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Indonesia: Import tariff changes

Oene MarseilleEmir Nurmansyah
The Indonesia Finance Ministry has issued Minister Regulation 137.1/PMK.011/2014 on July 7 2014, imposing a tariff on the importation of certain iron and steel products into Indonesia. This Regulation is issued following recommendations from the Trade Safeguard Committee of Indonesia (KPPI).

The KPPI determines that the tariff is necessary to prevent serious injury that are deemed to have arisen from increased importation of steel and iron products into the country. The KPPI states that steel importation into Indonesia has increased from 79,279 tons in 2008 to 251,315 tons in 2012 and found a causal relationship between the increase and the threat of serious injury.

It is expected that this safeguard measure will impact Vietnam, Taiwan, and South Korea, as these three countries exported more than 96% of the steel and iron products entering Indonesia.

The tariff applies to iron and steel products with Harmonised System (HS) code 7210.61.11.00 – flat-rolled products of iron or non-alloy steel, of a width of 600mm or more, clad, plated or coated.

The tariffs will be imposed for a period of three years beginning July 14 2014. The tariff amount will be Rp4,998,794 per ton (approximately $425 per ton) the first year, declining to Rp4,314,161 per ton in the second year, declining further to Rp3,629,538 in the final year.

The steep tariff is expected to significantly impact the importation of iron and steel and may lead to price increases among domestic consumers.

The KPPI is not the only agency looking into steel and iron imports into Indonesia. The Anti-Dumping Commission of Indonesia (KADI) has also launched an investigation into the importation of broader steel categories, including those with HS codes 7209.16.00.10; 7209.17.00.10; ex 7209.18.99.00; 7209.26.00.10; 7209.27.00.10; ex 7209.28.90.00; 7209.90.90.00; 7211.23.20.00; 7211.23.90.90; 7211.29.20.00; 7211.29.90.00; 7211.90.10.00; and 7211.90.90.00.

Oene Marseille and Emir Nurmansyah

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