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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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Saturday, 28 March 15
THE DRY BULK FLEET AT BREAKING POINT - CLARKSONS
The severe oversupply in the bulkcarrier fleet has contributed to the current trough in the dry bulk market, putting considerable financial pressur ...
Friday, 27 March 15
WEEKLY U.S COAL OUTPUT FALLS 1.7% W-W; 7.9% Y-Y
COALspot.com – United States the world's one of the largest coal producers, produced approximately totaled an estimated 18.2 million ...
Thursday, 26 March 15
CHINA IRON ORE IMPORT FOR THE FIRST 2 MONTHS DECLINED BY 1.2 % Y-O-Y; PANAMAX AUSSIE/CHINA ROUNDS BEING FIXED IN THE $4 -5K RANGE - FEARNLEYS
Handy
There has been more activity in both hemispheres this week. Especially the USG market has picked up with more cargoes for prompter dates en ...
Thursday, 26 March 15
RATES FOR THE SMALLER SIZE SEGMENT CONTINUED TO IMPROVE LAST WEEK - INTERMODAL
To see green across the board is a rare occurrence in the Dry Bulk market nowadays and while the upside in which last week closed off is not of the ...
Thursday, 26 March 15
KYUSHU ELECTRIC POWER OF JAPAN HAS JOINED GLOBALCOAL ONLINE COAL TRADING PLATFORM
globalCOAL® announced today that Kyushu Electric Power, one of Japan’s largest utility companies, has joined its online coal trading plat ...
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- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Economic Council, Georgia
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- White Energy Company Limited
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
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