President Jokowi Signs Regulation on Border Trade

In a bid to implement provisions of Article 56 paragraph (4) of Law Number 7 of 2014 on Trade, President Joko “Jokowi” Widodo on 6 May 2019 signed Government Regulation Number 34 of 2019 on Border Trade.

Under this Government Regulation, every Indonesian citizen who resides in the territory of the Republic of Indonesia directly adjacent to other countries may conduct border trade with residents of other countries residing in the border region.

“Border trade as intended may only be conducted in the land and maritime border areas,” reads Article 2 paragraph (2) of this Government Regulation.

The Government Regulation further states that Indonesian citizens who purchase goods outside the customs area within the framework of border trade must have documents in the forms of: Border Cross immigration documents issued by the Immigration Office in charge of the border area; and Border Cross customs documents issued by customs offices in charge of Cross Border Posts.

In the meantime, residents of neighboring countries residing in the border area who purchase goods in the customs area within the framework of border trade, under this Government Regulation, must hold Border Crossers ID required by the Government of the relevant country.

“Border Trade may only be conducted in certain places and/or certain regions designated as the Border Trade area and territory,” reads Article 5 paragraph (1).

Determination of certain places and/or certain regions as intended shall be made based on a bilateral agreement in accordance with the provisions of the laws and regulations.

The Government Regulation also states that types of goods that may be purchased in transactions in the context of border trade are only goods needed to fulfill daily needs, which are stipulated based on the bilateral agreement in accordance with the provisions of the laws and regulations.

Meanwhile, maximum value of goods purchase transactions in the context of border trade, conducted outside the customs area to be brought into the customs area; and in the customs area to be brought outside the customs area, shall be determined based on the bilateral agreement in accordance with the provisions of the laws and regulations.

Under the Government Regulation, goods purchase transactions within the maximum value limit as intended shall be subject to: a. exemption from import duty and tax in the framework of import; b. exceptions to the imposition of export duties; c. exceptions to the provisions on restrictions on exports and imports; and/or d. exceptions to the provisions of the import trade system outside the customs area in accordance with the provisions of the laws and regulations.

“In the event that the value of the purchase transaction exceeds the maximum value of the transaction as intended, the entire item shall be taken in the form of re-export in accordance with the provisions of the laws and regulations,” reads Article 7 paragraph (4).

Importation of goods obtained from the purchase transaction of goods outside the customs area in the context of border trade into the customs area must be conducted through a border crossing post. Likewise, the exportation of goods obtained from the purchase transaction of goods in the customs area in the context of border trade outside the customs area must be conducted through a border crossing post.

“Every Indonesian citizen who purchases goods in the context of border trade outside the customs area who re-enters the customs area must show the border cross immigration documents and border cross customs documents at the Cross Border Post,” reads Article 9.

Every Indonesian citizen who purchases goods outside the customs area within the framework of border trade is obliged to declare the goods brought into the customs area to customs and excise officials at the Cross Border Post.

The importation of goods into the customs area as intended shall be under the supervision and examination of customs and excise officials at Cross Border Posts. Moreover, Cross Border Posts must provide services and supervision of customs and excise facilities, immigration, quarantine, and security checks.

“Importation and/or exportation of goods into the customs area and/or outside the customs area through Cross Border Posts in the context of border trade shall be excluded from the fulfillment of export or import documents regulated in the provisions of laws and regulation in the field of trade,” reads Article 12.

As for the importation and/or exportation of goods into the customs area and/or outside the customs area through Cross Border Post outside Border Trade, the provisions of laws and regulations in the field of export and import shall apply.

“This Government Regulation shall come into force on the date of its promulgation,” reads Article 17 of Government Regulation Number 34 of 2019 which is promulgated by Minister of Law and Human Rights Yasonna H. Laoly on 6 May 2019. (Pusdatin/ES)

Translated by: Muhardi

Edited by: M. Ersan Pamungkas