Indonesian import regulations are often changing, so it’s not uncommon that foreign companies find their products stuck in Indonesian customs.
In this article, we will explain what you need to do when your products get stuck in the customs and how to prevent it from happening in the first place.
Main reasons why your goods get stuck in Indonesian customs
One of the main reasons why products get stuck in the customs is because your consignee does not have the import license or the necessary supporting documents. Some products require further papers in addition to permits.
Another reason why your products might get stuck is when there is a red channel inspection at the customs. It is a customs inspection that will be performed selectively.
This means that in addition to document verification your shipment will be inspected physically as well, item by item.
How to prevent your goods from getting stuck in the customs?
For everything to go smoothly in the customs, you need to prepare some essential documents in advance.
#1 Acquire correct import licenses
To import to Indonesia, you must first acquire an Importer Identification Number (API). This license allows you to start importing.
Before you apply for an API, you need to decide whether you want to import goods for your own production or you want to become a general importer. Accordingly, you can either have an API-P or API-U.
If you would like to know more about importing to Indonesia, read our previous article on how to calculate customs duty and import taxes in Indonesia.
#2 Packing list
A packing list is a document that accompanies your goods and allows to check whether the shipment has been packed correctly or not. It can be compared to the commercial or proforma invoice.
It is prepared by the seller and should indicate the dimensions and contents, net and gross weights of all shipping items.
#3 Commercial Invoice/Proforma Invoice
A proforma invoice is a preliminary invoice that has not been billed yet but contains sufficient information to determine the duties and examine the consignment.
A commercial invoice, on the other hand, is more detailed and gives the true value of the imported goods.
Both invoices should give enough information to determine the import duties and the eligibility of the shipment.
#4 Bill of Lading (BL) or Air Waybill (AWB)
Bill of lading and air waybill are documents issued to acknowledge the transport of the shipment.
A bill of lading accompanies goods shipped by sea; an air waybill covers the cargo from one airport to another.
What procedures are conducted at the customs?
The PIB (Persetujuan Impor Barang) – Import Declaration Form
Imported goods must be declared to the customs authority. When the shipment has been processed, the customs office will release an Import Declaration Form (PIB). The PIB includes import duties, value-added tax, and income tax.
This form is issued to declare the goods, with or without the import licenses. Thus, it does not automatically mean that your shipment will be released.
Even if you pay the PIB, you cannot import your goods if you do not have the relevant import licenses.
Straits Partners can help you obtain the necessary licenses and sort out the paperwork.
The PJM (Pemberitahuan Jalur Merah) – Notice of the Red Channel
Upon arrival, imported goods are processed in 3 channels:
Green channel – document verification only, the goods are cleared
Yellow channel – additional documentation is required before they issue the Approval Letter for Release of Goods. Straits Partners can help you with preparing these documents.
Red channel – physical inspection of goods, every shipment needs to be inspected one by one. Straits Partners can assist you with this as well.
Your goods can get stuck in the red channel when there are changes in taxes, regulations, HS codes, etc. In that case, a notice of the red channel, which states that your goods are retained, will be released.
To get your goods, we will need the response of the PJM together with the contact of the customs officer who is handling your goods.
How long will it take to get your stuck goods out of Indonesian customs?
If your goods get stuck in the customs and you are not using our import service, we can still help you get hold of your goods.
In general, it takes approximately one week to get the goods out of the Indonesian customs.
For instance, if you contact us on Monday, we will immediately notify the customs office. Subsequently, we will communicate with the customs officials either by meeting or by email.
The earliest possible day you could receive your goods would be the next Monday or Tuesday.
What are the possible solutions when your products are stuck in Indonesian customs?
The customs office will give us three possible solutions to get your goods out of the customs.
#1 Paying the coordination fee
One of the options is to pay the coordination fee, meaning that you will get your shipment out of the customs, but it can be quite expensive.
#2 Putting goods for auction
Alternatively, the customs office may put your products up for an auction. This means that your items will be put up for a bid and sold to the highest bidder.
The good news is that Straits Partners can buy the shipment out for you.
The third option is that the customs office may require you to re-export your shipment. This means that if you can’t import the goods that are stuck in the customs, you will need to export them.
How to calculate the value of your shipment
Let’s say that the value of your retained goods is 200 million IDR and the fine is 100 million IDR. The total value of your shipment during the auction would be 300 million IDR.
If you have already paid the fine, Straits Partners will pay 200 million IDR for your shipment at the auction.
Importing goods to Indonesia via an importer of record (IOR)
The best way to not have your products stuck in the customs is to prepare in advance and obtain all the required licenses beforehand or to use an importer of record service.
An importer of record service allows you to import your products to Indonesia fast and seamlessly without acquiring any licenses.
Furthermore, you don’t need to worry about any tax liabilities either as the consignee will pay all the taxes. Send us an email at [email protected] to learn more.
However, if your goods are already stuck in Indonesian customs, it’s important to have good relations with the authorities, which Straits Partners can help you with.
If you would like to start importing on a greater scale, we can help you with establishing your own import company in Indonesia. Get in touch with us by mail to us at [email protected]