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Friday, 27 March 15
INDONESIA: NEW REGULATION REQUIRES LETTER OF CREDIT FOR EXPORT OF PRODUCTS FROM NATURAL RESOURCES
The Minister of Trade issued Ministerial Regulation No. 04/M-DAG/PER/1/2015 (“Regulation No. 4/2015”) on 5 January 2015. Regulation No. 4/2015 comes into effect from 1 April 2015.
Regulation No. 4/2015 applies to the export of the following prescribed products;
Coal
Unprocessed or partially refined Minerals including;
Iron concentrate | Copper concentrate | Lead concentrate | Zinc concentrate | Alumina | Nickel | Silver | Gold
Crude oil | Liquefied Natural Gas | Crude Palm Oil.
Once in effect, Regulation No. 4/2015 will require Indonesian exporters of the prescribed products to obtain a Letter of Credit from their product buyer for an amount equal to the value of the prescribed products sold prior to the export of the prescribed products.
The Letter of Credit must be received by an Indonesian foreign exchange bank.
The prescribed products cannot be exported without a Letter of Credit in compliance with Regulation No.4/2015.
The Minister shall appoint surveyors to confirm that a Letter of Credit has been received by the Indonesian exporter for the value of the prescribed products sold for the equivalent of (or greater than) the “world price” for the prescribed product. The surveyor shall issue a report which is to be provided to certain government agencies including Bank Indonesia and the Ministry of Finance (but not the Director General of Tax). The prescribed products cannot be exported without the surveyor’s report.
Exporters who do not comply with Regulation No.4/2015 may be subject to sanctions. The sanctions are not specified in Regulation No.4/2015 but may ultimately to suspension or revocation of their export and production licenses for ongoing violations.
Regulation No.4/2015 is subject to further implementing regulations (which have not yet been issued).
The Minister of Trade issued a similar regulation in 2009 (although the range of prescribed products included more agricultural commodities and less minerals and did not include oil & gas). The Minister of Trade revoked the regulation in 2010 stating that at that time, Indonesia’s foreign exchange reserves had improved and the regulation was no longer required.
The stated purpose of Regulation No.4/2015 is to “optimize and accurately record foreign exchange derived from exports while maintaining the stability and improvement of prices of exports”.
Regulation No.4/2015 does not include any transitional provisions so it appears actual export deliveries of prescribed products after 1 April 2015 will need to comply with the Regulation, even though the sales may be subject to a long terms sales contract entered before the enactment of Regulation No.4/2015.
Similarly, Regulation No.4/2015 requires the Letter of Credit to be issued for at least the “world price” of the prescribed product but the Regulation does not define the term “world price”.
One of the major export products subject to Regulation No.4/2015 is coal and the Government of Indonesia has its own “Indonesian Benchmark Price” for coal on which royalty is to be calculated and paid, however, it appears the pricing for coal for the purposes of Regulation No.4/2015 is “world price” and not the “Indonesian Benchmark Price”.
Regulation No.4/2015 also does not recognize that there may be many valid reasons for an exporter selling a prescribed product as less than “world price”. For example, if a buyer makes advance payments to an exporter or if a buyer commits to a long term supply contract with an exporter. (by: Philip Payne | ABNR)
Source: ABNR
About ABNR
ALI BUDIARDJO, NUGROHO, REKSODIPUTRO (ABNR) was founded in 1967 by professionals with a deep respect for the law and a keen interest in assisting clients, both foreign and domestic, to achieve their commercial goals within the Indonesian legal environment.
Ali Budiarjo, Nugroho, Reksodiputro is the exclusive member firm in Indonesia of Lex mundi - the world's leading network of independent law firms with in-depth experience in 100+ countries worldwide.
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Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
Friday, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
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- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- White Energy Company Limited
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
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