Home Blog A Guide to Timber Legality Assurance System Certificate in Indonesia Business Licenses | Business Setup | Indonesia A Guide to Timber Legality Assurance System Certificate in Indonesia InCorp Editorial Team 23 October 2020 3 minutes reading time Table of Contents SVLK Certification Process for Indonesian Timber Exporters How Cekindo can Assist The Minister of Trade has issued the latest regulation on the export of forestry industrial products number 45/2020, enacted by the Ministry of Law and Human Rights on May 11, 2020, and immediately takes effect after its enactment. The issuance of Permendag number 45/2020 replaces the previous regulation Permendag number 15/2020. The revocation of Permendag 15/2020 was carried out to ensure the export business in forestry industrial products and to implement the Voluntary Partnership Agreement between the Republic of Indonesia and the European Union on Forest Law Enforcement, Governance and Trade in Wood Products (FLEGT VPA) to the European Union, especially in connection with the use of Document V- Legal as a complementary customs document. With the revoking of Permendag 15/2020, it means that Permendag 84/2016, which had been amended by Permendag 38/2017 on Export Provisions of Forestry Industrial Products, will remain in effect. Based on this provision, products such as pulp, plywood, woodworking, and furniture are required to include a V Legal document issued under SVLK in the export process. Timber Legality Assurance System (SVLK) is needed by Indonesian timber exporters to ensure that all timber products that are distributed and traded have a clear and convincing legality status. In addition, with SVLK, the customers abroad do not suspect the legality of timber derived from Indonesia. Forest management does not need to worry about questionable timber legality either. The existence of an SVLK certification will help the wood-based industrial sector to grow, because the legality of the source of wood raw materials will convince customers or buyers abroad. SVLK Certification Process for Indonesian Timber Exporters 1. Fulfillment of Company Legality for Non Producer Exporters • Deed of incorporation • Business Trade License • Company Registration Certificate • Business Identification Number • Tax Identification Number • Having an agreement with TDI / IRT / craftsmen, non exporters who have SLK or DKP 2. Production and Fulfillment of Chain of Custody Documents (P.14 / PHPL / SET / 4/2016) • Chain of custody SOPs • Results of technical reports by surveyors • Other documents (CITES) 3. Implementation of procedures • Records and notes of filling operational forms for 3 months 4. SVLK audit • Audit findings & CAR 5. Issuance of SVLK Certificates • SVLK certificate The Timber Legality Assurance System (SVLK) itself is a multi-stakeholder tracking system designed to ensure the legality of the source of timber distributed and traded in Indonesia. The SVLK was developed to encourage the implementation of applicable government regulations related to legal trade and circulation of forest products in Indonesia. According to the time frame and document fulfillment requirements for the SVLK, the fastest SVLK audit is able to be conducted in 3 months after the Deed of Incorporation or Business Trade License or Business Identification Number is issued, and the certificate is issued within one month (maximum) after the closing audit meeting. During the first three months, the company must have records and reports on the application of existing procedures in the company. How Cekindo can Assist Applying for the SVLK may be a challenge if you are not familiar with the regulations and requirements. That is why Cekindo is here. Our team of certification experts can provide the support and assistance you need to secure the SVLK hassle-free. Fill in the form below now for further information and discussion. Read Full Bio Verified by Daris Salam COO Indonesia at InCorp Indonesia With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships. Frequently Asked Questions What is a CV? CV (Commanditaire Vennootschap) is a proprietary business entity that houses several individuals to run a business. How A PMA company can be eligible to conduct import activities? What licenses and procedures are necessary while engaging in import-related activities? A PMA company in Indonesia must obtain an NIB, which also functions as: Importer Identification Number (Angka Pengenal Impor or API) Producer Importer Identification Number (Angka Pengenal Impor Produsen or API-P), which is required for the import of machinery and equipment, goods, and materials used in production. General Importer Identification Number (Angka Pengenal Impor Umum or API-U), which is required for the import of specific goods for trading purposes, is grouped under one section in the Customs Classification System. Customs Identification Number (Nomor Identitas Kepabeanan or NIK), It functions as an identifying document for the applicable Customs and Excise authorities during the customs clearance process. Some goods may face limitations or restrictions on importation in Indonesia, potentially requiring additional approval from the Ministry of Trade. Recommendations from technical ministries like Industry or Agriculture may influence these approvals. Can you have a nominee arrangement when setting up PMA? A nominee arrangement is an arrangement that uses another person’s name as a subject. In Indonesia, it is prohibited. This restriction aims to prevent situations where a company is owned by one party but beneficially owned by another. According to the law, any nominee agreement between a local party and a foreign investor is deemed null and void. How is the process of liquidating a PMA company in Indonesia, and how long does it take? The procedures for (voluntarily) liquidation typically involve the following steps: Conduct a general shareholder meeting to approve the liquidation and the liquidator’s nomination Notify the Ministry of Law and Human Rights as well as the creditors of the liquidation and the distribution plan for the assets by newspaper notice All business licenses and tax numbers should be canceled or revoked; the tax office will conduct a tax audit to revoke the tax number Make sure creditors are paid and that any liquidation funds are distributed to shareholders (if any) Conduct a general meeting of shareholders to approve the liquidator’s discharge and acquittal Notify the Ministry of Law and Human Rights of the liquidation’s outcome. After receiving the notification, the Ministry of Law and Human Rights will deregister the company’s status as a legal entity and remove its name from the Company Registry Release the liquidation’s outcome in a newspaper Completing the liquidation process can take around two years. Get in touch with us. 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