P-17/BC/2005;

HAS DECIDED:

To Stipulate:

THE REGULATION OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE ON THE FIFTH AMENDMENT TO DECREE OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE No. KEP-81/BC/1999 ON TECHNICAL DIRECTIVIS FOR STIPULATION OF CUSTOMS VALUE FOR CALCULATING IMPORT DUTY.

Article 1

Several provisions in Decree of the Director General of Customs and Excise No. KEP-81/BC/1999 on Technical Directives for Stipulating Customs Value for Calculating Import Duty as already amended several times by:

• a. Decree of the Director General of Customs and Excise No. KEP-33/BC/2001 dated June 7, 2001;
• b. Decree of the Director General of Customs and Excise No. KEP-44/BC/2002 dated June 17, 2002;
• c. Decree of the Director General of Customs and Excise No. KEP-69/BC/2003 dated June 7, 2003;
• d. Decree of the Director General of Customs and Excise No. P-17/BC/2005 dated September 29, 2005.

Shall be amended as follows:

1. The provision in Article 1 supplemented by sub-paragraph I up to sub-paragraph p so that the article entirely reads as follows:

"Article 1

In this Decree refer to:

a. "Mutually related" or "related" parties shall be;

• (i) employees or executives in a company concurrently employees or executives in their companies;
• (ii) those acknowledged/ascertained legally as partners in trade;
• (iii) employees and employers;
• (iv)those with any of them directly or indirectly controlling five percent or more of the share that they own in a company;
• (v) those with any of them directly or indirectly supervising other parties;
• (vi) those directly or indirectly supervised by the third party;
• (vii) those directly or indirectly controlling the third party simultaneously; or
• (viii) member of a family, namely husband, wife, parent, children, younger brother/sister and older brother/sister (sibling or not), grandfather, grandmother, grandchildren, uncle, aunt, nephew, parent in law, son/daughter in law and sister/brother in law.

b. "Having produced" comes into definition of having planted, made or explored.

c. Identical goods are goods sharing common in all aspects, covering physical aspect, quality and reputation, as well as:

• (i) having produced by the same producer in the same country; or
• (ii) having produced by other producers in the same country in the case of goods identical with those produced by the same producer in the same country being not available.

d. Similar goods are goods, which have not been the same in all aspects but have the similar material components and characteristics, commercially exchangeable and sharing the same function, as well as:

• (i) having produced by the same producer in the same country: or
• (ii) having produced by other producers in the same country in the case of goods identical with those produced by the same producer in the same country being not available.

e. Concrete evidences or objective and measurable data are evidences or data based on documents really available and the documents contain indicators, value or certain parameters in the form of figure, world and/or sentence.

f. commercial level is the level or status of buyer, such as wholesaler, retail and end-user.

g. Goods of the same class and kind are goods subsumed into a group of goods produced by a specified industrial sector, also including identical and similar goods.

h. Import place is place where customs liabilities are settled by giving up import declaration.

i. Terminologies of delivery FOB , C&F, CIF, Ex Works and DDP are as defined in INCOTERM.

j. Article VII of GATT 1994 is any of the articles of the General Agreement on Tariff and Trade 1994, ruling Valuation for Customs Purposes.

k. GATT Valuation Agreement is an agreement on the implementation of Article VII of the General Agreement on Tariffs and Trade 1994.

l. Low Risk PIB is Import Declaration submitted by importers as buyers categorized as low risk in the importer profile made by the Head Office of the Directorate General of Customs and Excise.

m. Director General is the Director General of Customs and Excise.

n. Price Database (DBH) is a series of data about CIF prices of imported goods already calculated on the basis of the available data.

o. Customs Value Information (INP) is notification to importer to give up declaration of facts related to transaction and/or import of the said goods in the form of Customs Value Declaration (DNP).

p. Customs Value Declaration (DNP) is response from importers to INP issued by the official in connection with facts related to transactions and/or import of the said goods."

2. The provision in Chapter III is amended so that Chapter III reads as follows:

"CHAPTER III
PROCEDURES FOR EXAMINATION AND STIPULATION OF CUSTOMS VALUE

Article 20

(1) In the framework of stipulating the customs value, Customs and Excise officials shall examine customs value notification mentioned in document of Import Declaration (PIB) and all document becoming attachments.

(2) The examination as intendedintended in paragraph (1) shall be applied to:

• a. Reasonability of customs value notification mentioned in PIB;
• b. Profile of importers to PIB wherein customs value unreasonable and data about comparison of identical goods are not found;
• c. Fulfillment of provision on customs value to PIB wherein customs value is unreasonable and data about comparison of identical goods are not found and result of study on investor profile show medium risk importer category;
• d. Result of physical inspection, in the case of goods being subjected to physical inspection.

(3) In the case of kind and/or quantity being found unsuitable on the basis of result of physical inspection, the customs value shall be stipulated on the basis of any of Method II up to Method VI in accordance with hierarchy of the use.

(4) In the case of result of the physical inspection as intended in paragraph (2) sub-paragraph d being unusable by Customs and Excise Officials for examining the customs value, the Customs and Excise Officials can return the result of the physical inspection to goods inspector for completing so that it can show the quantity and kind of goods, including specification of goods clearly.

(5) The examination as intended in paragraph (2) shall be applied to PIB, which must or must not be subjected to physical inspection, unless otherwise importers deserve to priority lane.

(6) The examination as intended in paragraph (2) sub-paragraphs a, b, c and d shall be applied to importers belonging to the priority lane, which import:

• a. Provisionally imported goods;
• b. Re-imported goods;
• c. Goods subjected to Note of Intelligence Result (NHI); and
• d. Certain goods stipulated by the Director General, shall be inspected as intended in paragraph (2) sub-paragraph a, sub-paragraph c and sub-paragraph d.

Article 21

(1) The examination of responsibility as intended in Article 20 paragraph (2) sub-paragraph a shall be done by means of comparing the customs value notified in PIB to the price of identical goods contained in Price Database I.

(2) The customs value notified in PIB shall be categorized:

• a. Reasonable, on the case of the examination of reasonability as intendedintended in paragraph (1) showing that the notified customs value is found:
• - lower below 5%;
• - lower 5%;
• - the same; or
• - higher than the price of identical goods in Price Database I.
• b. Unreasonable, in this case of the examination of reasonability as intended in paragraph (1) showing that the notified customs value lower than 5% than the price of identical goods in Price Database I.

(3) In the case of result of the reasonability test finding that:

• a. the customs value is reasonable, the customs value is accepted unless otherwise the result of physical inspection shows that kind and/or quantity of the declared goods are not in accordance with declaration;
• b. the customs value is unreasonable or comparing data about identical goods are not found Price Database I, the Customs and Excise Officials shall examine the importer profile as intended in Article 20 paragraph (2) sub-paragraph b.

Article 22

(1) The examination of the importer profile as intended in Article 20 paragraph (2) sub-paragraph b shall be done by means of stipulating category of importers whose customs value is not reasonable or comparing data about identical goods are not found in Price Database I on the basis of the available importer profile.

(2) The importer profile shall be made and issued by a committee issued by the Director General.

(3) The importer profile shall consist of 3 (three) categories, namely Low Risk Importers, Medium Risk Importers and High Risk Importers with the criteria stipulated by the committee as intended in paragraph (2).

Article 23

(1) In the case of the declared customs value being unreasonable or data about comparing price of identical goods being not found in Price Database I and PIB being given up by low risk importers, the declared customs value shall be accepted unless otherwise result of physical inspection show that kind and/or quantity of the declared goods are not in accordance with the declaration, the customs value shall be stipulated on the basis of any of Method II up to Method VI in accordance with hierarchy of the use as intended in Article 20 paragraph (3).

(2) In the case of the declared customs value being unreasonable or data about comparing price of identical goods being not found in Price Database I and PIB being given up by medium risk importers:

• a. The Customs and Excise Officials shall issue Customs Value Information (INP) sent to importers through electronic media, their proxies or express mail in not later than the next working day after the result of examination of importer profile shows that the importers belong to medium-risk category.
• b. The importers shall be obliged to give up Customs Value Declaration and attachments in the form of documents related to transaction/import in not sub-paragraph than 7 (seven) working days after the date of dispatch of INP to the Customs and Excise officials whose name is mentioned in INP.
• c. The Customs and Excise Officials shall examine the fulfillment of provisions on the customs value as intended in Article 20 paragraph (2) to the Customs Value Declaration (DNP), documents becoming attachments to DNP and other documents related to the import of goods whose customs value in the course of examination, namely:
• 1) identification whether the imported goods are subjects of trading transactions;
• 2) examination of requirements for the value of trading transaction as intended in Article 6; and
• 3) inquiry into substances which should be supplemented and/or subtracted from the transaction value.
• d. In the case of DNP being not given up in the period as intended in paragraph (2) sub-paragraph b, the Customs Value shall be stipulated on the basis of any Method II up to Method VI in accordance with hierarchy of the use.
• e. Model of INP shall be regulated in Attachment VIII to Decree of the Director General No. KEP-81/BC/1999.
• f. DNP as well as procedures for completing DNP is regulated in Attachment III to this regulation.

(3) in the case of the declared customs value being unreasonable or data about comparing price of identical goods being not found in Price Database I and PIB being given up by high risk importers, the Customs and Excise Official shall stipulate the customs value on the basis of any of Method II up to Method VI in accordance with hierarchy of the use.

Article 24

(1) In the case of result of examination of the fulfillment of provision on the customs value as intended in Article 23 paragraph (2), applied to medium-risk importers showing that:

• a. Imported goods are subjects of trading transactions;
• b. The requirements for the trading transaction value as intended in Article 6 are fulfilled;
• c. The substances which should be supplemented and/or subtracted from the transaction value can be counted and based on objective and measurable data as well as examination;
• d. Result of physical inspection shows that kind and/or quantity of the declared goods are in accordance with the declaration; and
• e. The objective and measurable data show that the truth or accuracy of the transaction value declaration is undoubted, the customs value shall be accepted on the basis of Method I.

(2) In the case of result of examination of the fulfillment of provision on the customs value as intended in Article 23 paragraph (2), applied to medium-risk importers showing that:

• a. Imported goods are not subjects of trading transactions;
• b. The requirements for the trading transaction value as intended in Article 6 are not fulfilled;
• c. The substances which should be supplemented and/or subtracted from the transaction value cannot be counted and based on objective and measurable data as well as examination;
• d. Result of physical inspection shows that kind and/or quantity of the declared goods are not in accordance with the declaration; and
• e. The objective and measurable data show that the truth or accuracy of the transaction value declaration is doubted, the customs value shall be stipulated on the basis of any of Method II up to Method VI in accordance with hierarchy of the use.

Article 25

(1) In the case of:

• a. imported goods being not subject of trading transactions;
• b. requirements for the trading transaction value as intended in Article 6 being not fulfilled; and/or
• c. costs which should be supplemented to the transaction value being not yet stipulated/being not yet able to stipulate at the moment of delivery of customs declaration; all importers shall give up DNP without necessary to wait for dispatch of INP by the customs and excise officials.

(2) The customs declared by the importers as intended in paragraph (1) shall be stipulated on the basis of any of Method II up to Method VI in accordance with hierarchy of the use.

(3) DNP as intended in paragraph (1) shall be given up upon the delivery of hardcopy of PIB.

Article 26

(1) Result of verification or reasonability of the customs value declaration, examination and stipulation of the customs value by the Customs and Excise officials shall be mentioned in Customs Value Examination and Stipulation Sheet (BCF 207) as regulated in Attachment V to this regulation.

(2) The Customs Value Examination and Stipulation Sheet (BCF 2.7) as intended in paragraph (1), after completed in accordance with result of examination, shall be enclosed to PIB as well as constitute document of customs value stipulation by the Customs and Excise Officials in Customs and Excise Service Offices.

Article 27

(1) Complete, true and accurate facts and/or data about transaction and/or import shall be needed for stipulating the customs value accurately and truthfully. For the purpose, in the case of Customs and Excise Official asking, the importers shall be obliged:

• a. to give up all information, documents and/or declarations required in the framework of stipulating the customs value;
• b. to give explanation verbally and in writing about method that the importers adopt to calculate the customs value and other matters related to transaction and/or the import of the said goods.

(2) In the case of importers or their proxies failing to meet the request submitted by the Customs and Excise Officials as intended in paragraph (1), the Customs and Excise Officials can use other relevant data, which are available, to stipulate the customs value.

Article 28

(1) Based on request from importers, the Customs and Excise Officials stipulating the customs value shall be obliged to give explanation about stipulation of the customs value of the imported goods.

(2) In giving the explanation, all confidential information//data shall be treated secretly by Customs and Excise Officials."

3. The provision in Article 31 is amended so that the article reads as follows:

"Article 31

(1) Price Database (DBH) shall consist of DBH I and DBH II.

(2) Price Database I shall be formulated and updated by the Head Office of the Decorate General of Customs and Excise.

(3) Sources of data needed for formulating and updating DBH I shall be DBH II, PIB whose customs value has been acceptable on the basis of Method I, catalogues, brochures and other price information coming from the country and other countries, which have been re-calculated.

(4) Price Database II shall be formulated and updated by Customs and Excise Service Offices, operationally executed by Heads of Customs Sections or officials appointed by Heads of Service Offices.

(5) Sources of data needed for formulating and updating DBH II shall be low-risk PIB whose customs value has been accepted on the basis of the transaction value of the imported goods (Method I) and kinds of the imported goods in accordance with core business of the low risk importers.

(6) Further provision on the formulation/updating and use of price database shall be regulated in Attachment VI to this regulation."

4. The provision in Article 32 is amended so that the article reads as follows:

"Article 32

(4) The function of Price Database (DBH) I shall be as follow:

• a. instrument (parameter) in the activity of verification of reasonability of customs value declaration; and
• b. data available in the Customs Area, which are usable as the basis for stipulation of the customs value on the basis of any of the methods in Method VI.

(5) The function of Price Database (DBH) II shall be as follow:

• a. a test value in the framework of identifying whether relations between seller and buyer influence the price or not;
• b. a source of data for formulation of DBH I.

(3) DBH II cannot be used as the basis for stipulating the customs value."

5. The provision in Attachment II is amended so as to be as stipulated in Attachment I to this regulation.

6. The provision in Attachment VII is amended so as to be as stipulated in Attachment II to this regulation.

7. The provision in Attachment IX is amended so as to be as stipulated in Attachment III to this regulation.

8. The provision in Attachment X is amended so as to be as stipulated in Attachment IV to this regulation.

9. The provision in Attachment XII is amended so as to be as stipulated in Attachment V to this regulation.

10. The provision in Attachment XIII is amended so as to be as stipulated in Attachment VI to this regulation.

Article II

(1) With the enforcement of this regulation, Decree of the Director General of Customs and Excise No. Kep-69/BC/2003, Regulation of the Director General of Customs and Excise No. P-17/BC/2005 on the Amendment to Decree of the Director General of Customs and Excise No. Kep-81/BC/1999 on Technical Directives for Stipulation of the Customs Value for Calculating Import Duty as well as Circular of the Director General No. SE-13/BC/2002 on Price Database II shall be revoked and declared null and void.

(2) This regulation shall come into force from March 1, 2007.

(3) For Public cognizance, the regulation shall be announced in Gazette of the Republic of Indonesia.

Stipulated in Jakarta
On January 17, 2007
THE DIRECTOR GENERAL
Signed
ANWARD SUPRIJADI
NIP 120050332

Attachment to REGULATION OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE
No. P-01/BC/2007