Technical Guidelines for the Implementation of the Minister of Trade Regulation No. 10/M-DAG/PER/3/2009 on Export Goods Required to Utilize Letters of Credit

This Director General of Foreign Trade Regulation, No. 02/DAGLU/PER/3/2009, has been expected (see ILB No. 1048 10/3/2009). The purpose of the regulation is to set out specific requirements that are to be met by exporters with respect to letters of credit (LoC).

Article 1 stipulates that all export proceeds from payments by LoC or any other form of payment for Crude Palm Oil (CPO), mining products, and commodities such as coffee must be channeled through a Domestic Foreign Exchange Bank.

However, where exporters are bound by an existing agreement that mandates payments that are to be in forms other than LoC, then the exporter can apply for a suspension of the above obligation. The application needs to include a photocopy of the agreement and a realization report. The realization report is to be in the form as included as Attachment I to this regulation. An application for suspension of the obligation must be received at least ten days prior to 31 August 2009.

Once a completed application is received then a decision will be made as to acceptance or rejection of the application within five working days.

Despite the suspension exception, export proceeds are to be channeled through Domestic Foreign Exchange Banks starting 1 April 2009 and by 1 September 2009 where exporters are subject to specific contractual provisions in existing agreements.

Realization reports are to be sent electronically no later than the 10^th day of the month following the reporting period to the email addresses noted in the regulation.

The Regulation was issued on 13 March 2009 and has been in force since that date.