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Attention export to Indonesia! One month later, Indonesia will exchange electronic information of origin with my country!

2020-09-16

Please beware of risks if the invoice is low!

On September 2, the General Administration of Customs issued No. 100 of 2020 (Announcement on matters related to the electronic networking of origins between China and Indonesia):

In order to further facilitate the compliant customs clearance of goods under the free trade agreement, from October 15, 2020, the “China-Indonesia Origin Electronic Information Exchange System” was officially launched, and the “China-ASEAN Comprehensive Economic Cooperation Framework Agreement” was transmitted with Indonesia in real time “(Hereinafter referred to as “China-ASEAN Framework Agreement”) the electronic data of the certificate of origin and the flow certificate.

In terms of export declaration:

The consignor of export goods or its agent (hereinafter referred to as the “exporter”) shall fill in the “Customs Declaration Form for Exported Goods of the People’s Republic of China” or “Customs Exit of the People’s Republic of China” in accordance with the relevant provisions of Announcement 51 when declaring the export of goods exported to Indonesia. Information about the origin of the Goods Filing List.

If the system prompts that there is no electronic information on the certificate of origin or movement certification, or when the goods are exported, the exporter fails to fill in the information on the origin of the exported goods in accordance with the requirements of Announcement 51, or the goods are exported due to changes in the certificate of origin information. If it is necessary to modify the export declaration form, the exporter shall apply to the customs to go through the formalities for the modification of the declaration form to supplement the origin information.

Announcement address:

http://www.customs.gov.cn/customs/302249/302266/302267/3269616/index.html

What does electronic networking of origin mean?

The certificate of origin is one of the main basis for the importing country to determine the tax rate and treatment of goods, trade statistics, implement quantity restrictions (such as quotas, licenses, etc.) and control imports from specific countries (such as anti-dumping duties, countervailing duties). The certificate of origin is comparable to “paper gold” and is an important document for import and export enterprises to enjoy tariff reduction or exemption.

On the other hand, buyers have asked for a lower invoice amount, and everyone has encountered it more or less. In order to combat this kind of low-cost customs declaration, the customs of the importing country has one of the effective ways to exchange electronic data of origin with my country’s customs.

For example, Pakistan. As early as 2018, it required China and Pakistan to activate the electronic data exchange system. After the Pakistani Prime Minister visited China in November of that year, China and Pakistan signed a memorandum of understanding again, and electronic data exchange entered actual operation. China and Pakistan are now exchanging export data every quarter to combat low-price customs declarations.

In the latest “Protocol between the Government of the People’s Republic of China and the Government of the Islamic Republic of Pakistan on the Amendment of the Free Trade Agreement”, which took effect on December 1, 2019, the “Customs Cooperation Chapter” was specifically added: “The two sides will ensure that November 2018 Implementation of the Memorandum of Understanding on Electronic Data Exchange signed by the customs authorities on the 3rd, and strive to take further measures including appropriate mechanisms to address concerns about export price information.”

It is understood that Pakistani Customs attaches great importance to the FOB price of goods. The customs clearance amount declared by local importers in Pakistan must be consistent with the export amount declared by Chinese exporters to Chinese customs in order to successfully complete customs clearance. Otherwise, local importers in Pakistan will be fined. The exporter’s certificate of origin will also be returned by the Pakistani customs, and the domestic commodity inspection authorities will also investigate and deal with domestic enterprises!

At present, among the preferential trade arrangements that my country has implemented, the electronic networking system of origin that has been built and put into operation, which transmits the electronic data of origin under each “Agreement” is:

1. Hong Kong and Macau CEPA certificate of origin online verification system

2. Cross-Strait Economic Cooperation Framework Agreement (ECFA) Electronic Information Exchange System of Origin

3. China-Switzerland Declaration of Origin Data Exchange System

4. China-Korea Electronic Data Exchange System of Origin and China-Korea Electronic Data Exchange System of Origin under the Asia-Pacific Trade Agreement

5. China and New Zealand Origin Electronic Information Exchange System

6. China-Pakistan Origin Electronic Information Exchange System

7. The transfer confirmation bookmark issuing system through the Hong Kong/Macau transit cargo origin management system

8. China-Chile Origin Electronic Information Exchange System

9. China-Singapore Country of Origin Electronic Information Exchange System

10. China-Georgia Origin Electronic Information Exchange System

11. China-Indonesia Electronic Information Exchange System of Origin (October 15, 2020)

Why is networking with Indonesia particularly worthy of attention?

Everyone who has worked in the Indonesian market knows that Indonesia’s customs clearance can be regarded as the most difficult in the world. In addition, there are many requirements for FORM E, and the inspections are extremely strict. If they fail, they will be returned and fined!

Inquiries concerning the return of certificates initiated by the Indonesian side involved many types of goods, including clothing, chemicals, and machinery. The content of the return certificate is varied: whether it conforms to the direct shipping rules (investigate whether there is a transit port), whether the certificate of origin meets the standards, questioning the method of invoice pricing, and not filling in manufacturer information, etc.

The Indonesian Customs has adopted measures such as postponing the preferential treatment of tariffs, withholding the goods in advance, collecting deposits or levying taxes on the goods for which the certificate is returned inquiries, and then refunds or other treatments based on the investigation results. In addition, the Indonesian side does not refund the deposit and other irregular operations, and the interests of the enterprise are seriously damaged. To avoid losses, some companies have to choose to give up tariff preferences in the free trade zone.

We don’t know whether Indonesia’s verification will be stricter and faster after the electronic information on the origin of China and Indonesia is connected. However, foreign trade companies need to be prepared. After all, Indonesia’s economy is not prosperous due to the impact of the new crown epidemic. It’s easy to get some “moths”.

Indonesia is currently working on a comprehensive road map of Making Indonesia 4.0 to promote industries that produce imported substitutes. According to a simulation conducted by the Indonesian Ministry of Industry, imports will be reduced by 35% in 2022, while production can be increased by 12.89%. Among them, seven industrial fields have been designated as priority areas for the development of domestic Industry 4.0, namely the catering industry, textile and garment industry, motor vehicle industry, chemical industry, electronics industry, plus two new sectors, such as pharmaceutical and medical equipment industry.

Indonesia’s import control policies mainly include: limited bans, implementation of pre-shipment inspections, regulations on ports of entry for specific commodities shipped outside of Java, and improved product certification agencies (LSPro). There are also increased most-favored-nation tax rates for strategic commodities, increased implementation of trade remedy measures (such as protection policies, anti-dumping measures, and countervailing duties), mandatory implementation of Indonesian National Standards (SNI) rules, and firm and consistent implementation of the use of national products (P3DN) )plan.

According to the latest data released by the General Administration of Customs on September 8, Indonesia’s imports from China dropped by 8.1% year-on-year in the first eight months of this year.

Under the current economic environment, please pay attention to friends who ship to Indonesia:

Don’t blindly follow the customer to make the first invoice amount too low;

Please pay attention to the accuracy and compliance of the second FORM E. At present, the FORM E return inquiry has become a very abnormal but very effective trade barrier method in Indonesia.


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