banseokReference Room

Questions about trade transactions (export finance) (Q27-34)

Trade/Customs Clearance
2024-02-14 01:38

Q27. Are there any legal problems when carrying out consignment sales and exports?

There are cases where a Korean exporter deals with an Indonesian importer (customs clearance and cost settlement agency), and the goods are actually sent to the warehouse of the Indonesian domestic buyer (final buyer), and both customs clearance and settlement are performed by the agency. In this situation, the final buyer in Indonesia pays the money to the agency, and the agency pays the amount minus the commission to the exporter.

In this case, the final buyer does not make payment directly with the Korean exporter, but through an intermediary agency. As long as the contents of the mutual contract are clarified, there will be no problem.

Q28. When supplying products to inland Indonesia, is it possible to receive payment in foreign currency such as dollars instead of rupees?

Signing a manufacturing consignment contract with Indonesian factory A → When producing goods and delivering them to Indonesian company B, it is not possible to receive foreign currency from Indonesian company B when making payment. Based on the consignment contract, the transaction must be carried out between Factory A and the Korean company.

In case of remittance of product price, please contact your local Korean bank and confirm the correct information before proceeding.

▶Hana Bank: PT Bank KEB Hana Indonesia TEL: +62-21) 5220222, 50811111

FAX : +62-21) 50811123

Address: Mangkuluhur City - Tower One,

Jl., Jend. Gatot Subroto Kav. 1-3, Jakarta 12930


Phone: +62-21) 1500 881 (Shinhan Bank), +62-21) 1500 336

(Shinhan Credit Card)

Office direct line: +62-21) 2975 1500

Address: International Financial Center 2 Floors 30 and 31

Jalan Jenderal Sudirman Kav. 22-23, South Jakarta 12920

▶IBK Industrial Bank of Korea: IBK Indonesia Phone: +62-21-5790-8888

Address: Wisma GKBI Suite UG-01, Jl. Gen. Sudirman No.28, RT.14/RW.1, Bend. Hilir, Central Jakarta, Special Capital Region of Jakarta 10210

<Information on major Korean banks>

Q29. After a Korean exporter exports to a factory in the Indonesian bonded area, can the Korean exporter and the bonded factory make payment first, and then can the Indonesian domestic buyer pay the price to the bonded factory?

Indonesian bonded factories receive bonded permits for export purposes. So, you have to export, but when selling to a local buyer, you can first pay the tax exemption and then sell locally. However, if local sales exceed exports or sales to domestic bonded companies, the bonded permit may be returned or cancelled. When a bonded company supplies to the domestic market rather than to export, it must be carried out in accordance with domestic sales laws, but the previous year's export performance must also be audited, which is complicated. Therefore, it is not realistically impossible, but procedural complexity must be taken into account in advance. You must also carefully check whether the tax office or customs will recognize such a transaction. We recommend that you first check with the customs/tax office before deciding whether to proceed with the transaction.

Q30. I plan to request the buyer to open a letter of credit to secure the stability of product payment collection. Is it impossible to open a letter of credit in Indonesia?

In Indonesia, it is possible to open a letter of credit (L/C). It is common to open a letter of credit after verifying the creditworthiness and collateral of the company opening the letter of credit, and the exact amount is unknown because the fee must be negotiated with the bank. In the case of commissions, it is believed that they will be roughly the same for each bank. For the opening procedure, if you go to your bank, it is believed that there will be no problems with confirmation since most commercial banks provide letters of credit.

Letter of Credit Definitions and Concepts

A letter of credit (L/C) is a document issued by a bank to guarantee credit upon an importer's request. If the documents required by the letter of credit are presented in accordance with all conditions, the issuing bank will make payment. It is a conditional payment promise that guarantees. With the importer as the client and the exporter as the beneficiary, the issuing bank, which is the importer's trading bank, issues the certificate in accordance with the importer's request and instructions or the bank's own decision.

A letter of credit provides for the performance of payment on behalf of the importer or the payment or acceptance of a bill issued under the letter of credit when the exporter or his/her representative presents transport documents that meet the conditions specified in the letter of credit. It is a promise deed confirming a promise to the purchasing bank and the holder in good faith.

Import procedures in the importing country (Indonesia) using a letter of credit

Contract conclusion → Import approval → Opening of an import letter of credit → Arrangement of transportation and subscription to marine insurance → Review of shipping documents and payment → Import declaration (customs clearance) → Export of goods


The beneficiary who has received the letter of credit from the issuing bank must strictly review whether the terms of the letter of credit are consistent with the terms of the contract before proceeding with the next procedure. If you proceed with export without reviewing the contents of the letter of credit at all, you must be careful not to be disadvantaged due to problems being discovered at the time of shipment or purchase and inconsistency with the terms of the letter of credit or failure to meet the terms.

Q31. When receiving payment, the Indonesian purchasing company wants to transfer IDR to the selling company in Korea. Is this possible?

This remittance is not possible due to Indonesian Central Bank Law. According to Article 18 of BI No 18/19/PBI/2016 Year 2016 (Pasal 18: Bank dilarang transfer rupiah ke luarnegeri), 'Banks in Indonesia are prohibited from directly transferring rupiah abroad. To send money overseas, you must first convert IDR to USD and then process the money.' It says.

Q32. The buyer's export payment is delayed. Is there any way to respond?

Sometimes non-payment of export payments occurs with buyers we are dealing with. In such cases, we will first urge you to remit the payment through the company. If this does not work, we recommend that you consider the following measures.

<Actions that can be considered depending on the situation>
  1. Cases where the relationship with the buyer needs to be continued or is willing to continue
    • As we are currently doing, we will continue to keep in touch and wait. Indonesians are prouder than they look, so if their feelings get hurt, it can have a negative impact on business. You must be careful not to offend the company during this process.
    • This is how to send a legal letter through a lawyer. This method should be discussed with a lawyer (legal expert).
  2. If you want to end your relationship with the buyer
    • There is an option to seek legal arbitration. For information on how to file a claim, please seek advice from KOTRA's legal advisor as provided in the attachment. If you contact us through KOTRA, the initial consultation is free.
    • Have you signed up for export insurance in advance? In that case, it would be a good idea to discuss how to compensate for losses due to receivables through the Korea Trade Insurance Corporation. If you do not have export insurance, please contact the Korea Trade Insurance Corporation Overseas Claims Team (Contact: 02-399-6592) to find out how you can cover losses even though you did not subscribe to insurance in advance. .
  3. If you suspect criminal activity, such as a long-term loss of contact with the buyer, you will need to report it to the police. Meanwhile, it is reported that cases where reports are made are rare, and even if reports are made, the possibility of receiving money is very low. In general, it is difficult for people in Korea to immediately report to the police, so they submit their complaint to the consular department of the Embassy of the Republic of Korea in Indonesia. Above all, even if you never do business with the buyer again, we recommend that you approach with caution because the company in question has a network with local distributors or importers.

Q33. An Indonesian buyer proposes a transaction over the Internet. How can I tell if it's a trade scam?

The Internet space is basically a space where trade fraud can occur. There are frequent cases where fraudsters impersonate Indonesian buyers and offer transactions through online platforms. The first way to find out whether there is trade fraud is to check whether the company in question exists through the Ministry of Justice and Human Rights website (

Also, when contacting a company you found out about on an Internet platform, we recommend that you use a secure company email rather than a commercial email that has the risk of being hacked. If you request a transfer to another account, claiming that your account has suddenly changed, you must confirm through an official procedure. In addition, please refer to the following information to prepare for trade fraud.

<How to prevent trade fraud>

Q34. Is there a way to recover money sent to a trade fraud company? If you are aware of a trade fraud, you should immediately contact your Indonesian bank indicated on the invoice (the bank that issued your account number). Afterwards, the bank

will register the case as a suspected fraud case and issue a registration number. The bank will request a copy of the client's (including agent's) ID, remittance receipt, invoice, Korean police station report confirmation, Indonesian police station report confirmation, etc. After the documents are complete, the bank will conduct a review. Based on the review results of the bank's wire fraud processing department, if the local bank blocks the receiving account and confirms that the funds are in the receiving account, the funds may be detained and remitted to the victim. However, the possibility of recovering the amount transferred increases only immediately after the transfer, and if a considerable amount of time passes after the transfer, it may be difficult to recover the amount sent.

Therefore, if you are already in a transaction or are not an authorized business partner, it is recommended to contact the customer directly before and immediately after the product or payment transaction and delivery. At this time, you must know the contact information where you can be contacted immediately, such as the person in charge's name, title, and cell phone. is. If you have any doubts or have made a remittance for a product to be delivered, acting as soon as possible will minimize the damage from fraud. If you contact us by phone before sending money and the contact is lost, it is best to deal with it quickly. However, if you are a victim of fraud, KOTRA does not have the authority to resolve criminal cases directly or on your behalf, so we recommend that you contact the consular department of the embassy or the Korean Association in this regard.

<Contact information for related organizations related to trade fraud damage>
Contact us Responsibilities in charge How to apply
A LOT (Counseling) Guide to receiving, confirming and resolving damage cases - KOTRA Jakarta Trade Center bulletin board (

- Main number: +62-21-574-1522

- Email: KOTRA Online Trade

Investment consultation bulletin board
Korean trade

Insurance Corporation
(Consultation and implementation) Customers

Credit inquiry work
- Main number: +62-21-570-5565

- Email address:
Korean Embassy in Indonesia (Execution) Consular services (including police consuls) - Consular Department main phone number:


- On-call phone contact information:

+62-811-852-446 (from 16:30)

- Representative email:
Janey Korean Association (Counseling) Counseling on complaints and providing practical tips - - Main number: +62-21-521-2486 - Email: