Ada Pertanyaan? Hubungi Kami 
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Ada Pertanyaan? Hubungi Kami Anne Aprina Priskila, Kartini L Makmur
As part of efforts to increase foreign exchange income, the government continues to search for all possible ways to achieve its goal to do so. One feasible particularly feasible method is to regulate payment processes for exports. In this regard, the government has mandated the use of letters of credit (“L/C”) for exporting energy and mining products.This policy has been embodied in Minister of Trade Regulation No. 4 of 2015 on The Use of L/C for Certain Exports (“Regulation”). The Regulation came into force on the first of April, and the government is confident that it will enhance national foreign exchange income.
"This regulation supports proper foreign exchange administration and compliance,” stated Mr. Sujatmiko, Program Director of Minerals and Coalat the Ministry of Energy and Mineral Resources, in Jakarta on Monday.
Although payment using L/C is not new to export activities, there have been some concerns raised by prominent companies and business association. Pertamina and several associations of mining and oil companies are reluctant to implement this obligation due to the fact that L/C payment is not incorporated into all existing agreements meaning adjustments will need to be made with their buyers.
Responding to this objection, Mr. Sujatmiko assured that the government will keep this regulation on track and is ready to assist exporters in adjusting to the new L/C provisions, saying, "if any problems occur, the Ministry of Trade will be involved hand-in-hand to help. In the case of any temporary exception, the L/C obligation will follow after existing sales contract expire."
As an L/C is now mandatory for almost every transaction for energy and mining products—including their derivatives—the current predominate payment mechanism of telegraphic transfer can no longer be used forsuch commodities. To support its policy, the government will impose sanctions for non-compliance, although specific sanctions arenot set out in the Regulation.
Marwan Batubara, Executive Director of Indonesian Resources Studies (IRESS), expressed his support for Regulation, noting that the Government intends to comprehensively announce it to all stakeholders.
"The key is not to be too hasty," Mr. Batubara suggested.
(hot/kc)
Anne Aprina Priskila, Kartini L Makmur
As part of efforts to increase foreign exchange income, the government continues to search for all possible ways to achieve its goal to do so. One feasible particularly feasible method is to regulate payment processes for exports. In this regard, the government has mandated the use of letters of credit (“L/C”) for exporting energy and mining products.This policy has been embodied in Minister of Trade Regulation No. 4 of 2015 on The Use of L/C for Certain Exports (“Regulation”). The Regulation came into force on the first of April, and the government is confident that it will enhance national foreign exchange income.
"This regulation supports proper foreign exchange administration and compliance,” stated Mr. Sujatmiko, Program Director of Minerals and Coalat the Ministry of Energy and Mineral Resources, in Jakarta on Monday.
Although payment using L/C is not new to export activities, there have been some concerns raised by prominent companies and business association. Pertamina and several associations of mining and oil companies are reluctant to implement this obligation due to the fact that L/C payment is not incorporated into all existing agreements meaning adjustments will need to be made with their buyers.
Responding to this objection, Mr. Sujatmiko assured that the government will keep this regulation on track and is ready to assist exporters in adjusting to the new L/C provisions, saying, "if any problems occur, the Ministry of Trade will be involved hand-in-hand to help. In the case of any temporary exception, the L/C obligation will follow after existing sales contract expire."
As an L/C is now mandatory for almost every transaction for energy and mining products—including their derivatives—the current predominate payment mechanism of telegraphic transfer can no longer be used forsuch commodities. To support its policy, the government will impose sanctions for non-compliance, although specific sanctions arenot set out in the Regulation.
Marwan Batubara, Executive Director of Indonesian Resources Studies (IRESS), expressed his support for Regulation, noting that the Government intends to comprehensively announce it to all stakeholders.
"The key is not to be too hasty," Mr. Batubara suggested.
(hot/kc)