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CIRCULAR OF THE DIRECTOR GENERAL OF CUSTOMS AND EXCISE
No. SE-2/BC/2011

CONCERNING
OPTIMIZING CONTROL OF EXPORT AND/OR INTER ISLAND TRANSPORTATION OF PALM OIL, CRUDE PALM OIL (CPO) AND THEIR DERIVATIVE PRODUCTS

DIRECTOR GENERAL OF CUSTOMS AND EXCISE,

Attachment

To:

• 1. Director of Enforcement and Investigation
• 2. The Head Regional Offices within the Directorate General of Customs and Excise;
• 3. The Head of the Main Service Offices of Customs and Excise;
• 4. The Head of Control and Service Office of Customs and Excise;
• throughout Indonesia

In order to increase the effectiveness of supervision on the export and/or inter island transportation of goods, as well as to prevent illegal trade of commodities associated with palm oil, crude palm oil (CPO) and their derivative products, it is submitted as follows:

1. National policy to maintain the stability of economic growth, including maintain adequate domestic demand of CPO through the imposition of export levy of the palm oil, CPO and their derivative products.

2. In accordance with Regulation of the Minister of Finance No. 67/PMK.011/2010 dated March 22, 2010 concerning the Stipulation of Export Goods subjected to Export Levy and the Export Levy Tariff, and Regulation of the Minister of Finance No. 214/PMK.04/2008 dated December 16, 2008 concerning the Collection of Export Levy, those commodities in paragraph 1 above are subject to export levy.

3. In the practice of commodities trading in paragraph 1 above, they are possible illegal transportation activities, caused by the increasing of international price and the imposition of export levy progressively, with modes such as:

• a. direct export smuggling are not protected by customs documents;
• b. export smuggling without customs notification or customs obligations under the pretext of inter island transportation that is equipped with or without a Sailing Permit (SIB) and the ship manifest, namely:
• 1) transportation to the cruise lines are not uncommon;
• 2) transfer of cargo between ships (ship to ship) in the waters of Indonesia or maritime border with other countries;
• 3) transportation under the pretext of sending between Bonded Zone;
• 4) inclusion of the type of goods as commodities other than palm oil, CPO and their derivative products.
• c. notification of the quantity, type and/or tariff post (HS) in PEB is different with is supposed to avoid the imposition of Export Levy; and
• d. realization of the loading of export goods more than 7 (seven) days from the date of PEB registration to avoid the rising price of Export and higher Export levy.

4. That to secure the rights of state finances and compliance with the customs provisions associated with these commodities in paragraph 1 above, it is necessary optimal control on:

• a. increase intelligence activities in order to early detection of violation;
• b. increase patrol activities and enforcement operations in the event of any indication of a violation;
• c. implementation of an optimal handling of violations.

5. In the framework to improve the intelligence activities as intended in paragraph 4.a, shall do these steps:

• a. collect data and analyze information related to the activities of loading, transporting and unloading of export goods and/or inter islands transportation, including coordination with the related parties or institutions;
• b. updating corporate data and submit monthly reports on loading and unloading through the relevant regional office to the Director of Enforcement and Investigation with the format as stated in Attachments I and II of this Circular Letter;
• c. submit information on the inter island transportation to the destination office before departure of transportation means, and the destination office confirm (cross check) to the office of origin after the unloading, with copies to the Director of Enforcement and Investigation and the relevant Head of Regional Office at the earliest opportunity through the medium of facsimile, radiogram or email with the format as stated in Attachments III and IV of this Circular Letter, and
• d. submit information related to the violation by using the Enforcement Information (IP) and other intelligence products as stipulated in the Regulation of the Director General No. P-53/BC/2010 concerning Control Procedures.

6. In the framework to increase patrol activities and enforcement operations as intended in paragraph 4.b, shall do these steps:

• a. to control the activities of loading, transporting and unloading of export and/or inter islands goods, as well as perform testing to the type of goods to laboratory (if required);
• b. implement the harbor patrol and marine patrol to perform checks on the Sailing Permit (SIB), the ship manifest and other documents, with the Independent Patrol scheme, Joint Operation (KSO), Under Operation Control (BKO), Integrated Patrol as stipulated in the Regulation of the Director General No. P-53/BC/2010 concerning Control Procedures;
• c. carry out the action if found any indication of violation of customs on export; and
• d. submit report of the results of actions as stipulated in the Letter of the Director General of Customs and Excise No. S-275/BC/2010 dated March 24, 2010 on the Reporting of Enforcement and Investigation Data.

7. In the framework to improve the handling of violations of the activities as intended in paragraph 4.c, shall do these steps:

• a. conduct checking on the prosecution to determine the presence or absence of a violation or customs offense in export;
• b. determine payment of export levy in case there is under payment of export levy by mistake in Export Price and the Export Levy Tariff, and
• c. carry out investigations in the event of a customs offense in export as intended in Article 102A and Article 103 paragraph a. of Law No. 10/1995 as amended by Law No. 17/2006 concerning Customs.

8. Director of Enforcement and Investigation conduct monitoring and evaluation of the implementation of this circular.

9. With the publication of this circular:

• a. Circular of the Director General of Customs and Excise No. SE-22/BC/1998 dated May 6, 1998 concerning Procedures for Inter Islands Shipping of Palm Oil and Derivatives Products, as well as Fresh Fruit Bunches and Palm Heart;
• b. Circular of the Director of PPKC on behalf of Director General of Customs and Excise No. SE-01/BC.8/2008 dated February 8, 2008 concerning the Traffic Control Optimization of Fuel Oil and CPO;
• c. Letter of the Director General of Customs and Excise No. S-43/BC/2011 dated January 17, 2011 with subject the Traffic Control Optimization of CPO and Derivatives Commodities;
• d. Letter of the Director of Enforcement and Investigation No. S-244/BC.5/2008 dated March 12, 2008 with subject the Improvement Supervisory on the Transportation of Crude Palm Oil (CPO) Inter Region by using Radiogram;
• e. Letter of the Director of Enforcement and Investigation No. S-265/BC.5/2008 dated March 17, 2008 with subject the Increased Control and Request for Loading and Unloading Locations Data of CPO and derivative products for Export and Inter Islands Destinations;
• f. Letter of the Director of Enforcement and Investigation No. S-320/BC.5/2010 dated May 10, 2010 with subject Increasing Control the Export in the Framework to Export Levy Revenue Optimization; and
• g. Letter of the Director of Enforcement and Investigation No. S-183/BC.5/2011 dated February 17, 2011 with subject Assertion on Improving Traffic Control on the CPO and Derivatives Commodities;
• along the set traffic control of palm oil, CPO and their derivatives commodities is revoked and declared no longer valid.

This was stated to be implemented with full responsibility.

Stipulated in Jakarta
on March 21, 2011
DIRECTOR GENERAL,
signed,
THOMAS SUGIJATA
NIP 19510621 197903 1 001

Copies to:

• 1. Secretary of Directorate General of Customs and Excise;
• 2. The Directors and Researcher within Directorate General of Customs and Excise Environment;
• 3. Head of Internal Obedient Center of Customs and Excise.