For you who want to do export-import activities, it is better to first know the terms that are often used there. With knowing these terms, It is going to make your trading activities easier. Here we present you the import and export terms in Indonesia .
Table of Contents
Before doing any export-import activities, it is better to be familiar with the terms first. The following are common terms that you will often come across when exporting and importing goods in Indonesia. In this article, it will be divided into several categories.
Incoterms in Export and Import Terms
Incoterms stand for international trade terms. More specifically, it is a trade condition or rule imposed by the international trade department. With these, it’s the buyer that pays for the shipping costs, so they’re ideal if you’re the exporter
To begin with, here are some terms in incoterms, namely :
First, exwork is the system for purchasing an item includes only the price of the item. This is without filling fees, handling fees, shipping fees, or other charges. All costs are the responsibility of the buyer or importer.
2. FOB (Free on Board)
Second, the next term is FOB. FOB means that the seller executes all export license letters until the ordered goods are loaded onto the sending vessel. All other costs will be borne by the buyer.
3. CFR (Cost and Freight)
Third, CFR means that the seller shall bear all costs that may be incurred from the time the goods are shipped to the port. Thereafter, any costs incurred will be borne by the buyer.
4. CIF (Cost, Insurance, and Freight)
Basically, the term CIF is almost the same as CFR. At CIF, the seller can perform all responsibilities until the goods arrive at the port and are ready for loading. In addition, the seller is also required to pay insurance for the goods ordered.
5. FCA (Free Carrier)
Fifth, there is FCA. FCA means that the seller is responsible for the export permit until the goods are handed over to the courier or expediter at the previously agreed port.
In this case, the buyer only has to pay the shipping charges and the seller’s duties and responsibilities are done once the buyer has received the goods at the port.
6. FAS (Free Alongside Ship)
Aside from FCA, there is FAS. Free alongside ship or vessel is the responsibility of the seller until the goods ordered by the buyer arrive at the port of departure and ready to be approached by the dredger for the loading process. All other costs incurred after the activity must be paid by the buyer. This term is also used for water transportation only.
7. Delivered at Place (DAP)
Seventh, Delivered at Place or DAP is a term that focuses more on the seller’s responsibility to be able to arrange the delivery of goods. Besides that, it is also responsible to handle goods to a place that has been mutually agreed upon beforehand.
8. Delivered Duty Paid (DDP)
Besides DAP, there is also DDP. In this term, the seller will send the goods to the destination. Not only that, the seller will bear all these costs including insurance costs and also all other costs that need to be paid such as taxes, excise, import etc. In this case, the seller will also obtain a permit from the buyer to import the goods.
9. Delivered at Terminal (DAT)
Not only DAP and DDP, DAT refers to the seller making all payments closely related to the shipping cost of a good. So that it is unloaded at the port of destination. After the goods are unloaded at the port, the seller is no longer responsible for the goods.
10. Carriage and Insurance Paid to (CIP)
Next one is SIP. This means that the seller must pay for cargo insurance and also for the risk of damage and loss of the goods upon delivery. CIP also requires the buyer to be able to complete export clearance, which is a series of administrative and tax document processes that must be completed for the export and import of goods.
11. Carriage Paid To (CPT)
Last but not least, CPT means that the seller bears all costs from the time the goods are delivered to the buyer’s destination. In this case, the seller is not responsible until the goods have been handed over to the expedition or the carriage.
Parties Involved in Export and Import
There are people that are involved while doing export and import activities. The parties involved are :
For parties category, first is a consignor. It is another term for the exporter / seller / shipper of goods.
Second is Consignee. This another term for the importer or buyer of goods.
3. Forwarder Company
Not only people, There is also a company involved too. This a company whose duties are to issue shipping documents such as BL / AWBL in addition to simultaneous EMKL / EMKU. Besides that, they also issue leasing of containers to shipping lines and delivery to ports of destination.
4. Notify Party
Usually, this is also called as a third party. Other than the consignee, this is the one who has knowledge of a shipment of goods.
Fifth is the Applicant. This is the party who opens the L/C (Letter of Credit) contract with the issuing bank. In this case, the applicant acts as the buyer (purchaser) or importer.
Sixth parties is the party that receives payment for opening a bank L/C by the applicant. In this case, a beneficiary is a seller or exporter.
7. Issuing Bank
Not only seller and buyer, it is necessary to have a party who takes care of the payment. One of them is Issuing Bank. Usually, This is located in the country of the importing party. Issung Bank twill issue and forward L/C or appoint an advisory bank in the exporting country.
8. Advising Bank
Besides issuing bank, there is also an advising bank. is a bank located in the exporting party’s country, and this bank will act as agent in bank-to-bank transactions with the issuing bank. In addition, the advising bank has the duty to continue and notify the beneficiary/exporter and also confirm the opening of LC.
9. Importer of Record (IoR)
Importer of Record is an official importer service that can help you with all your importing needs. IoR can help you with everything from tax exemption, to managing all licensing documents and certificates, to ensuring safe delivery to your destination.
Documents in Export and Import
Furthermore, while doing export and import in Indonesia and other countries, you need to provide documents. The documents you may need are :
1. API (Angka Pengenal Impor)
First, API stands for importer identification number, is one of the license you must have in Indonesia. The types of API are API-T (limited), API-U (general), and API-P (manufacturer).
2. Proforma Invoice
Second is a Proforma Invoice. This is an invoice that is preliminary before issuing the commercial invoice.
3. Commercial Invoice
After issuing Proforma Invoice, You will have Commercial Invoice. This is a list of the value/price of the goods listed in the packing list. Usually, it contains the value of the goods per item and the total value of the goods.
Normally, the Commercial Invoice, Packing List and bill of lading are an integral part of the export and import process. Or we can say that these three documents are 1 set of export/import documents.
4. Sales Contract
Fourth is a sales contract. This is a contract of sale and purchase between the exporter / seller and importer / buyer between countries.
5. PIB (Persetujuan Impor Barang)
Next is PIB. In english, PIB stands for declaration of import of goods. Completion of this PIB form is now done through online system by PPJK/Pengusaha Pengurusan Jasa Kepabeanan. Once PPJK approves PIB verification, they will issue a SPPB (Notification of Goods Release).
7. PEB (Persetujuan Ekspor Barang).
After PIB, There is also PEB. This stands for Notification of Export of Goods. As an exporter, we have to apply for a PEB by filling a form through the EDI system. If approved, an NPE (Export Notification Note) will be issued. The data required for filling PEB form is commercial invoice and packing list.
8. Bill Of Lading
Or B / L, is a letter / document issued by the shipping company / Freight Forwarder for each export consignment of goods. This bill of lading is issued on the date of departure of the vessel. Then later on, it is given to the consignee to collect the goods at the destination (import collection). Thus, The function of the bill of lading is not only to provide proof of collection of the goods at the destination, but it is also attached to the process of COO.
9. Air Way Bill / AWB
Next is AWB. It has the same functions and uses as Bill Of Lading. However, AWB is specifically for shipping goods by air freight.
10. Certificate of Origin (COO)
Next is Certificate of Origin. This is a certificate of origin for goods issued by DISPERINDAG (Ministry of Trade) to exporters. Usually, It is used to prove the authenticity of the goods from the country of origin listed in the Bill of Lading.
11. Phytosanitary Certificate
Besides COO, there is also a phytosanitary certificate. This is a certificate issued by the Quarantine Station for Animals and Plants. This certificate states that the goods to be shipped (exported) are clean, free from pests and insects and other disturbing things.
After that, there is COA. it stands for Certificate of Analysist. Usually, this certificate is issued by Sucofindo Agency or Geoservices or similar for the exporter. It serves as an analysis of the goods, starting from the specifications of the goods to the proof of performance of an item to be shipped.
13. Quarantine Letter
Then, There is Quarantine Letter. This is a letter for fishing quarantine, plantation, mining and so on.
14. LHP (Laporan Hasil Pemeriksaan)
Last but not least, this is the abbreviation for physical examination result report.
Customs Terms in Export and Import
Many importers and exporters are not familiar with terms in customs. Especially for those of you who want to trade to Indonesia. Here are some common customs terms in Indonesia below.
1. DJBC (Direktorat Jendra Bea dan Cukai)
Initially, DJBC in english stands for Directorate General of Customs and Excise. Thisis an official government agency that regulates customs and excise duties on goods imported and exported in Indonesia. To be successful in your trading activities, you must first familiarize yourself with this institution. Make sure that you always comply with the necessary requirements and also pay taxes.
2. Customs Clearance
Second, Customs clearance is the activity of handling shipments or goods for export and import requirements. Such as taxes, customs and related documents so that the cargo or goods can be distributed in a country.
3. NIK (Nomor Induk Kepabeanan)
Third is NIK. NIK or Customs Registration Number is a registration number / identity issued by the Director General of Customs (DJBC) to individuals and companies. This works as a form of permission to access anything related to customs (imported goods).
4. NPWP (Nomor Pokok Wajib Pajak)
Fourth is NPWP. It stands for Taxpayer Identification Number. This is a number assigned to a taxpayer as a means of tax administration for the taxpayer’s self-identification in the exercise of his rights and obligations.
5. SPJM (Surat Pemberitahuan Jalur Merah)
Next is SPJM, which stands for Red Lane Notification Letter. If the importer receives SPJM after submitting the PIB, it means that the imported goods must first be inspected by the customs officer (physical goods inspection) before the goods are released from the customs area (port).
6. SPJK (Surat Pemberitahuan Jalur Kuning)
Besides SPJM, there is also SPJK. SPJK stands for Yellow Lane Notification Letter. By having these, it is a sign that your products will go to yellow lane. Furthermore, it means that there are missing documents or other administrative requirements that need to be completed by the importer. In this case, Customs will not conduct a physical inspection of the goods, but documents will be reviewed before or after the SPPB is issued.
7. SPJH (Surat Pemberitahuan Jalur Hijau)
Then, SPJH stands for Green Lane Notification Letter. By having these, it is a sign that your products will go by green lane. Furthermore, it means your goods is free from Lartas.
8. SSPCP (Surat Setoran Pabean, Cukai dan Pajak)
The other letter is SSPCP. It is an abbreviation for customs duty, excise and tax payment form. Usually, SSPCP is a form used by taxpayers (WP) or tax subjects to file duties and taxes related to import activities.
9. SRP (Surat Registrasi Pabean)
SRP is an abbreviation for customs registration letter which is very useful for importers as it fulfills the requirements of DJBC.
10. PNBP (Penerimaan Negara Bukan Pajak)
PNBP is a levy paid by a natural or legal person through the receipt of direct or indirect benefits for services or the use of resources and rights received by the state. This stands for non-tax state revenue.
11. Notul (Nota Pembetulan)
Afterward, Notul is short for Correction Notes. This is a government fine when you cannot issue the permit of goods. Incidentally, due to bleaching or violations found by customs, whether through invalid or forged documents, undervalued or reduced invoice value so that the import duty is too high.
12. HS code
At last for customs category, HS Code stands for harmonized system code. This is a term used to identify an item. In HS Code, there are numbers which help us to identify the product in detail. Besides that, it also provides accurate data related to import duties, VAT, income tax, and other tax calculations.
Payments Terms in Export and Import
In order to seal the deal, any trading activities needs final payment. Therefore, there are several terms and their alternatives of method you can choose. Which are:
Initially, consignment is a payment system where the cost of shipping goods is paid only after the goods have been sold.
2. Payment Terms
Next terms in payment categories is payment terms are the payment terms in buying and selling trade. Whether with a bank transfer, TT payment, Western Union, Paypal or with a Bank Letter of Credit.
3. Letter of Credit (L/C)
One of the payment methods is L/C. It is a very secure payment system that is bank to bank only. In short, a transaction that is specially handled and monitored by the bank.
4. Advance Payment
Next payment method is advance payment. This is a prepayment where you pay in cash.
5. T.T Transfer
Besides the methods above, there is T.T transfer. This is a payment by telegraphic transfer or bank transfer.
6. Freight Prepaid
Aside from T.T Transfer, freight prepaid is a payment system where the cost of shipping goods must have been paid at the port of loading.
7. Freight Collect
Above all, Freight Collect is a payment system where the cost of shipping goods is paid at the port of discharge.
In conclusion, knowing these export and import terms is going to be beneficial in the future. Especially if you want to take your business seriously. To help you further, do not hesitate to contact us as we are professionals in handling export – import activities.