IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Outflow (subsidised)

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 14 Jul 2015 | Removal date: open ended
Still in force

Trade finance

 On 14 July 2015, the Indonesian Finance Ministry announced regulation 134/PMK.08/2015 allowing the Indonesian Export-Financing Agency LPEI to support export-oriented Indonesian companies through Special Assignments from the Finance Ministry.
The Assignments need to be specified by economic sector, commodities, destination countries, export-performance criteria and export-financing vehicles (art. 2(2) of the regulation). Furthermore, in order to be eligible for the support from LPEI, the exports need at least to:

  • "a. improve Indonesia's competitiveness and create sufficient amounts of value added
  • b. support the growth of the domestic industry
  • c. have potential of export improvement and development in the long run" (art. 3(2), own translation).

The export-financing will also only be provided if the company fails to obtain sufficient funds in the existing LPEI framework or is unable to find reinsurance instruments in the private market (art. 4(2)b-c).
The Director General for Budget Financing and Risk Management was quoted in a press release saying the regulation was introduced "so that LPEI can provide financing, underwriting, and insurance for transactions that cannot be conducted in commercial way". He also went on to say that the commodity types which could benefit from these Special Assignments will be specified at a later stage. He did mention, however, that weapon products would be "one of the candidates".
The regulation came into force on the day of its announcement.
On 25 August 2015, the Indonesian Finance Minister explained in a press release that one of the sectors that will particularly benefit from this regulation shall be SMEs. He was quoted saying "I ask LPEI to provide assistance to the SMEs entrepreneurs. For SME entrepreneurs, I hope they can offset it by the good performance".
As this regulation simply sets out a framework and does not specify any products, it shall be classified as amber.

AFFECTED COUNTRIES

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