The Ministry of Finance ("MoF") has issued two regulations on Temporary Import and Re-export of Imported Goods.
The first regulation, MoF Regulation on Temporary Import ("MoF Regulation 106")amends the list of temporary imported goods that are exempt from import duty. The second regulation, MoF Regulation on Re-export of Imported Goods ("MoF Regulation 102") regulates re-export, including prohibitions, investigations of applications and administration of re-export.
After these two regulations became effective, the previous regulation on Temporary Import("MoF Regulation 178")
What the law says
Temporary import is the entry into the customs area of imported goods that are intended to be re-exported. Several issues are amended in MoF Regulation106,including the imported goods that are subject to exemption, the period of temporary import and the collateral used in temporary import.
Under MoF Regulation 106, the temporary imported goods that are no longer subject to the exemption from import duty are:
- goods that are used for professional needs, which are not directly used for the purpose of production and infrastructure projects
- several types of vehicles or means of transportation
- goods imported by the government
Meanwhile some scope of goods are amended to be more generalized: e.g., goods that are used for professional needs. Previously, MoF Regulation 178 stipulated goods that are used for professional needs can only be exempted from import duty if the goods are not directly used for the purpose of production and infrastructure projects.
The goods that are subject to exemption for the purpose of exhibitions, seminars, conferences and other related activities include four-wheeled vehicles with a minimum engine capacity of 3000 cc, excluding buses and trucks, and two wheeled motor vehicles with a minimum engine capacity of 500 cc. The maximum period of temporary import for these goods is two months (cannot be extended) and the collateral used must be in the form of cash or a bank guarantee.
Additionally, MoF Regulation 178 stated that the maximum temporary import period was three years, while MoF Regulation 106 regulates that the general temporary import period is one year and it can be extended to a maximum period of three years.
Re-export of Import Goods
Re-Export of Import Goods ("Re-export") is the export of previously imported goods from the customs area or other places that are treated the same as Temporary Storage Areas ("TPS") outside the customs area. There are several amended and new provisions under MoF Regulaiton 102 that were not stipulated under MoF Regulation 149.
The added provisions include:
- Prohibition of re-export
- Investigation of re-export application
- Administration of re-export
First, the new provisions add that the imported goods may not be re-exported without the exporter submitting an import declaration to the head of customs office and the head of customs office conducting an investigation of the imported goods.
The investigation mentioned above includes a physical inspection, which will cover:
- whether the number of containers is in accordance with the customs declaration of transportation of goods
- whether any goods notified in the customs declaration of transportation of goods are not present
- whether any goods not notified in the customs declaration should have been notified, as stipulated in the manifest regulation
- prohibited goods
- import restrictions that are not included in the customs notification
- whether the importers have the necessary licenses to import the goods
The customs notification mentioned above includes notifications of:
- planned arrival of the transport facility
- arrival manifest of the transport facility
- goods exported from customs zone that will be transported to a TPS or another customs zone
- the transport of goods originating from the customs area from one place to another place without passing by the customs area
Second, MoF Regulation 102 also elaborates on the application for re-export approval. It includes the procedure, the customs office that is authorized to issue the approval and the time schedule for granting/rejecting the re-export application. If the application does not fulfil all the necessary requirements, the head office of customs must delay the re-export application process and conduct further investigation on the application
Third, MoF Regulation 102 stipulates that if the re-export application is granted, the exporter will need to notify the head of customs office and acquire a registration number from the customs office. In addition, the exporter must include the imported goods in the outward manifest.
Potential implication for importers/exporters
- Noting that the scope of goods that can be granted an exemption of import duty are decreased, Importers must pay attention to the list of goods that are subject to exemption from import duty.
- Exporters whose application is granted must notify the head of customs office and must acquire a registration number before re-exporting the goods.
- The temporary import period granted is the same as the previous regulation, which is a maximum of three years, but the new regulation first grants importers a temporary import period of one year, which can be extended for a maximum of two years.