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Indonesia Finalizes Scrap Import Regulations

Indonesia Finalizes Scrap Import Regulations
ISRI has reported that an initial analysis of the ruling describes “a policy so restrictive as to potentially halt trade.”

The government of Indonesia has finalized import regulations for all scrap commodity imports, according to the Institute of Scrap Recycling Industries (ISRI). The rule is available only in the local language, but ISRI reports its contacts have provided an initial analysis that “describes a policy that is so restrictive as to potentially halt trade.”

The policy is counter to what ISRI was told would be policy during its visit to Indonesia in September

ISRI explained that it expects to receive an English translation soon, but its contacts inform of the following requirements:

  • Only direct shipments will be allowed, defined as direct from the United States to Indonesia (i.e., no transshipment via Singapore, for example).
  • The exporter must be listed on documentation so that the exporter can occasionally be verified. And the exporter can only send from its own country. 
  • The government may be considering prohibiting shipments from brokers and traders—that material can be sourced/exported only from processors.
  • The impurity threshold may still be at zero.

The last point contradicts what ISRI learned during a visit to Indonesia in September: that the impurities threshold would be 2 percent at the outset and transition to 0.5 percent in two years.

Additionally, the regulation appears to already be in effect, but KSO-Sucofindo—the government agency responsible for overseeing its implementation, including pre-shipment inspections—is unprepared. Thus, the agency has ordered a temporary moratorium on imports, and the pre-shipment inspection agencies, including Cotecna in the United States, has informed its customers that “all shipments with inspection date after Nov. 22 need to be stopped … That means last inspection date will be Nov. 22.” 

ISRI said it spoke to contacts at Cotecna, “but they have very little information about the regulation, implementation or when they will resume inspections. Our contacts within the Indonesian Government have not responded to several inquiries. We have also asked U.S. Government officials in Washington and Jakarta to help us obtain information as well as to help communicate our concerns with the new rules. We will provide additional updates as they come in,” added ISRI.

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