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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, 10 April 15
US COAL PRODUCTION FELL 4.7% W-O-W : EIA
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 17.4 million short ...
Friday, 10 April 15
DRY BULK MARKET'S DOWNFALL ALSO OFFER INVESTMENT BARGAINS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Dry bulk market rates have fallen to historical lows over the past few weeks, with no clear path of recovery, at least in the near term. As such, m ...
Thursday, 09 April 15
CAPESIZE: RATES ARE STILL DISAPPOINTING - FEARNLEYS
Handy
The handy market had a stronger sentiment before the Easter holidays, but have as the bigger panamaxes seen a softening tendency this week. ...
Wednesday, 08 April 15
DRY BULK MARKET SEEMS UNABLE TO CATCH A BREAK - INTERMODAL
COALspot.com: The Dry Bulk market seems unable to catch a break these days.
According to Intermodal, following the market stabilization that p ...
Wednesday, 08 April 15
CHINA BURNS HALF OF THE WORLD'S COAL - CHRISTOPHER T. WHITTY
Intermodal Weekly Market Update
China is the world's largest consumer of coal, using more coal each year than the United States, the Europ ...
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- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- PTC India Limited - India
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Minerals Council of Australia
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
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