Corporate Tax & Trade
Updates on the Implementation of New Labeling Requirement
It is almost a year since the enactment of Minister of Trade of the Republic of Indonesia Regulation No. 67/M-DAG/PER/11/2013 on Labeling Requirement in Bahasa Indonesia on Goods as amended by Minister of Trade Regulation No. 10/M-DAG/PER/1/2014 ("Regulation 67").
At this point, we should remind our readers of the following upcoming changes in the regulation landscape under this regulation. I. Deadline: 25 December 2014
Regulation 67 became effective on 25 June 2014 for goods which have not been distributed in the market. But there is a grace period for label adjustment until 25 December 2014 for goods which had already been distributed in the market before 25 June 2014. The grace period ends on 25 December 2014.
II. Labeling Requirement and Implementation
The labeling requirement applies for both locally manufactured goods and imported goods. The label should be affixed on the packaging or the goods or on both. It must be:
permanently embossed or printed; or
The label in Bahasa Indonesia must include a clear explanation of the goods and the business actors' identity. The explanation should include usage instructions and danger symbols and/or warning signs, while the business actor's identity should include the name and address of the local manufacturer or the name and address of the importer. The symbols of warning, danger or caution are put on if related to safety, security, health or environment.
Regulation 67 stipulates that the label attached to both products and packaging should not be a sticker. However, we have seen in practice that stickers are still allowed provided that they are super adhesive; therefore, it appears that the implementation is quite lenient.
Nevertheless, Regulation 67 is yet to be tested in its entirety, including its supervision and enforcement. Thus, there is still a possibility that the policy may change and become less lenient.
Corporate Tax & Trade
2 Updates on the Implementation of New Labeling Requirement October 2014
III. Possible Exemption under Regulation 67
The labeling requirement can be exempted in certain circumstances, such as
if the goods are:
bulk goods which are sold or packaged directly in front of
imported goods, such as capital goods, goods for research and
knowledge development, sample goods (not for trading), goods
imported temporarily, goods that will be reimported, or goods of
other countries representatives who work in Indonesia; or
manufactured in Indonesia as capital goods or supporting goods
of production processes.
As Regulation 67 only came into effect three months ago and there may be
adjustments to the system, we may see further changes in the issuance of
exemptions, e.g., requests for additional documents other than those listed in
Regulation 67 to support the exemption applications.
IV. Consistency Concerns
In one case we handled, the client's labels were in a foreign language.
During the application process, the relevant official insisted that the foreign
language terms had to be adjusted to become Bahasa Indonesia.
The applicant adjusted the "foreign term" to Bahasa Indonesia, but the
approval indicated that the previous "foreign term" was allowed. Based on
this experience, there is a possibility of inconsistency from the relevant
authority when reviewing and issuing the labeling approval applications. This
may need to be addressed.
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