ALL OF A SUDDEN GOVERNMENT REGULATION APPEARS TO MAKE A MESS OF BUSINESS

Productive businesspeople who in the process of importing goods suddenly had to cancel order and pay cancellation fee. Such was absolutely unexpected condition and very shocking to Indonesian importers. Just when transactions were in the middle of procedure, all of a sudden Government Regulation appears to forbid importers buying steel from Krakatau Steel. “We and our counterpart abroad are bound by contract. They demand cancellation fee and by the rule we have to pay them. The amount of cancellation fee is of no small magnitude. We have to bears loss.” A businessplayer expressed his grievances to Business News (30/6).

All of a sudden without illumination or pre warning about Tax Importing Due for Trading Safeguarding (BMTP) on Iron and Steel products HS.7210.61.11.00 through the Regulation of the Ministry of Finance No.137.1/PMK/011/2014. The recommendation was based on investigation by the Committee for Indonesia Trading (KPPI) by request of PT NS Blue Scope and PT Sunrise Steel.

The consideration was based on investigation and analysis by the Indonesia Commerce Safeguarding (KPPI) who had discovered that applicants were suffering severe losses with imported iron and steel not based on Guidelines HS.7210.61.11.00 In view of that matter KPI recommended application of BMTP.

The recommendation was only based on the interest of applicants (PT NS Blue Scope and PT Sunrise Steel) not on national interest because the stipulations did not involve other stakeholders so it was suspected to be a move toward monopoly and kartel. “The threat of loss was only based on the perspective of the two companies (Blue Scope and Sunrise Steel). KPPI should not have examined he two companies but supposedly more on the overall. There were indications of disguised conspiracy.”

It was just like a act of monopoly by the two companies. Interest of the two companies could not be the underlying reason for making a Law. Implementation of PMK No.137.1/PMK/011/2014 on BMTP for import iron and steel from date of ratification was only 7 days. This was unfair because importers of iron and steel were not given enough time like other PMK. PMK No.137.1/PMK 001/2014 as ratified on July 15, 2014 and was put in effect on July 22, 2014” there were indications of irrational ways and game playing by personals”.

There was not enough time given to overseas exporters to have clarification, among others exporters from Vietnam and Korea. (Article 79 PP 34 year 2011 on KADI and KPPI) During investigation, KPPI must conduct hearing session to enable exporters, producers, applicants of the Domestic Industry, importers, the Government and certain exporter countries and concerned parties to set forth their evident, views, and responses. “The Government had broken the rules”.

There had been no overall illumination on PMK No.137.1/PMK/011/2014 on the imposition of BMTP Tax on iron and steel to all stakeholders especially importers of iron and steel of non HS.7210.61.11.00 in some cities; illumination was only in Jakarta. Even that was only based on information from Head of the Indonesia Anti Dumping Committee (KADI) which means the Government had violated the Rules in PP 34 Article 82 verse (1) KPPI must inform about temporary safeguarding action as intended in PP34 year 2011 on KADI and KPPI Article 81 verse (7) to applicants of Domestic Industry and association of importers. Administratively the action was wrong. “There was no adaptation period of 3 months to enable importers to coordinate with buyer.”

Implementation of PMK No.137.1/PMK/011/2014 on the imposition of Import Tax on Iron and Steel products had injured the spirit and understanding of ASEAN which was zero percent (0%) for iron and steel products until December 2015 within the ATIGA Framework accommodated in PMK No. 208/PMK.011/2012 on the Stipulation of Import Tarif within the framework of ASEAN Trade in Good Agreement. “We have signed a contract agreement with an exporter company from Vietnam but with the implementation of PMK No.137.1/PMK/011 2014 had obliged us to cancel contact with buyer. The consequences is that we have to pay compensation fee which is quite sizable”. (SS)

Business News - July 3, 2015