About Ministry of Trade Regulation No. 20 of 2021
Since November 15, 2021, the Minister of Trade, Muhammad Lutfi, has issued Ministry of Trade Regulation (Permendag) No. 19 of 2021 on Export Policy and Regulation and Permendag No. 20 of 2021 on Import Policy and Regulation.
These two regulations are derivative legal products of Law No. 11 of 2020 on Job Creation.
With the enforcement of these new Permendags, all previous regulations related to export and import have been revoked and are no longer valid.
However, business licenses issued under previous regulations will remain valid until their respective expiration dates.
The aim of implementing these two new regulations is to create integrated data across ministries and agencies and to become a data superset to eliminate repetition and duplication.
Export and import licensing will also become easier through the integration of the INATRADE and SINSW systems.
With this system, businesses no longer need to open separate portals for various ministries or institutions to fulfill licensing requirements, particularly in the export-import sector.
In addition to speed and convenience, export-import business licenses issued through SSm (Single Submission) also use electronic signatures and barcodes to ensure data authenticity and security in business licensing documents.
Prohibitions and Restrictions in Permendag No. 20 of 2021
Provisions regarding prohibitions and restrictions are regulated in accordance with laws governing prohibited imports, as follows:
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Importation of goods from outside the customs area into Free Trade Zones and Free Ports (KPBPB).
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Importation of goods into bonded zones (Tempat Penimbunan Berikat).
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Import of goods and/or materials for processing, assembly, or installation intended for export as part of import for export purposes.
Impacts of Permendag No. 20 of 2021
With the changes introduced in Regulation No. 20 of 2021, many aspects must be adapted—especially in industries that regularly import goods. Some of the main impacts include:
1. System Integration Challenges
During early implementation of the SSm licensing system, integration issues occurred—some data elements sent via the SINSW system did not match those in the INATRADE system.
As a result, business licensing applications were not transmitted correctly and could not be further processed.
2. Unfamiliarity with the New System
When the SSm licensing system was enforced, many businesses were still unfamiliar with the new process.
3. Confusing Regulations That Hinder Import Processes
Business actors have complained that the new import licensing system under Permendag No. 20/2021 is confusing and hinders their import activities.
There is a lack of alignment between this regulation and others involved in import permit applications, causing problems for some importers.
4. Increased National Transportation Costs
One policy—such as the prohibition of reflagging ships away from the Indonesian flag—was introduced due to concerns over the decreasing availability of Indonesian-flagged vessels.
This situation could lead to higher national freight costs if anticipatory measures are not taken.
TCI’s Bonded Logistics Center (PLB) as a Solution to Permendag No. 20 of 2021
In 2015, the Indonesian government established Bonded Logistics Centers (PLB) to address the country’s high logistics costs.
PLBs are multifunctional warehouses where import duties and taxes are postponed, and raw materials can be stored for up to three years until purchased.
Equipped with Quality Control services, PLBs enable small industries and SMEs to optimize their import-export operations and produce more competitive products.
PLBs are expected to reduce logistics and transportation costs, support domestic industry growth (including SMEs), boost both local and foreign investment, and position Indonesia as a logistics hub in the Asia-Pacific region.
Benefits of using TCI’s PLB include:
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Deferred payment of import taxes and duties until cargo is released.
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Reduced storage and port handling costs.
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Improved cash flow and raw material turnover for factories.
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Shorter delivery times.
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Storage period of up to 3 years, extendable.
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Support for maintenance, cutting, canting, decanting, surveyor inspections, and restricted goods (LARTAS).
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Flexibility to manage quantity and scheduling of re-export shipments.
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Ability to store goods in PLB while waiting for master-list approval or other document processes.
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Partial delivery based on production needs and schedule.
There are many benefits to using our Bonded Logistics Center services. Contact us today to learn more about Transcon Indonesia’s PLB services.