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Cumbersome customs procedures deter US investors: Report
Bureaucratic hurdles in Indonesia complicate business procedures in various sectors, according to the newly released United States-Indonesia Investment Report 2024, including the import of medical devices and consumer electronics.
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Delivered: Goods are unloaded from a cargo vessel on March 24, 2024, at the Jakarta International Container Terminal of Tanjung Priok Port in North Jakarta. (Antara/Muhammad Adimaja)
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new report highlights concerns among United States-based investors about “complex and cumbersome” business processes in Indonesia, particularly regarding customs procedures, leading to longer lead times, higher costs and operational uncertainties.
US companies have invested around US$67 billion in Indonesia over the past decade, according to the US-Indonesia Investment Report 2024 released by the American Chamber of Commerce (AmCham) in Indonesia and the US Chamber of Commerce.
AmCham Indonesia managing director Lydia Ruddy said issues surrounding the import of goods into the country remained an area of concern for US companies, as they made business operations in Indonesia “much more difficult.”
“We are happy to work with the government on this [challenge],” she stated on Tuesday, the day the report was published.
As a case in point, the report highlights difficulties with the duty-free import of essential accessories or detached components of medical devices, some of which are exempt from import duties under prevailing regulations.
While the Health Ministry may understand the intended use [of such parts], customs officials might not, leading to classification discrepancies, which can result in delayed processing or higher costs.
A similar issue, according to the report, arises in the consumer electronics industry, where distributors frequently need to import replacement items under warranty, but these items are sometimes misclassified by customs as new merchandise for sale, causing unnecessary complications.
