CUSTOM BONDS

To increase the non-oil gas export the government gives some facilities to the exporters. Those facilities given by the government are the free of customs duties and free of additional customs duties and the deferment of the value added tax on goods and import material that will be used in order to make the export commodities. Those facilities are poured forth in The Minister of Finance Decree number 615/KMK.01/1997 January 16^th, 1997 and in The Memorandum number SE.01/BE/1998 January 5^th 1998.

One of the conditions to obtain those facilities is by giving The Customs Bond guarantee.

To fulfill the need of The Customs Bond guarantee therefore The Indonesia Customs Bond Cooperation (KSCBI) was formed which members are the domestic insurance and reinsurance companies.

KCBI Member's

Customs Bond versus The Bank Guarantee

The Customs Bond guarantee that given by the insurance company has some advantage compare to the Bank Guarantee in the presence of additional due time for 30 days toward the deferment of the customs duties payment and other charges that might burden the exporter that commonly given for 12 months period according to PIB for BAPEKSTA facilities and to the SKEP DJBC period for the Custom and Excise facilities.

The Customs Bond is unconditionally need to the legally of PIB in The Foreign Exchange Bank and furthermore to the expending of import goods/material.

Who is involved in The Custom Bond?

PRINCIPAL

The exporter who has obtains the free customs duties from DJBC or BAPEKSTA-Finance.

OBLIGEE

Minister of Finance cq DJBC/BAPEKSTA-Finance who has given the customs duties deferment on the government charge to the Principal and agree for The Customs Bond guarantee.

SURETY

The Insurance Company who publishes The Customs Bond that agrees to guarantee The Exporter/Importer Producer.

What is the main condition of The Customs Bond?

Customs Bond can be given to the exporter/importer producer who has obtain the free customs duties on the government charge from The DJBC/BAPEKSTA-Finance and published according to the condition of release decree:

Guaranteed amount is the government charges that imposed to the goods/material, which receive the import facility.

Guaranteeing period is equal to release period on the SKEP of Custom and Excise or The Decree of the BAPEKSTA Release added to the due time of 30 days.

Customs Bond prevail as the guarantee and liability of the amount that actually guarantee which is the amount of customs duties and other charges that might burden the exporter who has execute his import activities and has been certified by The Surety.

Customs Bond  is issued by the guarantying Insurance Company based on Imported Merchandise Notification Report  Form or PIB  which been sent by the Exporter or Importer party related to import or export  realization.

What is the purpose of  Customs Bond?

The purpose of Customs Bond is mainly lay on helping the Exporter or Importer in utilizing their resources. It is so because Customs Bond’s guarantee does not need any collateral required, therefore credit plafond acquired from Bank will not be expended or wasted  this way. In Customs Bond, it is not compulsory  to hold 10 % of the total loan from Bank and will not being charged on interest of the rest 90% of the total loan acquired.

What are the procedures in  issuing Customs Bond ?

1. First the Exporter or Importer should apply for an acquitted tax and based on data submitted by them, DJBC/BAPEKSTA-Keuangan would give  the approval.

2. Based on the approval (in the form of acquaintance letter), the Exporter or theImporter party shall see the related surety company ( guarantying Insurance Company ) to acquire Customs Bond facility.

Before the agreement on issuing the Customs Bond is given, the guarantying Insurance Company must have the Exporter or Importer party to fulfill the following requirement :

• Filling in the provided form, all information about the applicant

• Filling in the applying form of Customs Bond facility

• Preparing the  last three year of company’s financial report, which is already being legalized by public accountant.

•  Willing to have a survey executed by the guarantying Insurance Company to its legal resident if considered necessary by the guarantying Insurance Company

3. As Customs Bond given, the applicants ( Exporter or Importer ) must submit a lose out replacement agreement which been already legalized by legal consultant to guarantying Insurance Company. The substance of the agreement  shall be read and explained by the appointed legal consultant before  signed  by the applicant’s board of directors.

4. The applicant then shall submit the legalized and real Custom Bond guarantying letter to the DJBC/BAPEKSTA-Keuangan  and a copy of it shall be kept by the applicant for file.

5. When the import realization occurred,  the applicant shall submit the LPS and PIB documents to guarantying Insurance Company, as the Custom Bond shall be issued based on those documents.

Customs Bond will be consist of  six copies and must be signed by both sides that is the applicants and the guarantor.

The original document shall be given a Rp. 6,000.00 stamp at guarantor’s side and another stamp of  the same nominal for the copy for the applicant.The rest of the copies shall be signed by both parties without being given stamps

It is compulsory that Customs Bond is to be signed by the applicant’s President Director or related authorized position.

6. The original  Customs Bond document shall be occupied by the applicant for PIB legalization procedure.

7. By carrying the real Customs Bond, the applicant can propose the PIB legalization to the Bank.

8.The applicant then shall submit the real Customs Bond to DJBC/BAPEKSTA- Keuangan and shall occupied one copy for them as file.

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