28 September, 2015
On 31 August 2015, the Indonesian Minister of Trade issued Regulation No. 67/M-DAG/PER/8/2015 (MTR 67), amending the list of commodities which are subject to the letter of credit requirements of Minister of Trade Regulation No 04/2015 (MTR 4).
MTR 4, which came into effect on 1 April 2015, requires that exports of certain commodities from Indonesia be paid for by way of a letter of credit and that the proceeds of the letter of credit be paid into an account with a foreign exchange bank located in Indonesia (L/C Obligation). The L/C Obligation under MTR 4 initially applied to a wide range of commodities, including LNG, crude oil, condensate and CNG, as well as certain minerals such as iron ore, gold, nickel and coppers, and coal in various processed and unprocessed forms.
Please click on the following link to access our previous briefing on MTR 4 published in April 2015.
MTR 67, which came into effect on 31 August 2015, amends and replaces the list of commodities that are subject to the L/C Obligation. Importantly the revised list no longer includes LNG, crude oil, condensate or CNG, as well as certain tin products (Previously Regulated Commodities). Accordingly, from 31 August 2015, the exports of these commodities no longer require payments to be made by L/C.
MTR 67 does not apply retrospectively and therefore any exports of the Previously Regulated Commodities between 1 April 2015 and 31 August 2015 must have been paid for by way of an L/C unless the relevant exporter obtained a dispensation from the Minister of Trade in accordance with Minster of Trade Regulation No. 26/2015.
For further information, please contact:
Daniel Reinbott, Partner, Ashurst
daniel.reinbott@ashurst.com
