Indonesia: Implementing a risk-based approach at the Ministry of Trade

March 2022

The Indonesian Ministry of Trade plans to officially implement the Trusted Traders concept this year, resulting from a joint project with the German Alliance for Trade Facilitation. Moreover, measurable time reductions in import and export processes were achieved.

Project approach

Between 2019 and 2021, the Indonesian Ministry of Trade (MoT) and the German Alliance for Trade Facilitation jointly developed a risk-based approach to Trusted Traders for two core processes:

  1. import and export licensing
  2. post-clearance inspection of goods

Both processes marked the starting point to develop an integrated risk management system with support from Customs and the National Single Window Agency (LNSW).

In September 2020 the MoT and the German Alliance rolled out a pilot program with compliant trade facilitation partners. The project partners jointly developed a catalogue with parameters for the Trusted Traders concept. By evaluating the pilot companies, the project team tested those parameters as well as the feasibility and applicability of the compliance approach.

Based on testing various aspects of a Trusted Traders approach, the project team developed recommendations for implementing the scheme together with MoT. The concept simplifies import and export processes for companies that have achieved Trusted Trader status.

Achievements

Even though activities had to be adapted to the Corona situation, the project achieved great successes. In the Directorate of Import and Export of the MoT, the average processing time for an import authorization was reduced by 3.86 days per import authorization. In 2018, the average was 7.8 days per import permit.

The project established a common ground for the implementation of the Trusted Traders concept:

  • The MoT, Customs, and LNSW jointly worked out benefits for companies participating in the program.
  • The project team supported MoT to develop criteria for the Trusted Traders, meeting international standards for trade facilitation programs to the greatest extent possible.

The MoT plans to officially implement the Trusted Traders concept this year. The project team formed recommendations for the full deployment of the Trusted Traders concept in Indonesia to assist the MoT to implement it this year. During the project period, three new regulations were issued to improve documentation and processing for import and export processes:

  • Simplification of Trade through the regulation for reputable traders/Reg 17/2021). A regulation for reputable traders with parameters proposed partly based on the recommendations of the pilot project.
  • Simplification of controls after post border: no need for self-declaration for companies based on Reg 51/2020.
  • Cooperation between authorities: Signing of a MoU between Customs and the MoT for Data Sharing

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