Illustrative worked example · extract
Deal Readiness Check: cast steel valves, Korea to Indonesia
This worked example demonstrates the method and report format. A scoped check covers one proposed distributor appointment and one product family, up to three related models. Available records, selected commercial terms, review responsibilities and outstanding questions are agreed in the proposal.
- Exporter
- Hanbit Flow Co., Ltd. (illustrative), Changwon, 140 staff. Cast steel gate valves, DN50 to DN300
- Proposed importer
- PT Sinar Contoh Teknik (illustrative), Surabaya. Asks for exclusive distribution
- First order
- 120 valves, about USD 186,000 FOB Busan
1. Priority issues and evidence coverage
- DecisionHOLD
- IssueLicence route
- Next stepObtain records
HOLD. Do not sign the proposed agreement yet. Confirm the import arrangement, the approvals that apply and the commercial viability first. Do not stop the Indonesian project either. On the texts we read, the valves can be imported if the surveyor step is done and each model is classified correctly. One licence problem must be solved before money moves, and the resale price is not yet shown to work.
Three findings to investigate
- The import route does not match the proposed arrangement. The illustrative records show a business number (NIB) with API-P status, which is the producer import category. The appointment asks this company to import finished goods for resale. The applicable import route and any relevant exceptions must be confirmed before appointment. We do not say the arrangement is prohibited; the question is which route it would use, and that answer belongs to an Indonesian specialist.
- The listed valve lines need a surveyor report. Permendag 22/2025 requires a surveyor report (LS) for import of the valve lines it lists. Some API-P industrial-use imports are exempt, and which line each model falls in is still open, so the surveyor step is confirmed model by model.
- The trade-agreement saving depends on paperwork. With a correct certificate of origin (Form KI-CEPA) and the origin rule met for each model, the first order saves about USD 9,600 in duty at the working rates shown, and about USD 11,400 in total cash outlay.
Evidence to obtain before appointment: the importer shows an API-U or buys through a named API-U co-importer; a named surveyor confirms fee and time; each model has a reviewed 8-digit tariff line; the exporter confirms the origin rule is met; payment terms are set; and the landed cost is compared with the importer's resale prices.
2. Rules that apply today (extract)
Each line shows its source and the date we read it. The proposal defines the questions and rule lines for an Indonesian licensed customs broker or law firm to review. No payment is taken until that reviewer is named. This illustration has not received that specialist review.
| Requirement | Applies? | Source (read 30 Oct 2026) |
|---|
| Surveyor report (LS) | Yes, listed lines | Permendag 22/2025, Annex I, Section IX, serials 806 to 814. In force 29 Aug 2025. Exemptions apply to some API-P industrial-use imports |
| Import approval (PI) | Not marked | Same table. The reviewer confirms no special route applies |
| Importer licence type | Risk | Permendag 16/2025, Article 7(1) to (4), as amended by Permendag 37/2025 and Permendag 18/2026 (second amendment, June 2026). API-U is the normal route for resale. Text read 30 Oct 2026; amendment register checked 31 Oct 2026 |
| Income tax on import (PPh 22) | 7.5% | PMK 51/2025, Annex B, Section B: lines 8481.80.73, .74 and .77, with or without API. Base is the import value |
| Certificate of origin for the trade-agreement rate | To claim it | IK-CEPA (in force 1 Jan 2023). Form KI-CEPA, issued by Korea Customs Service or the Korea Chamber of Commerce and Industry |
| Mandatory national standard (SNI) | Not identified | Industry Ministry SNI lists, read 30 Oct 2026. Confirm per model and end use. End customers may still ask for API, ISO or EN certificates |
3. Landed cost (extract)
One 20-foot container, Busan to a warehouse near Surabaya. Freight, exchange rate and port costs are assumptions to be replaced by quotes. Duty rates shown are working rates for the illustration, confirmed line by line in a real check; the preferential rate applies only if the origin rule is met model by model. Figures in USD.
| Line | Correct certificate (duty 0%) | Certificate rejected (duty 5%) |
|---|
| FOB Busan | 186,000 | 186,000 |
| Freight and insurance | 6,760 | 6,760 |
| Import duty | 0 | 9,638 |
| Port, clearance, surveyor and inland freight | 3,049 | 3,049 |
| Landed cost before VAT and PPh 22 | 195,809 | 205,447 |
| VAT (11% effective) and PPh 22 (7.5%), recovery depends on importer status | 35,661 | 37,444 |
| Total cash outlay for the shipment | 231,470 | 242,891 |
| Landed cost per valve, before VAT and PPh 22 | 1,632 | 1,712 |
A full check also runs a "freight up 60%" and a "rupiah weaker" scenario. A weaker rupiah barely changes the cost in USD but raises the importer's cost in rupiah, which matters for its resale price and for paying on time.
4. Options
A. Proceed through an API-U co-importer
A licensed API-U company imports and invoices; the proposed distributor sells. Start with a short, non-exclusive agreement.
B. Ask the distributor for the licence position in writing
One question, one answer. If the answer is satisfactory, the appointment can be reconsidered with the answer on file.
C. Stop
Do not enter Indonesia now. Keep the report for a later decision.
Our advice: run A and B side by side. Ask the importer for a written answer on API-U within 10 working days. Do not ship until the tariff line, the surveyor step and the certificate of origin are in order.
Illustrative worked example. Company details demonstrate the method. Rules change; a real check states the date each rule was read.
