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Indonesia: New freight forwarding rules

On April 16 2015, the Ministry of Transportation of Indonesia issued Regulation 74 to replace Regulation 10 of the 1988 on freight forwarding business

Oene MarseilleEmir Nurmansyah
On April 16 2015, the Ministry of Transportation of Indonesia issued Regulation 74 to replace Regulation 10 of the 1988 on freight forwarding business. The new regulation provides, among others, additional details on the licensing requirements of the business.

Under the new regulation, a freight forwarder is required to hold a licence issued by the relevant governor with jurisdiction over its place of domicile (in the previous regulation, such licences were issued by the Ministry of Communications).

Investment by foreign investors is permissible, although under the prevailing investment laws, there are restrictions (investment in the freight forwarding business is subject to a 49% foreign ownership limit and the freight forwarder is required to register with the Ministry of Transportation). Additionally, the Investment Coordination Board (BKPM) requires that freight forwarders with foreign investment status have at least $2.5 million in paid-up capital.

The new regulation lists in details the documents and the technical requirements necessary to obtain a licence. Additionally, the new regulation includes specific provisions requiring the freight forwarder to insure its shipments (such a provision was absent from the previous regulation). The new regulation requires the freight forwarder to commence its business no later than three months after licence issuance. The freight forwarder must also submit reports on its business, shipment, and receipt of goods. Any changes to its corporate data and new branch openings must be reported.

The new regulation is effective from April 9 2015 and all freight forwarders are required to adjust their licences and operation to conform to the new regulation within three years of its issuance.

Administrative sanctions will be imposed in case of a violation through written warnings, suspension or revocation of the licence.

Oene Marseille and Emir Nurmansyah

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