On 2 June 2017, the government of the Republic of Indonesia promulgated Government Regulation no. 20 of 2017 (“GR No. 20/2017“) on Control of Import or Export of Goods Suspected of Originating or Derived from Violations of Intellectual Property Rights. GR No. 20/2017 is the implementing government regulation of Law Number 10 of 1995 concerning Customs as amended by Law Number 17 of 2006.

Scope

The scope of the regulation in this Government Regulation includes controlling the import or export of goods suspected to be or derived from the infringement of intellectual property rights (“IPR”). IPR is the exclusive rights granted by the state under the laws and regulations, namely trademarks, geographical indications, copyright and related rights, patents, industrial designs, layout designs of circuits, and crop varieties.

Control of import or export of goods suspected to be or derived from violation of IPR by Customs and Excise Officers is conducted by:

– Preventie measures based on the authority of the Customs and Excise officer; or

– Suspension under orders from the Chief Justice

Prevention of goods means an administrative action for postponing the release, loading, transport of imported or exported goods. Prevention shall be made on the alleged infringement of intellectual property rights in the form of trademark or copyright that has been recorded in the recording system of the Directorate General of Customs and Excise. The suspension shall be executed by written order of the court chairman to the Customs and Excise Officer. The Court means Commercial Court at District Court in the jurisdiction of local customs area.

Suspension cannot be executed on goods that have been out of the Customs Area, goods designated as State’s controlled goods, or goods allegedly violating the provisions of customs crime.

IPR Recording

For data collection on the recording system of the Directorate General of Customs and Excise, the owner or rights holder of the trademark or copyright, which is a business entity in Indonesia, may submit a written application to the Customs and Excise Officer by enclosing:

1. Proof of ownership of rights;
2. Data on product’s genuineness characteristics;
3. Data regarding the characteristics or specifications of the copyrighted work;
4. Statement of liability from the owner or rights holder of any consequences arising from the recording.

Prevention

If the Customs and Excise Officer finds imported or exported goods suspected to be or derived from a breach of a mark or copyright, the Customs and Excise Officer should notify the information to the owner or right-holders on the basis of sufficient evidence. Such evidence is obtained by the Customs and Excise Officer during customs inspection or intelligence analysis based on the IPR recording system information.

To the given notice, the owner or rights holder must provide confirmation to file a request of suspension order within a period of 2 (two) days after the date of notification.

Furthermore, within a maximum period of 4 working days from the date of confirmation, the owner or rights holder must:

• prepare the administrative requirements of filing a request of suspension order to the Chief Justice;
• submit operational cost guarantee to Customs Official at Rp 100.000.000,00 in form of bank guarantee or guarantee from insurance company

In order to fulfill the requirements of the suspension request through an application to the chief justice, the Customs and Excise Officer may provide a summary of imported or exported goods presumed to be or derived from infringement of IPR.

Suspension Request and Order

The Owners or rights holders or their representative may file a request for suspension on imported or exported goods allegedly constituting or deriving from the IPR infringement by enclosing application for a physical inspection of imported or exported goods permit requested for suspension, based on:

• notification of Customs and Excise Officer; or
• Owner or Right holder initiative

A suspension request is filed by the owner or rights holder through an application to the chief justice with a jurisdiction covering the customs area where the import or export activity contained goods suspected to be or derived from infringement of IPR by including:

• sufficient evidence of IPR infringement;
• proof of ownership of IPR;
• details and clear descriptions of imported or exported goods requested for suspension of their expenses; and

The Court decides to grant or reject the application by a determination within a maximum period of 2 working days after the date of registration of application. This determination shall be submitted to the Customs and Excise Officer no later than 1 working day after being stipulated.

In the event that an application is submitted on the initiative of the owner or rights holder, the owner or rights holder must submit an operational cost guarantee to the Customs and Excise Officer of Rp 100,000,000.00 in the form of bank guarantee or guarantee from the insurer no later than 2 working days from the date on which the suspension order is received by the Customs and Excise Officer.

Implementation of Enforcement

Upon obtaining the determination of the Court, the Customs and Excise Officer shall notify in writing of this determination to:

• importer, exporter or owner of the goods;
• owner or rights holder; and
• Directorate General of Intellectual Property

The Customs and Excise Officer executes the suspension from the date on which the suspension order is received.

The owners or rights holders then apply for the schedule of physical inspection of imported goods to Customs Officials within a period of no later than 2 working days from the date of stipulation. Physical examination shall be conducted on the basis specified by the Customs and Excise Officer and performed by the owner or rights holder by:

• Customs and Excise Officer;
• Representative of the court;
• Representative from the Directorate General of Intellectual Property; and
• Importer / exporter / owner of the goods or their representative.

Inspection is carried out even if the importer/exporter/owner of the goods or his/her representative is not present.

The Customs and Excise Officer executes the suspension within 10 working days of the receipt of the suspension letter received. The owners or rights holders may apply by including an extension of the guarantee and a guarantee of a one-time extension of the suspension extension with a maximum of 10 working days to the chief justice.

Suspension Termination

Termination of suspension shall be made by Customs and Excise Officer in the case of:

• the termination of the suspension;
• expiration of the suspension extension;
• there is an order stipulating an end to suspension from the court (under certain circumstances may be filed by the importer, exporter, or owner of the goods by depositing a guarantee); or
• there is legal action or other action on the alleged infringement of IPR.

With the termination of suspension, the settlement of suspended goods in accordance with the provisions of legislation and operational cost guarantee is liquefied to cover any costs incurred, the drawbacks are levied on the Owner or Right holder and its excess will be returned.

Suspension Exception

The suspension terms shall not apply to:

1. Passenger luggage;
2. Crew of carrier;
3. Border crossers; or
4. Items by mail or by delivery services,

which is not intended for commercial purposes.

In addition, it is also excluded for imported goods of forward transport or carry on with destination outside the customs area suspected of violation of IPR. Control of imported or forward-up imported goods shall continue to be made by the Customs and Excise Officer by sending a notification to the customs official in the destination country of subsequent transportation.

Michelle Suliyanto