Attention, Cargo Owners! Warning of Indonesia's Customs Clearance "Red Light Period"!

The Republic of Indonesia, as a key country along the routes of the Belt and Road Initiative and also the largest economy in Southeast Asia, its significance is self-evident. According to the latest data, the total population of Indonesia in 2023 is estimated to have reached approximately 278 million, enabling it to firmly rank as the world's fourth most populous country. Such a huge population base not only brings significant demographic dividends to the country but also nurtures a consumer market with enormous potential.

However, it is worth noticing that despite having many economic advantages, Indonesia is widely regarded as one of the countries with the highest difficulty in customs clearance globally. The complex customs procedures and regulations pose challenges to international trade, which also affects the efficiency and cost of business activities to a certain extent. Therefore, while seizing the opportunities brought by Indonesia's vast market, cargo owners also need to pay special attention to and be prepared to deal with the relevant logistics and trade barriers.

The picture is from the Internet.

What is Indonesia's Customs Clearance "Red Light Period"?

In Indonesia, the customs are divided into the "red-light customs" and the "green-light customs". If a certain type of exported goods falls under the "red light" category at the Indonesian customs, the customs will pay more attention to protecting local enterprises that produce such goods. Then, when export enterprises ship goods to Indonesia, they will encounter relatively strict customs measures.

The picture is from the Internet.

Generally speaking, from December of each year to March of the following year is the "red light period" for import customs clearance in Indonesia. The Indonesian customs will work jointly with other law enforcement departments to conduct strict inspections on import customs clearance. The customs clearance procedures require more formalities and take longer than before. If the operation is improper, more fees will correspondingly be incurred. For some entities with "red license plate" designations, inspections will be carried out 100% of the time.

At the same time, this is also a means to increase tax revenue. As the saying goes, "A new broom sweeps clean." When there are changes in the senior management of the Indonesian customs, they will also use the "red light period" of the customs to assert their power and obtain benefits. Sometimes, when there is a large gap in the import and export trade, the government will adjust the corresponding non-tariff thresholds to balance the gap between the two. In recent years, due to the rampant drug problems and the activities of terrorists, various countries have strengthened the inspection of entry and exit, especially the inspection of imported goods.

Measures to Deal with the "Red Light Period"

When we export goods to Indonesia, apart from collecting the final payment before shipment, the following points also need our attention:

01 For different types and quantities of goods, we need to clarify the goods information before shipment. It is necessary to communicate with local Indonesian merchants about the latest local customs policies and whether this type of product will encounter customs clearance obstacles. If necessary, we should also cooperate with a powerful destination port agent.

02 If the Indonesian merchants do not have the corresponding import rights, or have import rights but with shallow qualifications, they are generally more likely to be inspected (even if they obtain the Import Permit API or even apply for the Master List, it does not mean that there will be no obstacles in customs clearance). Therefore, the DDP (Delivered Duty Paid) operation can be adopted, that is, some import entities with better qualifications can be used as agents to complete the customs clearance.

03 Whether it is DDP or DDU (Delivered Duty Unpaid) operation, it is recommended to apply to the shipping company for 14 days free time of detention when booking the shipping space. In this way, even if the customs clearance takes longer than usual, there will be no or less container demurrage fees.

Goods arriving in Indonesia must be cleared of duties within 30 days. In the port of Jakarta, if the goods exceed the time limit, they will be sent to a simple warehouse of the relevant supervision agency, which is affiliated to the national port company. The goods can be stored there for 1 to 3 months. If they are not picked up after the expiration, they will be auctioned in the warehouse of the port authority, and the proceeds from the auction will be used to pay the storage fees. The balance after deducting the auction fees will be retained for 3 years. If no one claims it after 3 years, it will be turned over to the Indonesian state treasury. The goods are not allowed to be returned before paying the duties.

04 Since January 2016, Indonesia has been quite strict with many products. For example, products such as LED lights, used machinery, used machines, and textiles need to undergo SGS pre-loading inspection. It needs to be applied for abroad, and the SGS NO. should be issued. The carrier should make an appointment for the pre-loading inspection. In this way, the probability of being blocked during customs clearance at the destination port is almost zero.

05 Confirm the corresponding import rights and qualifications with the Indonesian buyers in China, and then clarify the container loading requirements. By doing the work well before shipment to the greatest extent, we can complete the import and export related work efficiently to the greatest extent.

06 The exported goods must be consistent with the actual packing list. If it is found during the container inspection at the destination port that the goods are inconsistent with the actual packing list, invoice, and the copy of the bill of lading, the fines incurred will be quite expensive. Some customers are used to using abbreviations or not listing the details. It may not matter when exporting to other countries, but for products exported to Indonesia, the more detailed the information is, the better.

07 Before shipment, it is necessary to review the customs clearance documents through a professional export agency company, conduct a detailed inspection during the shipment period. Try to be meticulous before shipment, count the quantity of goods clearly, and strictly review all possible loopholes and problems before arranging shipment at the port of shipment to avoid continuous troubles at the destination port to the greatest extent.

08 In addition, there is a very important point: the verification risk of Indonesia's FORM E.

-END-

Follow me to learn more information

Sources: Focus Vision, Wiffa and other online materials.

Statement: This article is only for the sharing and reference of industry information. If there are any issues, please contact us for deletion.