No. SE-05/BC/2010





In line with the participation of Indonesia in Free Trade Agreement schemes, both in the scope of bilateral and regional ties, we send you technical guidance for verifying goods import notification (PIB) under the framework of Free Trade Agreement schemes as follows:

1. General Provisions and Definitions

Referred to in this Circular as:

a. "Free Trade Agreement" refers to an agreement between two or more countries in the economic sector, covering among others reduction and! or abolition of tariffs in goods trading.

b. "AFTA (ASEAN Free Trade Area)" refers to an agreement reached by ASEAN member states to form a free trade zone in order to improve the regional economic competitive edge of ASEAN by turning ASEAN into a world production hub.

c. "CEPT (Common Effective Preferential Tariff)" refers to a scheme to realize AFTA by reducing tariffs to up to 0 - 5% and abolishing quantative restrictions and other non-tariff barriers.

d. "ATIGA (ASEAN Trade In Goods Agreement)" refers to a goods trade agreement scheme among ASEAN member states which will function as a substitute for CEPTscheme.

e. "ACFTA (ASEAN-China Free Trade Area)" refers to an agrement among ASEAN member countries to form a free trade area with China.

f. "AKFTA (ASEAN-Korea Free Trade Area)" refers to a framework agreement on comprehensive economic cooperation between the governments of ASEAN member countries and the Republic of Korea.

g. "IJ-EPA (Indonesia-Japan Economic Partnership Agreement)" refers to bilateral economic cooperation between Indonesia and Japan covering 11 fields or groups of agreement including trade,in goods, rules of origin and customs procedure.

h. "Rules of Origin" refers to criteria that must be met for a type of export goods to issue its certificate of origin by the government in the country of origin according to rules based on an agreement.

i. "Certificate of Origin, hereinafter called as SKA" refers to a document showing that a type of goods has met the rules of origin and functioning as a means to get preferential tariff according to respective agreement.

j. "Third Country Invoicing" refers to an invoice issued by companies located in FTA member countries or non FTA member countries in the interests of exporting companies located in FTA member countries. At present it only applies to AFTA, AKFTA and IJ-EPA schemes.

k. "Back-to-back Certificate of Origin" refers to SKA issued by the intermediate exporting party member state based on SKA issued by the first exporting member state.

l. "Issued Retroactively" refers to the subsequent issuance of true SKA, namely issued 3 (three) days after the date of shipment up to 1 (one) year, caused by unintentional errors, or other accountable reasons so that SKA cannot be issued at the time of exporting.

m. "Certified True Copy" refers to a sign put in a copy of SKA as a substitute for true SKA lost or damaged before being submitted to the customs office at the port of entry for import settlement, and given a date according to the issuance date of the lost or damaged true SKA and issued no later than 1 (one) year since the issuance date of the lost or damaged true SKA.

n. "Retroactive Check" refers to a request for information by the importing country about the validity of SKA and the fulfilment of criteria of rules of origin from the exporting country, aimed at ensuring that the imported goods deserve to receive preferential tariffs.

o. "Verification Visit" refers to the verification of imported goods conducted by paying a visit to the exporting country if the results of retroactive check are considered unsatisfactory, and the ruie only applies to CEPT-AFTA, At{FTA and IJ-EPA schemes.

2. Products included in the preferential tariff scheme within FTA framework

Products included in the preferential tariff scheme are provided for in Regulation of the Minister of Finance. The Regulation of the Minister of Finance stipulates the charging of preferential customs tariffs for each product.

FTA Scheme Types of SKA Legal Basis
CEPT–AFTA (Common Effective Preferential Tariff – ASEAN Free Trade Area) Form D PMK 125/PMK.010/2006 dated December 15, 2006 the latest amended by PMK 247/PMK.011/2009 dated December 31, 2009.
ACFTA (ASEAN China – Free Trade Area) Form E PMK 235/PMK.011/2008 dated December 23, 2008
AKFTA (ASEAN Korea – Free Trade Area) Form AK PMK 236/PMK.011/2008 dated December 23, 2008 the latest amended by PMK 200/PMK.011/2009 dated December 4, 2009
IJ-EPA (Indonesia Japan –Economic Partnership Agreement) Form JIEPA PMK 95/PMK.011/2008 dated June 30, 2008

3. Certificate of Origin (SKA)

a. SKA within the framework of CEPT-AFTA preferential tariff scheme uses a document Form D, ACFTA uses document Form E, AKFTA uses document Form AK, and IJ-EPA uses document Form JIEPA issued and signed by authorized officials in the countries where exports are conducted.

b. Form SKA is made in English, using ISO A4 size paper, with the number of sheets and appropriation as follows:

c. Each sheet of SKA carries reference number. Examples of the model of each SKA are attached to this Circular.

d. In case of specific reasons, SKA cannot be issued at the time of shipment or in the next 3 (three) days, at the request of the exporter or the appointed agent, SKA can be issued and made retroactive to one year since the date of shipment. In this case, SKA must bear a note/stamp "ISSUED RETROACTIVELY". But to obtain preferential tariffs within the FTA framework provisions in point 4 must constantly be followed.

e. If SKA is lost or damaged before being submitted to the customs and excise office for import settlement, the exporter or appointed agent can apply to the issuing agency for new SKA based on export documents. The new SKA carries a stamp "CERTIFIED TRUE COPY", new reference number, and number and issuance date of lost and damaged SKA. The validity period of new SKA is the same as the lost or damaged SKA. The substitute SKA is issued no later than one year since the issuance date of the lost or damaged SKA;

f. Invoice number contained in SKA may be different from that attached to PIB document. The SKA can constantly be accepted as the basis for the granting of preferential tariffs, provided the linkage of transactions involving the third party, either in the same or different country, can be proven. For transactions involving third party outside the country of the exporter:

g. In case of errors in filling SKA, the wrong part must not be omitted but must be stricken out and corrected by putting the signature of the authorized official.

4. Implementation of preferential tariff scheme

Preferential tariff scheme within the FTA framework is given on condition:

a. Importer must put the facility code of preferential tariff and reference number of SKA in PIB.

b. Importer must send SKA sheets with the format and appropriation as described in point 3 b. to the customs office at the port of entry at the time of applying for PIB (attached to PIB).

5. Verification and Decision of Document Verifying Official.

a. Verification of PIB

b. Verification of SKA

c. Decision of the Document Verifying Official

If the results of verification show that:

1) Appropriate and the validity of SKA is not doubted:
The document verifying official receives preferential tariffs and puts a check mark in the box Preferential Treatment Given in column 4 SKA Form D, Form E and Form AK and signs them.

2) Preferential tariff scheme can not be given:

a) Giving a mark in a box is not accepted (preferential treatment not given), in column 4 SKA Form D, Form E and Form AK, accompanied by reason for rejection (in English) and signature of the document verifying official;

b) Issuing Tariff and Customs Value Assessment Form (SPTNP) for difference between underpaid import duties and PDRI based on common tariffs (MFN).

3) In case of early indications leading to the validity of SKA and rules of origin being doubted, after administrative verification:

4) If the Head of KPU/KPPBC has received confirmation on the validity of SKA from the SKA issuing authority, the confirmation must later be sent to the Unit Handling Objections, with copies addressed to the Directorate of Technical Customs, the Directorate of International Customs, and the Directorate of Investigation.

5) In case of strong clue or early evidence of criminal offence (for instance, document forgery), document verifying official sends the relevant import documents to the Customs and Excise Official at the Control Unit.

6. Official Handing Objections

7. The use of SKA is not valid in:

8. To apply FTA in border areas, provisions related to the relevant FTA are valid but the official must prioritize control related to ban/restriction.

9. Attachment to Circular

Attached, find specimen form used within the FTA preferential tariff scheme, along with examples of cases and analyses of solving problems related to the implementation of FTA..

When this Circular begins to take effect, Circular of the Director General of Customs and Excise No. SE-01/BC/2010 dated January 15, 2010 on the Verification of Certificates of Origin (SKA) of Imported Goods within Free Trade Agreement Schemes and Circular of the Director General of Customs and Excise No. SE-03/BC/2010 concerning The Affirmation of point 5 in Circular of the Director General of Customs and Excise No. 01/BC/2010 are declared null and void.

This is for your implementation with full responsibilities.

Stipulated in Jakarta
on March 23, 2010
NIP 19510621 197903 1 001

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