Export Products and Compulsory Letters of Credit

In order to ensure the effective implementation of export policy the Government has decided there is a need to revisit the use of compulsory letters of credit for certain export products. To this end, the Minister of Trade has issued Regulation No. 10/M-DAG/PER/3/2009. The Regulation affects exports of Crude Palm Oil, Ores, and Coal in Attachment I, and Coffee, Cocoa, and Rubber in Attachment II.

The export goods listed in Attachment I must use a Letter of Credit (L/C) and those export goods listed in Attachment II must use a L/C where the value of those goods noted in the Export Goods Notification (PEB) exceeds USD 1 million. Where the PEB is a value less than USD 1 million then the exporter may choose to use a L/C or some other method of payment.

The PEB must include the number and date of the L/C.

Export goods that are not required to use a L/C are exempt from the provisions of this Regulation.

The provisions relating to the use of a L/C through a Domestic Exchange Bank come into force for Attachment I from 1 April 2009 and for Attachment II from 1 September 2009.

This Regulation repeals and replaces Minister of Trade Regulation No. 01/M-DAG/PER/1/2009.

The Regulation was issued on 5 March 2009.