Indonesia has postponed a decision on plans to force Indonesian exporters to use letters of credit (L/Cs) in large overseas commodity sales.

Earlier this year the government said it would insist on the use of L/Cs for export shipments valued at more than US$1 million, but the plans proved controversial.

(DC World News, 15 May 2009).

Opposition

Now, the Indonesian government is saying that no decision will be made on the new trade regulation covering payment for exports until 1 November.

Opposition from exporters to the plans to force them to use L/Cs had already prompted the authorities in April to delay a decision until 1 September on the regulation, which would impact on exporters of several commodities.

Export revenues

The new regulation, if approved, would require exporters of cocoa, coffee, rubber and mining products to insist that their buyers pay on L/C terms.

The Indonesian government thinks that the new regulation would put a stop to exporters failing to repatriate export revenues and keeping their money offshore.

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