Recent news from Indonesian media reveals that Indonesia's Minister of Finance, Purbaya Yudhi Sadewa, has publicly pledged to implement a comprehensive reform of the Directorate General of Customs and Excise. If the authority fails to improve its poor public and presidential image and performance within one year, its operations will be suspended and taken over by Switzerland-based SGS. This sweeping overhaul, coupled with Indonesia's traditional "red light period" for customs clearance, has pushed compliance risks to a new high for exporters targeting the Southeast Asian giant.
Long-Standing Customs Issues & Reform Goals
For a long time, Indonesian customs has been regarded by the public as a "hotbed for bribery." A second-hand clothing merchant revealed that to get an imported container through customs smoothly, one may need to pay up to 550 million Indonesian rupiah in illegal fees. This rampant corruption has become a key target of the reform.
Minister Purbaya specifically highlighted two core rectification priorities: under-invoicing of exports and smuggling of illegal goods. The reform aims to crack down on irregularities, standardize clearance processes, and rebuild the credibility of Indonesia's customs system.
Red Light Period + Crackdown: 100% Inspection for High-Risk Goods
Notably, December to March of the following year is Indonesia's traditional "red light period" for customs clearance. This period targets new importers, incomplete clearance documents, high-risk goods, and shipments from high-risk countries. During this period, physical inspections are mandatory with an extremely high inspection rate—export enterprises holding red licenses will almost certainly have their goods inspected.
This year, amid the customs crackdown, the red light period has become even stricter. According to feedback from exporters, core ports in Indonesia such as Jakarta and Tangerang have implemented 100% unpacking inspections for multiple commodity categories, classified as "high-risk," including:
Textiles and garments
Electronic products
Cosmetics
Ceramic products
Children's toys
Inspectors focus on verifying whether the goods have valid compliance documents such as SNI certification, import quotas, and import licenses—key requirements under Indonesia's revised import policy (Regulation 16/2025) <superscript>2.
Cargo Value Under-Invoicing: A High-Risk Compliance Trap
Cargo value declaration has become a major compliance pain point. Low-priced goods are easily deemed as under-invoiced for tax evasion or illegal smuggling—even exporters who declare the actual value have been accused of under-invoicing by Indonesian customs. This risk is particularly prominent for Chinese exporters, as Indonesia has recently imposed anti-dumping duties on certain Chinese products (e.g., BOPET films) <superscript>1, increasing scrutiny on related shipments.
New Scanning System to Launch in March 2026: Centralized Supervision
To address under-invoicing and smuggling, Indonesia is upgrading its regulatory technology. Minister Purbaya stated that the government has invested heavily in upgrading information technology systems and purchasing new scanners, which are now deployed at major ports including Jakarta, Surabaya, Semarang, and Belawan.
Starting in March 2026, a centralized scanning system will be launched to plug loopholes. Under this new system, container scanning results will no longer be analyzed by local customs offices independently. All scanning images will be transmitted to the central processing center in Jakarta in real-time, and judgments on cargo compliance, value, and irregularities will be made directly by the central team instead of port officials—eliminating local discretion and reducing corruption risks but also increasing the rigor of inspections.
Compliance Tips for Exporters to Indonesia
Against the backdrop of the red light period and customs crackdown, Indonesian authorities are likely to further tighten regulatory controls. Exporters should pay close attention to the following to avoid compliance risks:
Complete Documentation: Ensure all documents (SNI certification, import licenses, quotas, commercial invoices) are complete and consistent with the declared goods. Verify sector-specific requirements under Regulation 16/2025 <superscript>2.
Accurate Value Declaration: Provide authentic and detailed commercial invoices, packing lists, and proof of transaction to avoid being accused of under-invoicing. Keep records of market prices for reference.
Avoid High-Risk Traps: For goods subject to anti-dumping duties (e.g., Chinese BOPET films) <superscript>1, strictly follow tax payment requirements and declare truthfully.
Cooperate with Reliable Partners: Work with local logistics companies or customs brokers familiar with Indonesia's latest policies to ensure smooth clearance.
Monitor Policy Updates: Track changes in customs regulations and red light period measures to adjust export plans in a timely manner.
Indonesia's customs overhaul is a double-edged sword: while it will optimize the long-term business environment, the short-term crackdown and regulatory tightening have significantly increased compliance costs and risks for exporters. Only by adhering to compliance requirements and keeping abreast of policy changes can exporters steadily expand their business in Indonesia's market.
