Understanding Importer, Terms, and Types in Trade

Meaning of Importer – Reader must have heard the word import, right? Import is the activity of bringing in goods and services from abroad. The meaning of importer starts from this import activity, because countries in the world have different resources that are influenced by geographical factors and so on.

So, in order to fulfill goods or services in a country, the country carries out import activities through importers. If Reader already understands the meaning of import, now is the time for Reader to know more about what an importer is. See the following explanation.

Definition of Importer

According to Law No. 17 of 2006, import is defined as a form of activity carried out by entering goods into the customs area or in this case the territory of the country of Indonesia.

Meanwhile, an importer is a legal entity, individual, or company that brings a trade product from abroad to then be sold to the domestic market.

According to the Financial Services Authority, importer is defined as a person or entity that carries out import activities. While the Indonesian Language Dictionary (KBBI) defines an importer as a person or trade association (company) that imports goods from abroad, the importer and the company are designated by the government as importers.

As for goods imported by importers, they can be used for production or other consumption purposes. If concluded, then the importer is a party that carries out import activities as well as bringing goods from abroad into the country.

Import activities themselves, of course, will have a positive or negative impact on the economy in Indonesia. One of the positive impacts is the increasing development of importer services in Indonesia, then it will also help the process of goods coming in from abroad, so that the goods that come in will be more smooth and practical.

Rules and Conditions of Becoming an Importer

As with import and export activities, importers are also clearly regulated by the government, through Law No. 7 of 2015. In the Law, it is explained that the importer has full responsibility for the goods being imported.

If the importer commits a violation or is not responsible for the goods they import, then the importer will be subject to administrative sanctions, namely the revocation of permits, recognition, approvals and stipulations in the field of trade.

When the importer carries out import activities, the importer must comply with the rules that have been implemented by Customs and Excise regarding any goods that are allowed and permitted to enter Indonesia.

Some of the items that are prohibited from entering Indonesia are living creatures, illicit drugs, human and animal trafficking, dangerous firearms and objects that contain pornography.

Meanwhile, there are several conditions that must be met by companies and individuals who want to become importers. Here are some conditions.

  1. Individuals who wish to become importers are required to have a legal entity, accompanied by complete documents consisting of company deed, SIUP, NPWP, certificate of company domicile, company registration mark, as well as basic documents required by other companies.
  2. Institutions or companies applying as importers must have an API document accompanied by an importer registration number that has been officially obtained from the Department of Trade and the Ministry of Trade.
  3. Importers must have a NIK or Customs Master Number as well as a registration number that has been obtained after the prospective importer registers with Customs.
  4. Having and preparing API documents for importers in general.
  5. Own and prepare API documents used for importers and manufacturers who already own factories.

In addition to the five conditions above, to become an importer, a company or institution must have an import business license. If not, then the goods imported by the importer will not pass Customs. The license applies to all types of imports, both small-scale and large-scale imports.

According to the latest regulations from the Ministry of Trade in 2015, there are two types of importer licenses that must be used, namely API-U or General API and API P or Producer API.

In addition to the conditions and regulations, importers must know which commodities are allowed to enter Indonesia. According to the purpose and use, the following is the division of commodities.

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1. Raw materials

Due to the nature of dependence on international trade and domestic industry, raw materials are one of the commodities allowed by the government. In addition to the purchase of basic raw materials and companion materials originating from within the country, the fulfillment of these goods can also be done through imports.

In Indonesia, importers import many kinds of raw materials needed by the industry. The raw materials of the industry can be in the form of basic raw materials as well as companion materials.

For example, such as the need for components for motor vehicles, in addition to local content originating from domestic products and some of the products are still imported. In order to increase competitiveness, the government also provides import facilities, and import duties are borne by the country.

2. Consumables

The second commodity is a consumer item that is included in the most commodities that importers do now. Consumer goods are goods used to meet daily household needs, such as milk, rice, meat, canned food, butter, cosmetics, medicines and electronic goods.

3. Children’s toys

In addition to consumer goods and raw materials, children’s toys are the most imported commodity by importers. Importing children’s toys is done to protect children’s safety because there are more and more children’s toys with unsafe materials that can harm children.

4. Petroleum and minerals are currently restricted export commodities

By limiting the export of petroleum and these minerals, the government hopes that there will be added value to this commodity. An example of such restrictions, for example, is applying the obligation to build factories and smelters.

Types of Importers

The import of goods is generally done when a country is unable to produce the commodity itself. In some cases, imports are carried out when the stock produced in the country is feared to be insufficient or insufficient to meet the needs of the population.

For example, in the case of rice imports by Indonesia. Although Indonesia is able to produce its own rice, Indonesia still imports rice in order to maintain stocks and stabilize rice prices on a national scale.

Importers themselves are divided into several types known in the trade industry. Here are some types of importers.

1. General Importer

A general importer is a specialized company engaged in activities to bring merchandise from abroad. Companies that are included in general importers are usually limited liability companies.

2. Importer Limited

A limited importer or commonly referred to as IT is a company or legal entity that has obtained permission from the authorities to be able to carry out import activities for certain types of imported goods. There are also some types of merchandise that can only be imported by IT or limited importers.

Merchandise that can be imported by importer companies is limited, after having arranged permission and trade in Indonesia by the Minister of Trade. The rules and permits, including rules about what goods can be imported as well as how to handle the trade process in the country.

With limited imports, it is possible for companies to be able to compete in a healthy way. That way, there will be no party who feels harmed by the import activity.

Companies that are allowed to carry out limited imports are companies that have a permit with a license in the form of an API T or Limited Importer Identification Number and the license is issued by the Investment Coordinating Body or BKPM.

3. Sole Agent Importer

The third type of importer is the sole agent importer, which is a foreign company that wants to trade in Indonesia. This third type of importer, will show the representative in Indonesia and the representative has the task of being a special agent to import production carried out by the agent to the domestic market.

4. Import Merchant

As explained earlier, the importation of specific goods requires a separate permit. The party that has the right to import the specific goods is an import merchant who has permission in the form of an official license from the government in the form of an Import Acknowledgment Identification Mark or TAPPI. In addition, items that are outside the list of official permits from the government are prohibited from entering Indonesia.

5. Approved Traders

The fifth type of importer is approved trades. Some commodities and certain products are only allowed to be imported by companies that have been designated or given privileges by the government. Companies that have these privileges are called approved traders . Usually, the goods imported by approved traders are commodity goods that have a specific purpose.

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For Reader who are interested in becoming an importer, you can learn more about the import process by reading the book written by Indarniati and Ismiyati entitled “Import Top Secret: Cara Impor Resmi Tanpa Rebet”.

In this book, the author presents a variety of information related to import activities and how to become an importer that is easy and official. Because according to the author, large-scale importation of goods certainly requires the intervention of Customs in two countries, both the sending and receiving countries. So that there are laws that must be understood and obeyed.

Difference between Importer, Exporter, and Forwarder

After knowing the importer’s explanation, Reader needs to know the explanation and differences between importers, exporters and forwarders. Here is the explanation.

An importer is someone who carries out the activity of importing goods, from abroad and importing goods into Indonesia. Whereas an exporter is the opposite of an importer. An exporter is a person or business entity that sends goods from within the country and sends them abroad.

The difference between importers and exporters, of course, can be clearly seen when looking at the goals of different importers and exporters. However, importers, exporters and freight forwarders are different things, Reader.

Freight forwarder, is a body or company engaged in the field of transportation and delivery of goods. Well, after knowing the meaning, importers, exporters and freight forwarders are certainly different, aren’t they? In conclusion, an expeditor is an expedition that helps the import and export process carried out by importers and exporters.

How Importers Make Payments?

As an importer, Reader must know the tools and methods of payment in import activities. Here is the explanation.

Payment instruments and methods of payment for import activities, are payment instruments that can be accepted internationally, such payment instruments can be in the form of foreign currency, gold bars, securities or checks. Foreign currencies that can be used for export and import payments can be in the form of dollars, yen, euros, and pounds sterling.

In the payment of exports and imports using foreign currency, the importer and exporter need to compare the value of a country’s currency with the foreign exchange rate.

After calculating the foreign exchange rate, here are some payment methods abroad that importers need to know.

1. Payment in advance

Payment in advance or also called advance payment , is a payment system carried out by the importer by paying in advance or in advance, before the goods are sent by the exporter.

The currency used for payment also depends on the agreement and can use the currency of the exporting country or the currency of the importing country.

2. Later payment

The second payment method is open account , this second payment method is a payment system that is done after the importer receives the goods from the exporter. The payment system is carried out, if there is trust between the exporter and the importer and there is certainty of the goods and documents of the goods to be received by the importer, as well as legal certainty regarding the transaction as well as the transfer of payment/

3. Consignment

The third payment is consignment, which is a way of sending export goods that have the nature of deposit to be marketed by the exporter through a certain price agreement. New payment is made, when the party entrusted with the goods has successfully sold the goods.

This consignment payment method has a weakness, namely the owner of the goods cannot determine the time from receipt and payment because the owner of the goods must wait for the goods to be sold by the party entrusted.

4. Payment via money order

A promissory note or bank promissory note or bill of exchange is a document whose content contains an acknowledgment from the bank or promissory note, which is used to pay the amount of money that has been written on the promissory note to certain parties or parties who have brought the promissory note.

In that way, the importer must pay for the goods they have purchased by depositing an amount of money at the bank designated by the exporter who issued the promissory note.

These payment methods can be done by exporters and importers in accordance with the agreement of both parties.

Thus the explanation of the meaning of importer as well as the conditions or rules to become an importer in Indonesia.