ANNOUNCEMENT 11 Feb 2013

In February 2013, the government of Indonesia announced a change in the required local inputs to serve domestic customers.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



Official regulation 07/M-DAG/2/2013 of the Ministry of Trade (in Bahasa Indonesia):
http://jdih.kemendag.go.id/files/regulasi/2013/02/11/7m-dagper22013-id-1361179852.pdf

Secondary Source:
http://www.nixonpeabody.com/Indonesia_Ministry_of_Trade_limits_growth_of_franchises


Inception date: 11 Feb 2013 | Removal date: open ended

Local sourcing

On 11 February 2013, the Indonesian Ministry of Trade issued regulation 07/M-DAG/2/2013 concerning the franchise business in the food & beverage industry. Among other restrictions such as a maximum of 250 franchise stores, the regulation included a minimum 80%-local content requirement on raw materials and business equipment used by the franchisor as well as the franchisee (art. 7(1) of regulation 07/M-DAG/2/2013). According to art. 7(2), the Ministry of Trade may give exemptions to this LCR 'after considering the recommendation from the Assessment Team'.
The regulation does not specify a period in which the companies have to comply with the LCR. However, based on article 11 of the regulation, the companies have at least two and half months to adjust before being faced with administrative sanctions.
The regulation came into force on the day of its issuance.

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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