to Indonesian
a. That in accordance with the trading function to support production based on the principal of inter-sector relation, companies in production sector may undertake the limited trading activities for its own production process;
b. That in relation with the above statement, in accordance with the policy concerning foreign business revocation in the trading sector to increase the national participation, the provisions of issuing conditions and procedures for securing the limited trading license for production companies in the framework of investment shall be improved.
1. Trade Law 1934 as has been amended and added;
2. Law No. 1/1967 jo. Law No. 11/1970;
3. Law No. 6/1968 jo. Law No. 12/1970;
4. Government Regulation No. 36/1977;
5. Decision of the President of Republic of Indonesia No. 23/1974;
6. Decision of the President of Republic of Indonesia No. 45/1975;
7. Decision of the President of Republic of Indonesia No. 53/1977;
8. Decision of the President of Republic of Indonesia No. 54/1977;
9. Decree of the Minister of Trade No. 17/Kp/7/68;
10. Decree of the Minister of Trade No. 314/Kp/XII/70;
11. Decree of the Minister of Trade No. 72A/Kp/III/75;
12. Decree of the Minister of Trade No. 110/Kp/IV/75;
13. Decree of the Minister of Trade No. 69/Kp/IV/76;
14. Decree of the Minister of Trade No. 301A/Kp/X/77;
15. Decree of the Minister of Trade No. 382/Kp/XII/77.
REGULATION OF THE MINISTER OF TRADE CONCERNING PROVISION ON LIMITED TRADING ACTIVITIES FOR PRODUCTION COMPANIES IN THE FRAMEWORK OF INVESTMENT
Foreign companies in the production sector that are established both in or outside the framework of Law No. 1/1967 concerning Foreign Investment and domestic foreign companies that are established both in or outside the framework of Law No. 6/1968 concerning Domestic Investment can:
(a) import machines, spare parts, building materials/equipment and raw materials/auxiliary materials to be used in its production process;
(b) buy machines, spare parts, building materials/equipment and raw materials/auxiliary materials from domestic market to be used in its production process;
(c) do promotion, market research and control marketing of its production.
National companies in the production sector that are both in or outside the framework of Law No. 6/1968 concerning Domestic Investment can:
(a) import machines, spare parts, building materials/equipment and raw materials/auxiliary materials to be used in its production process;
(b) buy machines, spare parts, building materials/equipment and raw materials/auxiliary materials from domestic market to be used in its production process;
(c) export its production;
(d) sell its domestic production to seller or consumer;
(e) do promotion, market research and control marketing of its production.
(a) Companies as intended in Article 1 and 2, to be able to conduct import of machines, spare parts, building materials/equipment and raw materials/auxiliary materials to be used in its production process must have Limited Importer's Identity Number
(b) Companies as intended in Article 1, to be able to:
(c) Companies as intended in Article 2, to be able to:
(d) companies as intended in Article 1 and 2, to be able to conduct export of its production must have Limited Export Identity Number.
In order to obtain the limited trading licenses as intended in Article 3, the referred companies shall already have:
(a) President Approval or Permanent Business License from the Technical Department for companies that are established in the framework of Law No. 1/1967 concerning Foreign Investment;
(b) Temporary/Permanent Approval Letter from BKPM or Permanent Business License from the Technical Department for companies that are established in the framework of Law No. 6/1968 concerning Domestic Investment;
(c) Permanent Business License from the Technical Department for companies that are established outside the framework of Law No. 1/1967 and Law No. 6/1968.
Investment Companies in the production sector that are established in the framework of Law No. 1/1967 concerning Foreign Investment and Law No. 6/1968 concerning Domestic Investment:
(a) shall not obtain the Trading Business License (SIUP), Acknowledgment as Inter Island Trading, Importer's Acknowledgement Identity (TAPPI) and Export Identity Number (APE);
(b) shall be free from the payment of Company Guarantor Money and Company Administration Money.
For the smoothness of production in relation to Banking technical aspects, boarding etc.:
(a) The Limited Importer's Identity Number can be given to the Head Office or Branch Office in accordance with its necessity;
(b) The Limited Exporter's Identity Number can be given to the Head Office or Branch Office in accordance with its necessity;
(c) In the case of Limited Domestic Buying License and Limited Domestic Buying/Selling License proposed by the Branch Office, the establishement of the intended Branch Office must be accompanied by Notary Deed.
(a) In the case of Limited Importer's Identity Number and Limited Exporter's Identity Number proposed by the Branch office, the founder on the intended branch office must be accompanied by Deed that is made in front of Notary;
(b) In the case of person of foreign citizenship signing the import and export documents, the intended person shall already have the work permit from the Department of Labour, Transmigration and Cooperation;
(c) In the case of non company executive appointed to sign the import and export documents, the intended appointment should be registered or legalized by Notary.
(a) Limited Importer's Identity Number, Limited Domestic Buying License, Limited Domestic Buying/Selling License and Limited Exporter's Identity Number for Investment companies that are established in the framework of Law No. 1/1967 concerning Foreign Investment and Law No. 6/1968 concerning Domestic Investment, that obtain the government approval (President Approval for PMA, and Permanent Approval Letter from BPKM for PMDN) after the enforcement of the Decree of President No. 53/1977 and No. 54/1977 dated 3 October 1977, shall be given in the name of the Minister of Trade by the Head of BKPM according to the provision in the Decree of the Minister of Trade No. 31A/Kp/X/77 dated 26 October 1977.
(b) Limited Importer's Identity Number, Limited Domestic Buying License, Limited Domestic Buying/Selling License for Investment companies that are given in the framework of Law No. 1/1967 concerning Foreign Investment and Law No. 6/1968 concerning Domestic Investment, that obtain the Government approval (President Approval, or Permanent Business License from the Technical department for Foreign Investment, and Temporary Approval Letter from BPKM or Permanent Business License from the Technical department for Domestic Investment) before the enforcement of the Decree of President No. 53/1977 and No. 54/1977 dated 3 October 1977, shall be given or extended by the Ministry of Trade.
(c) Extension of limited trading issued by BKPM as intended in (a) which is already expired, shall be given by the Ministry of Trade.
Procedures for securing or extending the Limited Importer's Identity Number, Limited Domestic Buying License, Limited Domestic Buying/Selling License and Limited Exporter Identity Number as intended in Article 8 (b) and (c) are as follows:
(a) The intended company shall submit a proposal to the Head of the local Regional Office of the Ministry of Trade by filling the Application Form (DIP) as in Appendix I.
(b) The intended Regional Office of the Ministry of Trade shall check the completeness of application, forward it to the Head of Ministry of Trade cq. Directorate of Trading Infrastructures Development.
(c) Directorate of Trading Infrastructures Development, after judging and assuring that the application is in line with the effective criteria of capital investment, shall:
(d) 1. Limited Importer's Identity Number shall be issued in the name of Minister of Trade by the Import Director, as in Appendix II.
The effectiveness of the limited trading license as intended in Article 8 (b) is as follows:
(a) Limited Importer's Identity Number shall be effective in Daswati I through which the application is proposed and for 2 (two) years since the date of issue with the provision of extendable;
(b) Limited Domestic Buying License and Limited Domestic Buying/Selling License shall be effective allover Indonesia for 2 (two) years with the provision of extendable;
(c) Limited Exporter's Identity Number shall be effective in Daswati I when issued and for 2 (two) years with the provision of extendable;
(a) Owner of the Limited Importer's Identity Number is obliged to submit:
(b) Owner of the Limited Exporter's Identity Number is obliged to submit:
(c) Owner of Limited Domestic Buying License is obliged to submit:
(d) Owner of Limited Domestic Buying/Selling License is obliged to submit:
Foreign companies in the production sector that are established both in or outside the framework of Law No. 1/1967 concerning Foreign Investment and domestic foreign companies in the production sector that are established both in or outside the framework of Law No. 6/1968 concerning Domestic Investment:
(a) shall not sell its production in domestic market directly to the seller or consumer;
(b) are obliged to appoint a national trading company that already have the Trading Business License (SIUP) as an agent/distributor;
(c) in appointing the intended agent/distributor shall be accompanied by agreement letter (distributorship agreement) that completely and explicitly contains the rights and obligations of the both parties with appointment period of at least 3 (three) years;
(d) in appointing the agent/distributor, shall submit:
to the Ministry of Trade cq. Directorate of Trading Infrastructures Development, with a copy made available to the local Regional Office of the Ministry of Trade.
(a) Promotion activities, market research and control marketing of production in domestic market for foreign company in the production sector that are established in or outside the framework of Law No. 1/1967 concerning Foreign Investment shall be done by the head office of the intended company and/or by the agent/distributor.
(b) For the activities in (a), the intended company shall not establish local branch offices, unless with the approval of the Ministry of Trade cq. Directorate of Trading Infrastructures Development.
(a) Foreign companies in the production sector that are established in the framework of Law No. 1/1967 concerning Foreign Investment and domestic foreign companies in the production sector that are established in the framework of Law No. 6/1968 concerning Domestic Investment, can selectively considered to conduct:
(b) the approval of the intended direct selling shall be given by the Ministry of Trade cq. Directorate of Trading Infrastructures Development.
National trading company as agent/distributors in necessary can hire experts from the appointing company and/or expatriates as manager, technical advisor or consultant according to the provisions in the Decree of the Minister of Labor Force, Transmigration and Cooperation No. 2047/Men/1975 and the Decree of the Director General of Domestic Trading, Director General of Labor Force Development and Enforcement and Director General of Immigration No. 05/DJDAGRI/Kep/10/1975, No. 70/SK/DJ.I/1975 and No. 93/VIS/SS/1975.
Limited Importer's Identity Number, Limited Exporter's Identity Number, Limited Domestic Buying License, Limited Domestic Buying/Selling License and approval of direct selling may be revoked or temporarily revoked if the intended company:
(1) do not fulfill the obligation and/or disloyal to the provisions that have been provoked in this regulation;
(2) business license is revoked by the related Technical Department;
(3) conduct or suspected in conducting economic crimes or being judicially charged by economic crimes.
Disloyalty to the provisions in this regulation may result in punishments of revocation of Limited Importer's Identity Number, Limited Exporter's Identity Number, Limited Domestic Buying License, Limited Domestic Buying/Selling License and approval of direct selling, and the judicial charge as mentioned in Trade Law 1934 as well as other punishments in the rights of the Minister of Trade.
With the enforcement of this regulation:
(1) Decree of the Minister of Trade No. 17/Kp/7/68;
(2) Decrees of Director General of Trade:
(3) The THIRD, FOURTH, and FIFTH dictum of Decree of Minister of Trade No. 72A/Kp/III/75;
(4) Regulation of Director General of Foreign Trading No. 89/K/DIR/DAGLU/IV/76;
(5) Regulation of Director General of Trading Infrastructures Development No. 2389/PSP.4/KWT/XI/77;
shall be revoked and declared null and void.
The others that have not been regulated in and implemented in this Decree shall be stipulated by the Director General of Domestic Trading.
This Decree shall come into force since the date of enforcement.
Stipulated in Jakarta,
on 9 March 1978
THE MINISTER OF TRADE,
signed,
RADIUS PRAWIRO