Monday, August 15, 2011

Gray market goods in Indonesia

Parallel imports are generally accepted these days with a few exceptions, chiefly pharma products. Other goods with specialised local requirements continue to be problematic. In Indonesia electronic articles have caused problems, because the government has regulated that instruction manuals must be in Indonesian language.

As a result the police have been conducting sting operations to purchase Ipads which are not presently supposed to be sold commercially. Traders buy them in Singapore then resell them in Indonesia. Jakarta police have made arrests citing breaches of either the USD500 limit on imported goods for personal use or failure to provide local language instruction manuals. The latter case however came into doubt when it became clear that the Indonesian government's list of products to which this applies did not include IPads. The police actions have cause somewhat of an outcry as being heavy-handed.

A mess of laws and regulations limiting free trade remain a major barrier for business and consumers in Indonesia. Many are legacies from the Suharto era, protectionist laws still in place. Others were put in place after due to of a lack of appreciation for free market economics. This makes it possible to take action against certain types of grey market goods in Indonesia, while the rest of the world makes it more difficult.

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