IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 27 Jun 2016 | Removal date: open ended

Public procurement access

 On 27 June 2016, the Indonesian Ministry of Trade published regulation 44/M-DAG/PER/6/2016 on counter-purchase provisions when importing goods for public procurement.
Such counter-purchase agreements require foreign providers of materials for public procurement to use part of their payment to purchase or market abroad other Indonesian export commodities (not oil and gas - art. 6(1) of the regulation).
The present regulation only sets the legal framework for such contracts and is hence classified amber. The assignment of particular mandatory percentages (to be determined by a team from the Ministry of Trade) or required usagage of counter-purchase contracts in public procurement is left for future implementing regulations.
Also, article 8 of the regulation stipulates that the exported goods have to have at least the equivalent worth of those imported for the public procurement.
The regulation came into force on the day of its publication.

Updates

On 31 May 2017, the Indonesian Ministry of Trade issued amendment 28/M-DAG/PER/5/2017 updating regulation 44/2016. Compared to previous provisions, the compensating exports have to be conducted by a third-party country (art. 9(1) of regulation 28/2017). Previously, no such obligation was in force. Furthermore, article 12A in regulation 28/2017 allows for an extension application of the time window for the compensating exports of Indonesian goods. Previously, these exports needed to be conducted within 6 months of the signing of the counter-purchase contract.

On 31 May 2019, the Indonesian Ministry of Trade issued regulation 40/2019 replacing regulation 44/M-DAG/PER/6/2016. However, as no major changes were recorded in the regulation update in terms of the severity of the market access restriction, this intervention continues to be classified as in force. The only notable amendment was that previously the text stated that counter-purchase of oil and gas was not allowed; regulation 40/2019 continues to state that but now explicitly mentioned that this does not hold for its derivative products (art. 4(2)a of regulation 40/2019).

AFFECTED COUNTRIES

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