Indonesia’s customs environment continues to present challenges for U.S. exporters, particularly with respect to valuation practices and pre-shipment requirements. Despite Indonesia being a signatory to the World Trade Organization (WTO) Customs Valuation Agreement, U.S. firms frequently report that Indonesian Customs authorities rely on a reference price system to assess duties for certain imported goods. Rather than consistently using the declared transaction value as the basis for customs valuation—as required by the WTO—Indonesia’s Directorate General of Customs and Excise often determines dutiable values based on historical import data, including the average price of similar goods imported over the previous 90 days and the importer’s assessed risk profile.

This practice has led to inconsistencies in customs clearance, especially for U.S. companies importing high-quality or specialized goods, where invoice values may differ substantially from historical averages.

In addition, Ministry of Trade Regulation No. 87/2015 continues to require pre-shipment verification and inspection (PSI) for a broad range of imported products, including electronics, textiles, footwear, toys, food and beverages, and cosmetics. These inspections must be conducted by government-appointed third-party verification companies (referred to as “surveyors”) in the country of export. The costs of these inspections are borne by the importer and can result in delays, increased transaction costs, and in some cases, the need to reroute shipments to designated ports or airports that are authorized to handle such verified cargo.

Further tightening of customs controls has occurred in sectors prone to regulatory or environmental scrutiny. Since 2019, Indonesia has required pre-shipment inspections of imported scrap materials, including paper, plastic, and metals, to ensure compliance with environmental regulations. These inspections aim to verify that materials are homogeneous, clean, and free of hazardous waste, and that they meet minimum quality thresholds. In 2020, Indonesia added a registration requirement for scrap exporters with the nearest Indonesian Embassy or consulate.

Following concerns from international recyclers and industry groups, Indonesia’s Ministry of Trade announced that it would amend regulations governing contamination thresholds. As of late 2021, Indonesia revised the permissible level of impurities in imported scrap from 0.5 percent to 2.0 percent, bringing the regulation more in line with international norms. However, U.S. exporters should continue to coordinate closely with Indonesian importers and verification agents to ensure compliance with the latest technical and documentary requirements.

Companies are advised to engage qualified customs brokers, maintain complete documentation, and proactively confirm product-specific requirements well in advance of shipping. Misclassification, undervaluation, or noncompliance with inspection procedures may result in fines, cargo holds, or re-export orders.