REGULATION OF THE MINISTER OF TRADE
No. 02/M-DAG/PER/2/2006

CONCERNING
RULES ON EXPORT OF PRODUCTS OF FORESTRY INDUSTRIES

THE MINISTER OF TRADE OF THE REPUBLIC OF INDONESIA,

Considering :

• a. that, in the framework of acceleration and effectiveness of implementation of regulations on export of products of forestry industries and in maintaining of sustainable availability of raw materials for products of forestry industries originating from conserved forest, in increasing of export of products of forestry industries with high added value and business certainty, it is deemed necessary to revoke Decree of the Minister of Industry and Trade No. 647/MPP/Kep/10/2003 and to re-stipulate the above regulations;
• b. that, in the realization of export of products of forestry industries, there are technical problems regarding specifications of exportable products;
• c. that, based on the considerations as meant in paragraphs a and b above, it is necessary to issue Regulation of the Minister of Trade.

In view of :

• 1. Trade Ordonance 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. 10/1995 on Customs (Statute Book of 1995 No. 75, Supplement to Statute Book No. 3612);
• 4. Law No. 41/1999 on Forestry (Statute Book of 1999 No. 80, Supplement to Statute Book No. 3888);
• 5. Government Regulation No. 34/2002 on Forest Areas (Statute Book of 2002 No. 66, Supplement to Statute Book No. 4206);
• 6. Presidential Decree No. 260/1967 on Confirmation of Duties and Responsibilities of the Minister of Trade in Foreign Trade Affairs;
• 7. Presidential Decree No. 187/M/2004 on Establishment of United Indonesia Cabinet as already amended several times and latest by Presidential Decree No. 171/M/2005;
• 8. Presidential Regulation No. 9/2005 on Positions, Duties, Organizational Structures, and Work Procedures of State Ministries of the Republic of Indonesia as already amended several times and latest by Presidential Regulation No. 62/2005;
• 9. Presidential Regulation No. 10/2005 on Organizational Units and Duties of Echelons I of State Ministries of the Republic of Indonesia as already amended several times and latest by Presidential Regulation No. 63/2005;
• 10. Presidential Instruction No. 4/2005 on Elimination of Illegal Logging in Forest Areas and Circulation of Logs in Indonesian Territory;
• 11. Joint Regulation of the Minister of Industry, the Minister of Trade, and the Minister of Forestry No. 08/M-IND/PER/2/2006, No. 01/M-DAG/PER/2/2006, and No. P.8/Menhut-VI/2006, on Revocation of Joint Decree of the Minister of Forestry and the Minister of Industry and Trade No. SK..350/Menhut-VI/2004 and No. 698/MPP/Kep/9/2004 on Restriction of Export of Railway Sleepers Made of Wood and Timber for Lumber;
• 12. Decree of the Minister of Industry and Trade No. 558/MPP/Kep/12/1998 on General Rules on Export as already amended several times and latest by Regulation of the Minister of Trade No. 07/M-DAG/PER/4/2005;
• 13. Regulation of the Minister of Trade No. 01/M-DAG/PER/3/2005 on Organization and Work Procedure of the Ministry of Trade.

Observing :

• 1. Letter of the Minister of Forestry No. S.717/Menhut-11/2005 dated November 30, 2005 on Format of Joint Regulation of the Minister of Industry, the Minister of Trade, and the Minister of Forestry on Restriction of Export of Railway Sleepers Made of Wood and Timber for Lumber;
• 2. Letter of the Minister of Industry No. 476/M-IND/12/2005 dated December 5, 2005 on Joint Regulation and Regulation of the Minister of Trade.

DECIDES:

To revoke :

DECREE OF THE MINISTER OF INDUSTRY AND TRADE NO. 647/MPP/KEP/10/2003 DATED OCTOBER 16, 2003 ON RULES ON EXPORT OF PRODUCTS OF FORESTRY INDUSTRIES.

To stipulate :

REGULATION OF THE MINISTER OF TRADE ON RULES ON EXPORT OF PPODUCTS OF FORESTRY INDUSTRIES.

Article 1

Hereinafter referred to as :

• 1. Railway Sleepers Made of Wood is wood sawn or cut lengthwise, sliced or skinned, planed or not, sandpapered or not, with thickness, width, and length not limited from all kinds of wood, included in HS 4406.
• 2. Timber for Lumber is wood sawn or cut lengthwise, sliced or skinned, not planed, not sandpapered, not end-jointed with thickness of more than 6 mm included in HS 4407.
• 3. Surface Four Side (S4S) is processed wood produced from timber for lumber, which is dried and its fours sides are flattened so that its surface becomes flat and fine, included in HS 4407.
• 4. End-Jointed is processed wood acquired by jointing timber for lumber, which is already dried and planed, included in HS 4407.

Article 2

Export of railway sleepers made of wood (included in HS 4406) as meant in Article 1 paragraph 1 and timber for lumber (included in HS 4407) as meant in Article 1 paragraph 2 is restricted in the Indonesian territory.

Article 3

Products of forestry industries, which export is regulated, are products as specified in Attachment I to this Regulation.

Article 4

(1) Products of forestry industries may be exported if meeting the criteria as meant in Attachment II to this Regulation.

(2) Exceptions from the provisions as set forth in Attachment II to this Regulation shall be stipulated by the Minister of Trade or his authorized officer after getting the opinion of the Ministry of Industry and the Ministry of Forestry.

Article 5

(1) Export of products of forestry industry as contained in Attachment I may only be operated by Forestry Companies that are already certified as Registered Exporters of Products of Forestry Industry (ETPIK) by the Minister of Trade, in this matter, the Director General of Foreign Trade of the Ministry of Trade.

(2) Forestry companies certifiable as ETPIK are forestry companies that already obtain industrial business license issued pursuant to the applicable laws and already fulfilled the terms and conditions stipulated in this Regulation.

Article 6

(1) Export of products of forestry industries included in HS.4408, HS.4410, and HS.4412 shall be done based on Cost and Freight (C&F), Cost, Insurance, and Freight (CIF), and payment shall be remitted through the bank.

(2) Export of products of forestry industries included in HS.4407, HS.4408, HS.4409, HS.4410, HS.4411, HS.4412, HS.4413, HS.4415, HS.4418. HS.4421.90.50.00, HS.9406.00.92.00 must obtain endorsement from Forestry Industry Revitalization Agency (BRIK).

(3) The endorsement as meant in paragraph (2) shall function as supporting document of Export Declaration (PEB).

(4) Procedure of endorsement by BRIK shall be further stipulated in Regulation of the Director General of Foreign Trade of the Ministry of Trade.

(5) BRIK must report the implementation of endorsement every month to the Minister of Trade, in this matter the Director General of Foreign Trade of the Ministry of Trade, and the carbon copies of the report shall be delivered to the Director General for Agricultural and Chemical Industries of the Ministry of Industry and the Director General of Forestry Production Development of the Ministry of Forestry.

Article 7

(1) To obtain certificate of ETPIK, forestry companies must file a request in writing to the Director General of Foreign Trade of the Ministry of Trade via the Director for Export of Agricultural and Forestry Products.

(2) The request as meant in paragraph (1) must be completed with the following documents:

• - Audit Report and recommendation from technical institution in the region responsible for forestry industry affairs pursuant to the applicable regulations;
• - Photocopy of Industrial Business License;
• - Photocopy of Certificate of Registration of Company (TDP);
• - Photocopy of Taxpayer's Identification Number (NPWP); and
• - Photocopy of Deed of Establishment and the amendments pursuant to the applicable regulations.

(3) The Director General of Foreign Trade or the Ministry of Trade shall issue approval or rejection to the request as meant in paragraph (1) within not later than ten (10) working days since receipt of the application in complete form.

(4) If necessary, an audit might be conducted into the requesting company by officer of the Directorate General of Foreign Trade of the Ministry of Trade and or another institution appointed by the Director General of Foreign Trade of the Ministry of Trade.

Article 8

(1) Companies that already obtain certificate of ETPIK prior to issuance of this Regulation, a verification might be performed on the companies into the legality of documents, existence, export and production activities according to the licenses they possess and implementation of the required regulations.

(2) The verification as meant in paragraph (1) shall be performed by officer of the Directorate General of Foreign Trade of the Ministry of Trade, the Directorate General for Agricultural and Chemical Industries of the Ministry of Trade, and the Directorate General for Forestry Production Development of the Ministry of Trade jointly and or by an independent surveyor appointed by the Minister of Trade.

(3) The result of the verification as meant in paragraph (2) shall be written on a Verification Report (LHV-ETPIK).

(4) The LHV-ETPIK as meant in paragraph (3) must be submitted to the Directorate General of Foreign Trade of the Ministry of Trade.

(5) Procedure for performance of verification of holders of ETPIK will be further stipulated in Regulations of the Director General of Foreign Trade of the Ministry of Trade.

Article 9

(1) On export of certain wood products, verification/technical examination must be performed.

(2) The certain wood products as meant in paragraph (1) are wood products included in Ex. HS.4407 (S4S, door jamb or window jamb in S4S form, door jamb or window jamb in S4S form and end jointed), HS.4409, Ex HS.4415 (palette), Ex. HS.4418 (door jamb and window jamb), and HS.9406.

(3) The verification/technical examination as meant in paragraph (1) shall be performed by an independent surveyor appointed by the Minister of Trade.

(4) The surveyor as meant in paragraph (3) must have experiences in verification of export of products of forestry industries and must have a wide network of services in Indonesian territory.

(5) Expenses arising from the verification/technical examination as meant in paragraph (3) shall be paid by the government.

(6) Result of the verification/technical examination as meant in paragraph (3) :

• a. If in accordance with the applicable regulations, shall be written on a Surveyor's Report (LS) to be used as supporting document of Export Declaration (PEB);
• b. If not in accordance with the applicable regulations, shall be written on Report on Result of Examination (LHP).

(7) The report on result of verification/technical examination of export of certain wood products as meant in paragraph (6) must be submitted by the surveyor every month to the Director General of Foreign Trade of the Ministry of Trade and the carbon copies of the report shall be delivered to the Director General for Agricultural and Chemical Industries of the Ministry of Industry and the Director General for Forestry Production Development of the Ministry of Forestry.

(8) Procedure for performance of verification/technical examination of export of certain wood products will be further stipulated in Regulation of the Director General of Foreign Trade of the Ministry of Trade.

Article 10

Forestry companies already certified as ETPIK as meant in Article 5 must send report of :

• a. Annual production plan;
• b. Realization of production per semester;
• c. Annual export plan;
• d. Export realization per semester

to the Director General of Foreign Trade of the Ministry of Trade and the carbon copies of the above report shall be delivered to the Director General for Agricultural and Chemical Industries of the Ministry of Industry; the Director General for Forestry Production Development of the Ministry of Forestry, and the Forestry Industry Revitalization Agency (BRIK) using the format as specified in Attachments III, IV, V, and VI to this Regulation.

Article 11

On forestry companies already certified as ETPIK as meant in Article 5, their ETPIK certificate will be frozen if the companies and/or the Management/Directors of the companies:

• a. do not operate production and export within one (1) year;
• b. do not perform the obligations as meant in Article 10 within one (1) year;
• c. do not report every amendment of data on one or more of the documents as meant in Article 7 paragraph (2);
• d. are assumed as violating the applicable regulations on export; or
• e. are being investigated by competent investigators because of assumed as committing criminal act with regard to misuses of ETPIK.

Article 12

Certificate of ETPIK, which is already frozen, as meant in Article 11, could be re-activated if:

• a. The holder operates production and will operate export;
• b. The holder already reported amendment of data on the documents as meant in Article 7 paragraph (2);
• c. Within less than thirty (30) years since date of freezing, the holder already performed the obligations as meant in Article 10;
• d. The holder is not proven as violating the provisions of Article 11 paragraph d;
• e. An order of stop of investigation is already issued by the investigator; or
• f. The holder is declared not guilty/freed from all legal claims based on a final and binding court verdict.

Article 13

On forestry companies already certified as ETPIK as meant in Article 5, their ETPIK Certificate will be revoked if the companies and/or the Management/Directors of the companies :

• a. At their own request, close down their production or export operations;
• b. their ETPIK Certificate has been frozen for two (2) times;
• c. are declared guilty by the court for criminal act relating to misuses of ETPIK based on a final and binding court verdict;
• d. based on the result of verification as meant in Article 8 paragraph (1) are proven not acting in accordance with the licenses they possess; or
• e. are proven violating export regulations as meant in Article II paragraph d.

Article 14

(1) The freezing, reactivating, and revocation of ETPIK Certificate as meant in Articles 11, 12, and 13 shall be done by the Director General of Foreign Trade of the Ministry of Trade.

(2) The Director General of Foreign Trade of the Ministry of Trade shall send a letter of notification regarding the freezing, reactivating, and revocation of ETPIK certificate as meant in paragraph (1) to holder of ETPIK certificate and the carbon copies of the letter shall be submitted to the Director General of Customs and Excise of the Ministry of Finance, the Director General for Agricultural and Chemical Industries of the Ministry of Industry, the Director General of Forestry Production Development of the Ministry of Forestry, and the Forestry Industry Revitalization Agency (BRIK).

Article 15

Delivery of products of forestry industries as sample goods or goods for exhibition abroad shall be excepted from the provisions of Article 5 paragraph (1) with prior approval of the Director General of Foreign Trade of the Ministry of Trade.

Article 16

Enforcement regulations of this Regulation may be further stipulated by the Director General of Foreign Trade of the Ministry of Trade.

Article 17

ETPIK Certificate already issued prior to issuance of this Regulation shall be declared valid as long as it is not in contradiction with the provisions of this Regulation.

Article 18

This Regulation shall be valid thirty (30) days since the date it is stipulated.

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

Stipulated in Jakarta
On February 2, 2006
THE MINISTER OF TRADE OF THE REPUBLIC OF INDONESIA
Sgd
MARI ELKA PANGESTU

Attachment (English)

Attachment (Indonesian, PDF)