KSP LEGAL UPDATES
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KSP LEGAL UPDATES
Export Of Mining Products Under The 2017 Mining Regulations
As mandated by the Law Number 4 of 2009 regarding mineral and coal mining, holder of Mining Business License (Izin Usaha Pertambangan – IUP) and Special Mining Business License (Izin Usaha Pertambangan Khusus - IUPK) are required to process and refine mining products domestically before exporting them overseas.
Early this year, the Government of the Republic of Indonesia enacted Ministry of Energy and Mineral Resources Regulations Number 06 of 2017 regarding Guidance and Requirements of Providing Recommendation to Sell Processed and Refined Mineral Abroad (“MEMR Reg 06/2017”).
Holder of IUP Operation Production, IUPK Operation Production for Process and/or Refinery, IUPK Operation Production for Transportation and Sale and Contract of Work (“Authorized Mining Exporter”) are able to sell the metal mineral and non-metal mineral which meet minimum requirements of processing and refinery for certain amount. However, the Authorized Mining Exporter should firstly obtain a recommendation from the MEMR (“MEMR Recommendation”).
The Authorized Mining Exporter should submit some documents as referred to Article 5.2 of the MEMR Reg 06/2017 such as Clear and Clean certificate for IUP holders, Report of Analysis (ROA), Certificate of Analysis (COA), payment receipt of Non-Tax State Revenues and so forth. Approval or rejection of such application shall be issued within 14 (fourteen) working days. Meanwhile, the MEMR Recommendation and its renewal shall be valid for 1 (one) year.
In the evaluation process the MEMR will also determine amount of mining products that can be sold abroad by considering:
1. Estimation of reserves or guaranteed supply of raw materials to meet the needs of purification facilities;
2. The amount of overseas sales in approval of the work plan and the current year's cost budget;
3. Input capacity of purification facility; and
4. Physical development of purification facility development.
Another permit that should be obtained is Export Approval from the Directorate General of Foreign Trade as stipulated in Article 2.2. of the MEMR Reg 06/2017. Validity period of the Export Approval shall be in line with the validity period of the MEMR Recommendation.
To obtain Export Approval, the appointed surveyor will conduct verification or technical review on the processed and refined mining products that will be exported to ensure that such products meet the minimum processing and refinery requirements. Verification process shall be carried out before and during the loading process as well as during the stuffing process.
The appointed surveyor will release Surveyor Report not later than 1 (one) day after the verification process. This report can only be used for 1 (one) time shipment of 1 (one) Export Declaration number.
Meanwhile, the Authorized Mining Exporter must submit written report on either successful or unsuccessful export activities periodically at the latest fifteenth day of the following months to Export Director of Mining and Industrial products of the Ministry of Trade, copied to the MEMR and the Ministry of Industrial. If they do not fulfill this requirement, they will be penalized by administrative sanction.
It is worth noting that if the Authorized Mining Exporter fails to complete 90% of physical development plan of purification facility development until 30 (thirty) days before the expiry date of the MEMR Recommendation, the Export Approval could be revoked by the Ministry of Trade.
Early this year, the Government of the Republic of Indonesia enacted Ministry of Energy and Mineral Resources Regulations Number 06 of 2017 regarding Guidance and Requirements of Providing Recommendation to Sell Processed and Refined Mineral Abroad (“MEMR Reg 06/2017”).
Holder of IUP Operation Production, IUPK Operation Production for Process and/or Refinery, IUPK Operation Production for Transportation and Sale and Contract of Work (“Authorized Mining Exporter”) are able to sell the metal mineral and non-metal mineral which meet minimum requirements of processing and refinery for certain amount. However, the Authorized Mining Exporter should firstly obtain a recommendation from the MEMR (“MEMR Recommendation”).
The Authorized Mining Exporter should submit some documents as referred to Article 5.2 of the MEMR Reg 06/2017 such as Clear and Clean certificate for IUP holders, Report of Analysis (ROA), Certificate of Analysis (COA), payment receipt of Non-Tax State Revenues and so forth. Approval or rejection of such application shall be issued within 14 (fourteen) working days. Meanwhile, the MEMR Recommendation and its renewal shall be valid for 1 (one) year.
In the evaluation process the MEMR will also determine amount of mining products that can be sold abroad by considering:
1. Estimation of reserves or guaranteed supply of raw materials to meet the needs of purification facilities;
2. The amount of overseas sales in approval of the work plan and the current year's cost budget;
3. Input capacity of purification facility; and
4. Physical development of purification facility development.
Another permit that should be obtained is Export Approval from the Directorate General of Foreign Trade as stipulated in Article 2.2. of the MEMR Reg 06/2017. Validity period of the Export Approval shall be in line with the validity period of the MEMR Recommendation.
To obtain Export Approval, the appointed surveyor will conduct verification or technical review on the processed and refined mining products that will be exported to ensure that such products meet the minimum processing and refinery requirements. Verification process shall be carried out before and during the loading process as well as during the stuffing process.
The appointed surveyor will release Surveyor Report not later than 1 (one) day after the verification process. This report can only be used for 1 (one) time shipment of 1 (one) Export Declaration number.
Meanwhile, the Authorized Mining Exporter must submit written report on either successful or unsuccessful export activities periodically at the latest fifteenth day of the following months to Export Director of Mining and Industrial products of the Ministry of Trade, copied to the MEMR and the Ministry of Industrial. If they do not fulfill this requirement, they will be penalized by administrative sanction.
It is worth noting that if the Authorized Mining Exporter fails to complete 90% of physical development plan of purification facility development until 30 (thirty) days before the expiry date of the MEMR Recommendation, the Export Approval could be revoked by the Ministry of Trade.
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