22 April 2020

The Revocation of Provisions on Electronic Cigarette Import

The Ministry of Trade issued Regulation Number 05 of 2020, revoking a previous regulation on electronic cigarettes import.

| Margaret Rose

Recently the Ministry of Trade of the Republic of Indonesia issued Regulation Number 05 of 2020 (“Regulation 05/2020”) concerning the Revocation of the Minister of Trade Regulation Number 86 of 2017 regarding Provisions on Electronic Cigarettes Import (“Regulation 86/2017”). (“Electronic” cigarettes also sometimes referred to as “Electric” cigarettes in English, but both mean the same.)   By such, all provisions set out in Regulation 86/2017 have been annulled. 

The issuance of Regulation 05/2020 is indicated as a follow-up to the Government’s efforts to restrict or even prohibit the distribution and circulation of tobacco products, specifically contained in electronic cigarettes. As we know, most of the electronic cigarettes circulating in the Indonesian market are imported. The Government is now preparing a revision to its previous regulation, Government Regulation Number 109 of 2012 (“Regulation 109/2012”) which, among other matters, regulates the distribution of electronic cigarettes.

The fact that electronic cigarettes are harmful to health and may cause various health issues, has encouraged the Ministry of Health, along with the Food and Drug Control Agency (“Badan Pengawas Obat dan Makanan/BPOM”), to submit a proposal to the Government in order to prohibit the consumption of electronic cigarettes. There were several scientific facts discovered by BPOM.  The fact that raw materials used in electronic cigarettes contain hazardous chemical compoundd were the basis of such proposal.  So far, the Government has only imposed a  high tax as an effort to control tobacco consumption.  

As of the current time, considering that Regulation 86/2017 has been revoked, trade and distribution of electronic cigarettes fall under the following regulations :

  1. Minister of Finance Regulation Number 146/PMK.010/2017 regarding Excise on Tobacco Products;
  2. Law Number 39 of 2007 regarding Excise;
  3. Minister of Finance Regulation Number 66/PMK.04/2018, Number 67/PMK.04/2018, and Number 68/PMK.04/2018.

These restrictions, which may lead to prohibition of electronic cigarette  consumption altogether, as might be expected, has raised objections from business actors in the field. They are all concerned that the effect of such prohibition may lead to their bankruptcy. However, it may take some time  for the Government to review and revise the regulation, considering that it involves many parties of interest in relation to the matter.  

It is also  not yet certain whether the Government will issue a new regulation,  adding additional provisions concering imports of electronic cigarettes, or if it really will spell the end of electronic cigarette import activity within the Republic of Indonesia.  Only time will tell.

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