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Govt provides conditional suspension for mandatory use of L/C
The government has offered flexibility for exporters who still cannot comply with the obligatory use of letters of credit (L/C), which took effect starting from Wednesday
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T
he government has offered flexibility for exporters who still cannot comply with the obligatory use of letters of credit (L/C), which took effect starting from Wednesday.
The L/C rule governs four primary commodities: coal; palm oil and palm-kernel oil; oil and gas; and minerals, including tin.
Trade Minister Rachmat Gobel said that the suspension could apply to exporters who obtained exclusions from either the Energy and Mineral Resources Ministry or the Agriculture Ministry.
'This is intended to give time for exporters to adjust and revise contracts made and signed before the Trade Ministry Regulation No. 04/2015 [on mandatory L/C use] was issued so that it will not hamper their exports,' he said in a statement.
Following the suspension, an audit will be carried out to decide whether the exporters are eligible to be excluded temporarily from the obligation, according to Trade Ministry Regulation No. 26/2015 that specifies the suspension.
Apart from that, the L/C term can be carried out later through export financing institutions to be set up by the government in addition to foreign-currency banks. (nvn)(++++)
