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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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- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Parliament of New Zealand
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Planning Commission, India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
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