to Indonesian

GOVERNMENT REGULATION OF THE REPUBLIC OF INDONESISA
No. 33/1996

ON
BONDED STORAGE

THE PRESIDENT OF THE REPUBLIC OF INDONESIA,

Elucidation

Considering :

• a. that to increase the competitiveness of export products on the global market, there is need to Improve efficiency through among others, the punctual supply of raw materials to the domestic Industry, the availability of promotional facilities in support of the marketing of industrial products, and the granting of facilities in the customs, excise and taxation sector;
• b. that in conjunction with the above matter and In accordance with Article 44 of Law No. 10/1995 on the Customs Affairs. it is deemed necessary to design certain places within custom areas as bonded stockpiling sites by issuing a Government Regulation.

In view of:

• 1. Article 5 paragraph (2) of the 1945 Constitution;
• 2. Law No. 6/1983 on general provisions and taxation procedures (Statute Book of 1983 No. 49, Supplement to Statute Book No. 3262), as already amended by law No. 9/1994 (Statute Book of 1994 No. 59, Supplement to Statute Book No. 3566),
• 3. Law No. 7/1983 on income tax (Statute Book of 1983 No. 50, Supplement to Statute Book No. 3263), as already amended the latest by law No. 10/1994 (Statute Book of 1994 No. 60, Supplement to Statute Book No. 3567);
• 4. Law No. 8/1983 on value added tax and sales tax on luxury goods (Statute Book of 1983 No. 51, Supplement to Statute Book No. 3264) as already amended by law No. 11 /1994 (Statute Book of 1994 No. 61, Supplement to Statute Book No.3568);
• 5. Law No. 10/1995 on customs affairs (Statute Book of 1995 No. 75, Supplement to Statute Book No. 3612);
• 6. Law No. 11/1995 on excise (Statute Book of 1995 No. 76, Supplement to Statute Book No. 3613).

DECIDES:

To stipulate:

THE GOVERNMENT REGULATION ON BONDED STORAGE

CHAPTER I
GENERAL PROVISIONS

Article 1

Referred to in this Government Regulation as:

• 1. Bonded Storage shall be buildings, places or areas within customs areas, which meet certain requirement which are used for stockpiling, processing, displaying, and,/or making available goods for sale with special treatment in the customs, excise and taxation sectors, and which may take the form of bonded zone bonded warehouses, entrepots for display, or duty free shops.
• 2. Bonded zones shall be buildings, places or areas with certain limits, in which activities of manufacturing good and materials, activities of designing, engineering, sorting, testing (Initial and final), and packing goods and materials of import origin or goods and materials from other Indonesian customs areas, are carried out with output mainly for exports.
• 3. Bonded warehouses shall be buildings or places with certain limits, in which activities of stockpiling, packing, sorting, packing, labeling, cutting a other activities, are carried out in line with their function as distribution centres for goods of import origin to be delivered to other Indonesian customs areas, bonded zones, or to be re-exported without processing.
• 4. Entrepots for display shall be buildings or places with certain limits, in which industrial goods of import origin or Industrial goads from customs areas are put on display on an international scale.
• 5. Duty free shops shall be buildings with certain limits, which are used for selling goods of Import origin or goods from customs areas, to Individuals eligible to buy the goods in certain limited amounts with import duty, excise and tax exempted.
• 6. Operators shall be limited liability companies, cooperatives with the status as statutory bodies or foundations, which possess, control, manage, and make available facilities and infrastructure in the interests of other parties to carry on business in bonded stockpiling sites operated based on licenses.
• 7. Companies shall be limited liability companies or cooperatives which carry on business in bonded stockpiling sites.

Article 2

(1) Goods or materials of import origin that are taken into bonded stockpiling sites :

• a. shall be granted suspension of import duty payments;
• b. shall be granted excise exemptions;
• c. shall not be subject to collection of Value Added Tax (PPN), Sales Tax on Luxury Goods (PPnBM) and Income Tax Article 22 (PPh Article 22).

(2) The delivery of domestically made taxable goods to bonded stockpiling sites shall not be subject to collection of PPN and PPnBM.

(3) The entry of excisable goods into bonded stockpiling sites from other Indonesian customs areas shall be granted excise exemptions.

(4) Goods or materials that are granted facilities as meant in paragraphs (1), (2) and (3) shall not constitute goods for relevant companies' own consumption in the relevant bonded stockpiling sites.

Article 3

(1) Bonded stockpiling sites shall be operated by operators domiciled in Indonesia.

(2) Bonded stockpiling sites shall be managed by companies domiciled in Indonesia.

Article 4

The operators of bonded stockpiling sites may also act as bonded stockpiling companies.

Article 5

(1) the origin of imported goods are removed from bonded with the aim Hoarding imported for use, all of these expenditures are not addressed to the party who obtained exemptions or deferral of import duty, excise duty, or taxes in order to import:

• a. customs duties levied at rates prevailing at the time imported for use and value of Customs which occurs when the goods are incorporated into Bonded Hoarding;
• b. which is paid Excise Taxable Goods that constitutes excisable goods settled;
• c. subject to VAT, VAT BM, and article 22 of the transfer price.

(2) The goods as meant in paragraph (1) shall be subject to general provisions in the import sector.

Article 6

Goods that are taken out of bonded stockpiling sites for exports shall be subject to general provisions in the export sectors.

CHAPTER II
BONDED ZONES

Part One
Operators

Article 7

(1) The designing of zones or areas as bonded zones (KB) and the licensing of bonded zone operators (PKB) shall be done by virtue of Presidential Decrees.

(2) To apply for licenses as PKB as meant In paragraph (1), applicants shall meet the following requirements:

• a. holding evidence of ownership or control of buildings, places or areas with clear limits (separating fence)
• b. holding industrial licenses, environmental impact assessment licenses, and other required licenses from relevant technical agencies;
• c. holding letters of confirmation as taxable companies (PKP) and attaching the latest annual income returns (SPT PPh) to the applications (for companies obliged to submit annual tax returns/SPT);
• d. having the planned layout for KB.

Article 8

KB that are operated by PKB granted licenses as meant in Article 7 may serve one or several companies engaged in manufacturing activities.

Article 9

(1) The import of capital goods or equipment for the construction/expansion of KB and the import of oil equipment solely in the interests of PKB already obtaining licenses as meant in Article 7 shall be granted suspension of import duty payments and shall not be subject to collection of PPN, PPnBM and PPh Article.

(2) PKB shall examine the completeness of requirements to KB companies as meant in Article 10 that will carry on industrial business in the said KB.

(3) PKB shall inform the Minister of Finance of new companies that already meet the requirements as meant in paragraph (2).

Part Two
Companies

Article 10

(1) PDKB (companies that plan to carry, on business in KB) shall meet the following requirements:

• a. holding Industrial licenses;
• b. holding letters of confirmation as PKP and attaching the latest annual SPT PPh to the applications of companies obliged to submit SPT).

(2) PDKB that already meet the requirements as meant in paragraph (1) shall register with the Minister of Finance no later than 14 (fourteen) days before they carry on their business.

(3) The Minister of Finance shall lay down further procedures for PDKB to take goods and materials into or take manufactured goods out of KB.

Article 11

PKB that plan to act as PDKB shall meet the requirements as meant in Article 10.

Article 12

(1) PDKB shall be responsible for settling import duty, excise and tax on goods they take into or out of the companies.

(2) PDKB shall be exempt from the responsibilities as meant in paragraph (1) If the goods at their companies :

• a. are destroyed unintentionally;
• b. are already exported, re-exported, or imported.
• c. are taken into other KB, moved to temporary stockpiling sites or customs stockpiling sites.

Part Three
Subcontracts

Article 13

(1) PDKB may subcontract a part of their manufacturing activities to industrial companies operating in outside Indonesian customs areas or other PDKB, except activity of testing, sorting or packing.

(2) The subcontract work as meant In paragraph (1) shall cover all types of product and be completed no later than 60 (sixty) days starting the date the goods and/or materials are taken out of KB.

(3) The subcontract work as meant in paragraph (1) shall be realized through contracts containing at least period of time, the amount of goods and/or materials received from PDKB and the amount of output return to PDKB.

(4) The transfer of subcontract work to industrial companies operating In other Indonesian customs areas shall be accompanied with guarantees presented to the Treasurer of the Office of the Directorate General of Customs and Excise supervising KB, and the guarantees shall take the form of:

• a. bank guarantees;
• b. surety bonds or customs bonds from insurance companies approved by the Minister of Finance;

(5) The Minister of Finance shall lay down further procedures for PDKB to subcontract work.

Part Four
Release of Machines from KB

Article 14

(1) PDKB may lend machines and/or factory equipment to other PDKB or subcontractors in other Indonesian customs areas for a maximum period of 12 (twelve) months and for another period of twice a year at the maximum to realize subcontract work.

(2) PDKB may take machines and/or factory equipment out of their factories to other Indonesian customs areas for repair.

(3) With the guarantees as meant in Article 13 paragraph (4) presented to the Treasurer of the Office of the Directorate General of Customs and Excise supervising KB, the release of machines and/or factory equipment to other Indonesian customs areas for the purpose as meant in paragraph (1) or (2) shall be granted suspension of import duty, PPN, PPnBM and PPh Article 22 payments.

(4) The repair as meant in paragraph (2) shall be completed no later than 12 (twelve) months starting the date the machine and/or factory equipment are taken out of KB.

(5) The release of machines and/or factory equipment from KB to foreign countries for repair shall follow existing provisions.

(6) The Minister of Finance shall lay down further procedures for PDKB to take machines and/or factory equipment out of KB.

Part Five
Release of Manufactured Goods from KB

Article 15

(1) Manufactured goods may be taken out of KB to other Indonesian customs areas after there is export realization according to provisions in Article 5.

(2) The export realization as meant in paragraph (1) shall be calculated based on the percentage of export value determined by the Minister of Finance.

CHAPTER III
BONDED WAREHOUSES

Part One
operators

Article 16

(1) The Minister of Finance shall declare buildings, places or areas as bonded warehouses by issuing bonded warehouse licenses to bonded warehouse operators (PGB).

(2) To apply for bonded warehouse licenses as meant in paragraph (1), applicants shall meet the following requirements :

• a. holding evidence of ownership or control of buildings, places or areas with clear limits (separating fences);
• b. holding business licenses and other required licenses from relevant technical agencies;
• c. holding letters of confirmation as PKP and attaching the latest annual SPT PPh to the applications (for companies obliged to submit SPT);
• d. having the planned layout for bonded warehouses.

Article 17

Bonded warehouses in the form of areas that are operated by PGB already receiving licenses as meant in Article 16 may serve one or several companies engaged in warehousing business.

Article 18

(1) The import of capital goods or equipment for the construction of bonded warehouses already receiving licenses as meant in Article 16 shall be granted suspension of Import duty payments and shall not be subject to collection of PPN, PPnSM and PPh Article 22.

(2) PGB whose warehouses can accommodate more than one bonded warehousing companies shall give recommendations to companies In talking care of bonded warehouse licenses from the Minister of Finance.

Part Two
Companies

Article 19

(1) The Minister of Finance shall issue licenses to PPGB (companies at bonded warehouses).

(2) To apply for PPGB licenses as meant in paragraph (1), applicants shall meet the following requirements:

• a. holding business licenses and importer's licenses from relevant technical agencies;
• b. holding letters of confirmation as PKP and attaching the latest annual SPT PPh to the applications (for companies obliged to submit SPT);
• c. have recommendation from PGB;
• d. presenting guarantees.

(3) The Minister of Finance shall lay down further procedures for taking goods of import origin into or out of bonded wares houses and for presenting guarantees.

Article 20

PGB that plan to act as PPGB shall meet the requirements as meant in Article 19.

Article 21

(1) PPGB shall be responsible for settling import duty, excise and tax on goods they take into or out of their companies.

(2) PPGB shall be exempt from the responsibilities as meant in paragraph (1), if the goods at their companies:

• a. are destroyed unitentionaly;
• b. are already exported, re-exported, or imported;
• c. are taken into KB, moved to other bonded warehouses, temporary stockpiling sites, or customs stockpiling sites.

CHAPTER V
ENTERPOTS FOR DISPLAY

Article 22

(1) The Minister of Finance shall declare buildings or areas as entrepots for display (ETP) by issuing ETP license to ETP operators (PETP).

(2) To apply for ETP licenses as meant in paragraph (1), applicants shall meet the following requirements:

• a. holding evidence of ownership or control of buildings or areas with clear limits (separating fences);
• b. holding business licenses and other required licenses relevant agencies;
• c. holding letters of confirmation as PKP,and attaching the latest annual SPPT PPh to the applications (for companies obliged to submit SPT).

Article 23

The import of capital goods or equipment for the construction of EPT already receiving licenses as meant in Article 22 shall be granted suspension of import duty payments and shall not be subject to collection of PPN PPnBM and PPh Article 22.

Article 24

(1) PETP shall assist participants of display in taking care of the temporary entry of imported goods to be put on display.

(2) PETP shall be responsible for settling import duty, excise, and tax on imported goods to be put on display.

(3) PETP shall be exempt from the responsibilities as meant in paragraph (2), if imported goods at ETP :

• a. are destroyed unintentionally;
• b. are already exported;
• c. are already taken into other ETP or moved to customs stockpiling sites.

CHAPTER V
DUTY FREE SHOPS

Article 25

Duty free shops (TBB) may be situated at :

• a. departure terminals at international airports/main ports;
• b. arrival terminal at international airports/main ports;
• c. cities.

Article 26

(1) The Minister of Finance shall grant TBB licences to companies taking the form of limited liability companies (PT) set up to serve as TBB only.

(2) To apply for TBB licences as meant in paragraph (1) companies planning to serve as TBB companies (PTBB) shall meet the following requirements:

• a. holding business licences and other required licences;
• b. holding letters of confirmation as PKP and attaching the latest annual SPT PPh to the applications (for companies obliged to sumbit SPT);
• c. having the map of places/locations designed as TBB.

Article 27

(1) Individuals eligible to buy goods at TBB with customs, excise and tax exemptions shall be :

• a. diplomatic corps;
• b. foreign experts working for international institutes;
• c. Individuals traveling abroad;
• d. Individuals arriving from abroad.

(2) The Minister of Finance shall determine the maximum value of goods the rightful individuals an meant in paragraph (1) can buy either in their own interests or their family's interests.

Article 28

(1) PTBB shall be responsible for settling import duty, excise and tax on goods they take into or out of their companies.

(2) PTBB shall be exempt from the responsibilities as meant in paragraph (1), if goods at their companies:

• a. are destroyed unintentionally;
• b. are already re-exported or sold to the rightful individuals;
• c. are moved to customs stockpiling sites.

CHAPTER VI
OTHER PROVISIONS

Article 29

(1) Bonded stockpiling sites shall be fully under the control of customs authorities.

(2) The control of customs authorities as meant in paragraph (1) shall be done without disturbing the smooth flow of goods.

Article 30

(1) Bonded stockpiling site licences shall be frozen, if bonded stockpiling site operators :

• a. are under the control of curators because of their debts; or
• b. show a sign of inability in organising bonded stockpiling sites.

(2) The freezing of licences as meant in paragraph (1) may be altered to the revocation of licences, If bonded stockpiling site operators;

• a. fail to settle their debts within a specified period of time;
• b. are no longer able to manage the bonded stockpiling sites.

(3) The licences as meant in paragraph (1) may be given back if bonded stockpiling site operators:

• a. already settle their debts; or
• b. are able to manage again the bonded stockpiling sites.

(4) Bonded stockpiling site licences will be revoked if

• a. bonded stockpiling site operators carry out no activity throughout the year;
• b. bonded stockpiling site operators go bankrupt;
• c. bonded stockpiling site operators act unhonestly in carrying on their business; or
• d. there is a request from the parties concerned.

Article 31

If bonded stockpiling site licences are revoked as meant in Article 30 paragraph (4), the companies shall no later than 30 (thirty) days starting the date of revocation,

• a. settle all import duty;
• b. export back goods existing at the bonded stockpiling sites; or
• c. remove goods existing at the bonded stockpiling sites to other bonded stockpiling sites.

Article 32

Bonded stockpiling site operators or companies operating in the bonded stockpiling sites that violate provisions in this Government Regulation shall be subject to sanctions firmly stated in this Government Regulation in addition to administrative sanctions in the form of fines or criminal sanctions in accordance with the law in force.

CHAPTER VII
CLOSING PROVISIONS

Article 33

The Minister of Finance shall stipulate further provisions required for the implementation of this Government Regulation.

Article 34

(1) With the enforcement of this Government Regulation, Government Regulation No. 22/1986 as already amended the latest by Government Regulation No. 14/1990 shall be declared null and void.

(2) With the enforcement of this Government Regulation, all export-oriented production entrepots shall be declared as bonded zones.

(3) All implementation rules on bonded zones, private entrepots and duty free shops shall, as long as they do not contradict this Government Regulation, remain valid until replacement implementation rules are stipulated.

Article 35

This Government Regulation shall take effect as from the date of promulgation.

For public cognizance, this Government Regulation shall be promulgated by placing it in the Statute Book of the Republic of Indonesia.

Promulgated in Jakarta
On June 4, 1996

THE PRESIDENT OF THE REPUBLIC OF INDONESIA,
sgd.
SOEHARTO

Stipulated in Jakarta
On June 4, 1996

THE MINISTER/STATE SECRETARY
sgd.
MOERDIONO

Elucidation
on
Government Regulation No.33/1996
Concerning Bonded stockpiling sites