TRADE BUSINESS INSTITUTIONS
(Decree of the Minister of Industry and Trade No. 23/MPP/Kep/1/1998 dated January 21, 1998
THE MINISTER OF INDSUTRY AND TRADE Considering:
a. that in the framework of orderliness in commerce and the smooth running of the distribution of goods and services as well as the protection of consumers at home, it is necessary to have uniform definition and scopes of activities of trade institutions in the national trade and distribution system.
b. That to this end, it is necessary to issue a decree of the Minister of Industry and Trade.
In view of:
1. The Trade Ordinance of 1934 (Statute Book of 1938 No.86 as already amended and supplemented);
2. Law No.11/1965 on the stipulation of government regulation in lieu of Law No. 5/1962 on the amendment of Law No. 5/1962 on the amendment of Law No. 2 Prp/1960 on warehousing (Statute Book No. 31/1962) to become Law; (Statute Book No. 54/1965, Supplement to Statute Book No. 2759);
3. Law No. 1/1967 on foreign invesment (Statute Book No. 1/1967m Supplement to Statute Book No. 2818), as already amended by Law No. 11/1970 (Statute Book No. 47/1970, Supplement Statute Book No.2943);
4. Law No. 6/1968 on domestic invesment (Statute Book No. 33/1968, Supplement to Statute Book No. 2853) as already amended by Law No. 12/1970 (Statute Book No. 47/1970, Supplement to Statute Book No. 2944); 5. Law No. 9/1995 on small-scale businesses (Statute Book No. 74/1995,
Supplement to Statute Book No. 3611);
6. Government Regulation No. 1/1957 on the distribution of companies (Statute Book No. 7/1957, Supplement to Statute Book No. 1144);
Regulation No. 35/1996 and the latest by Government Regulation No. 15/1998 (Statute Book No. 25/1998, Supplement to Statute Book No. 3734);
8. Government Regulation No. 2/1996 on the activities of companies established in the framework of foreign capital invesment in the export and import areas (Statute Book No. 26/1998, Supplement to Statute Book No. 3735);
9. Government Regulation No. 16/1997 on franchising (Statute Book No. 49/1997, Supplement to Statute Book No. 3689);
10. Government Regulation No. 44/1997 on partnership ( Statute Book No. 91/1997, Supplement to Statute Book No. 3718);
11. Presidential Decree No. 96/M/1993 on the establishment of of Development Cabinet VI, as already amended by Presidential Decree No. 388/M/1995; 12. Presidential Decree No. 2/1996 on amendment to Presidential Decree No.
15/1984 on the organizational structure of ministries as already amended twenty-five times, the latest by Presidential Decree No. 61/1995;
13. Presidential Instruction No. 8/1979 on the program of loan assistance for the construction, development and renovation of shopping/trade centers and/or shopping compounds;
14. Decree of the Minister of Industry and Trade and the Home Minister No. 145/MPP/Kep/5/1997 and No. 57/1997 on the re-arrangement and fostering of markets and shopping compounds;
15. Decree of the Minister of Industry and Trade No. 402/MPP/Kep/11/1997 on the provision on business licensing of representatives of foreign trading companies;
16. Decree of the Minister of Industry and Trade No. 408/MPP/Kep/10/1997 on the provisions on and the procedure for the granting of trade business registration (TDUP) and trade business lincences (SIUP).
D E CI D E S : To stipulate:
CHAPTER 1
GENERAL PROVISIONS Article 1
Referred to in this decree as:
1. Trade shall be the activity of selling and buying goods and/or services conducted continously with a view to transferring the right over the goods and/or services against the provision of compensation.
2. A trader shall be an individual or a business company undertaking commercial/trade activities continously with view to making profits;
3. Trade institutions shall be institutions/agencies which may take form of individuals or business companies serving as exporters, importers, wholaselers, retailers, or other similar trade institutions, that in the marketing system of goods and/ or sevices conduct trade activities by means of transferring goods and/or services both directly and indirectly from the producers up to the consumers;
4. Exporters shall be individuals or business companies conducting trade by means of taking goods or services outside from inside the Indonesian customs territory with fulfillment of the prevailing laws.
5. Importers shall be individuals or business companies conducting trade by means of taking goods or services from outside into the Indonesian customs territory with fulfillment of the prevailing laws;
6. Wholesalers shall be individuals or business companies acting under their own names and or on behalf of other parties appointing them to carry out activities by means of purchasing, storing and selling goods in big lots indirectly to final consumers;
7. Retailers shall be individuals or business companies whose main activities shall be conducting sales to final consumers in small lots;
9. Main distributors shall be individuals or business companies acting under their own names and appointed by factories or suppliers to conduct purchases, storing, sales and marketing of goods in big lots indirectly to final consumers with respect to goods owned/controlled by other parties appointing them;
10. Wholesale distributors shall be individuals or business companies purchasing in big lots various goods from various parties and selling the said goods in big lots to sub-distributors and/or retailers;
11. Sub-distributors shall be individuals or business companies appointed by main distributors or wholesale distributors acting under their own names in order to conduct the sales of goods in big lots to retailers;
12. Main suppliers shall be individuals or business companies that, acting under their own names, regularly fulfill the needs of other parties by providing them with various goods in big lots while the said other parties shall purchase the goods in order to sell them again or use them in their business activities;
13. Main dealers shall be individuals or business companies appointed to conduct trading activities in big lots of goods of one particular trademark owned/controlled by the trademark holder or a trademark holding sole distributor;
14. A trademark holding sole agent (ATPM) including a licence holding agent, shall be an individual or a business company appointed for and on behalf of a factory owning a particular trademark to conduct sales in big lots of the goods made by the said factory;
15. An agent shall be and individual or a business company acting as an intermediary for and on behalf of a party appointing him/it to conduct purchases, sales/marketing without physically transferring the goods;
16. A manufacturer’s agent shall be an agent conducting sales activities on behalf of and in the interest of the factory appointing it without physically transferring the goods;
18. purchasing agent shall be an agent conducting purchases on behalf of and in the interest of another party appointing it without physically transferring the goods;
19. Trademark holding sales agent (APPM) shall be an agent conducting sales on behalf of and in the interest of a trademark holding sole agent (ATPM) appointing it;
20. A supplier shall be an individual or a business company acting under his/its own name and regularly fulfilling the needs of other parties by providing them with various goods in small lots which the other parties shall purchase in order to resell them or use them in their business activities;
21. A retailing dealer shall be an individual or a business company appointed by a main dealer to conduct trading activities by means of purchasing and reselling goods of one particular trademark in small lots;
22. A non-store retailer shall be an individual or a business company conducting door-to-door sales, mail orders and sales through automatic, machines, telephones, the lnternet and the like without using shop facilities; 23. A hawker shall be an individual hawking goods using a vehicle, a cart, a
handcart, a bike and the like;
24. A roadside seller shall bean individual selling goods using parts of a road/sidewalks and public places and other places not of his own;
25. Street vendors shall be individuals who walk when offering and selling goods;
26. Stalls/depots/kiosks/market kiosks shall be individuals selling various daily necessities at a particular site:
27. A repair service shall be the repair service business run by an individual for the repair of such articles as watches. shoes. handbags, television sets, radio sets, computers and so forth and the nature of this business shall be serving consumers from areas around the place where this business is run while the place and the tools used are simple;
29. Company headquarters shall be a company which is assigned by the head office to provide services to branch offices or networks of the said head office;
30. A company branch office shall be a company which is a unit or part of the head office and which may be domiciled in a different location and may be independent to implement some of the tasks of the head office;
31. A company representative office shall be a company managed by an individual appointed to undertake market promotions and researches, representing the interests of the company appointing it;
32. A store shall be a place or a building that an individual, a company or a cooperative shall use to conduct direct sales to consumers;
33. A special store shall be a store selling only 1 (one) kind/type of goods; 34. A department store shall be a large-scale store conducting the sales of
various goods;
35. An independent store shall be a small-scale store owned/controlled by someone, who acts as the manhg and used for the sales of various goods; 36. A corporate chain store shall be a number of stores spread in various places
and owned/controlled by a number of people/individuals, companies or cooperatives for the sales of goods of the same kinds and distribution method/structure;
37. A self-service store shall be a store conducting the sales of goods without any help services;
38. A single line store shall be a store selling only 1 (one) group of similar goods;
39. A mall/super mall/plaza shall be a place or a building (store) on a large-scale for trade, recreational, restaurant and other businesses designated for groups, individuals, companies or cooperatives for the sales of goods and/or services.,
service method and advanced technology, among others, through self-service;
41. Markets shall be places where sellers and buyers meet for transactions resulting from a process of selling and buying and which, in terms of the service quality class. may be categorized as traditional and modern markets, and in terms of the distribution nature. as retail and wholesale markets. 42. Modern markets shall be markets which are constructed by the government.
private circles and cooperatives and which, in terms of structure, may take the form of malls, supermarkets, department stores and shopping centers, which are managed in a modern way and which in their services prioritize comfort in shopping while the management is in the hands of one party, the capital is relatively strong and labels of fixed prices are used;
43. Traditional markets shall be markets constructed and managed by the government, private circles and cooperatives or through public self-help with business places being in the form of shops, kiosks, market stalls and tents, owned/managed by small-and-medium-scale traders and cooperatives, with the businesses being run on a small-scale and with small capital, involving a selling and buying process through bargaining;
44. A wholesale market shall a market where trading businesses of big lots are conducted;
45. A retail market shall be a market where trading businesses of small lots are conducted;
46. Supermarkets shall be markets whose business activities involve the selling of daily necessities directly to consumers on a self-service basis;
47. A mail order shall be a means or method of selling goods and/or services indirectly through media (the television, the radio, the lnternet, newspapers, magazines and the like);
49. Multi-level marketing shall be a means or method of selling on a multi-level basis to consumers through a marketing network developed by individuals or business companies introducing certain goods and/or services to a number of other individuals or business companies consecutively with the latter working on the basis of a commission or a proper membership contribution fee;
50. Door-to-door sales shall be a means or method of selling goods and/or services from one place/house to another place/house.
CHAPTER II CATEGORIZATION
Article 2
(1) included as wholesalers shall be main distributors, wholesale distributors, sub-distributors, main suppliers, main dealers and trademark holding sole agents.
(2) The wholesalers as meant in sub-article (1) must fulfil] the following provisions:
a) controlling adequate warehousing compatible with the needs arising from the goods traded;
b) having a guarantee for sufficient transportation means;
c) applying modern management in the management of their businesses. Article 3
(1) Included as retailers shall be manufacturers agents and sales agents, purchasing agents, trademark holding sales agents, suppliers, retail dealers and non-store retailers.
Retailers as meant in sub-article (1) shall be distinguished into small-scale retailers and large-scale retailers.
1) having a working capital, excluding land and a building where the business is run, amounting to not more than Rp 200,000,000.oo (two hundred million rupiahs);
2) employing only a few people or the owner himself and his family doing the business by themselves;
b) Large-scale retailers must fulfil] the following provisions:
1) having a working capital, excluding land and a building where the business is run, amounting to at least Rp 200,000,000.oo (two hundred million rupiahs);
2) using modern marketing and service technologies;
3) controlling adequate warehousing compatible with the commodities traded;
4) applying modern management in the management of their businesses; Article 4
(1) Included as informal traders shall be hawkers, roadside sellers, street vendors, peddlers, hawking women carrying their wares in baskets held on their backs, food stalls, stalls selling daily necessities. depots, market kiosks, repair services, woodworking services and other services provided by informal traders.
(2) Informal traders must fulfill the following provisions:
1) the working capital, excluding land and buildings where the businesses are run, amounts to a maximum o; Rp 5,000,000.oo (five million rupiahs);
2) the business is conducted by the informal trader himself or by a number of persons;
CHAPTER III OTHER- PROVISIONS
Article 5
(1) In conducting their business activities, wholesalers may employ a maximum of 10 (ten) foreign employees who are university graduates or their equivalents and have at least 3 (three) years' experience in the area where they will be placed as technical assistants.
(2) For each foreign employee employed by a wholesaler as meant in sub-article (1), the said wholesaler shall be obligated to also employ at least 3 (three) Indonesian employees as experts or administrative personnel.
3) Expatriate employees may not assume positions in the personnel area. Article 6
Wholesalers shall be prohibited to conduct activities as retailers and informal traders.
Article 7
1) Retailers may employ a maximum of 3 (three) foreign employees who are university graduates or their equivalents and have at least 3 (three) years' experience in the area where they will be placed as technical assistants. 2) For each foreign employee employed by a retailer as meant in sub-article
(1), the said retailer shall be obligated to also employ at leari 3 (three) Indonesian employees as experts or administrative personnel.
3) Expatriate employees may not assume positions in the personnel area. Article 8
(2) The price list and the prices as meant in sub-article (1) must be expressed in ruplah (Rp).
(3) Trademark holding agents (ATPMS) and Trademark holding sales agents (APPMS) must be fully responsible for after-sales service and must at least for 1 (one) year give a guarantee the quality durability and operational reliability of the goods they sell.
Article 9
Wholesalers and large-scale, retailers may conduct their businesses at second4evel regions by forming partnership with small-scale businessmen.
Article 10
(1) Traders not included in the categorization as meant in Article 4 of this stipulation shall not be permitted to conduct activities as informal traders. (2) Wholesale and retail businesses set up on the basis of a foreign investment
scheme shall not be permitted to act as general importers. Article 11
(1) Traders shall be prohibited to hoard/store the community's staple commodities in their warehouses in unusually large quantities for speculation purposes so that the interest of the community shall be harmed.
CHAPTER IV SANCTIONS
Article 12
(1) Violation against the provisions in this regulation shall be subject to the imposition of a sanction in the form of the revocation of trade business registration (TDUP) or Trade Business Licence (SIUP) as regulated in Decree of the Minister of Industry and Trade No. 408/MPP/Kep.10/1997, or other sanctions pursuant to the prevailing laws, namely with respect to: a. wholesalers if they violate the provisions of sub-article (2) of Article 2,
Article 5, article 6, Article 8, Article 9 and Article 10.
b. retailers if they violate the provisions in sub-article (2) of Article 3, Article 7, Article 8 and Article 9.
(2) Violations against the provision in Article 1 1 shall be subject to sanctions imposed on economic criminal acts.
Article 13
(1) Further implementation provisions shall be stipulated by the Director General of Domestic Trade.
(2) With the enforcement of this decree, all provisions contradicting this decree shall be declared null and void.
CHAPTER V CLOSING
Article 14
This decree shall take effect as from the date of stipulation.
For public cognizance, this decree shall be announced by publishing it in the State Gazette of the Republic of Indonesia.
