Government Regulation Number 29 of 2004 on High Technology Production Infrastructure for Optical Discs (“GR 29/2004”) impose stringent control on the circulation of optical discs by requiring importation of machinery, production equipment and production materials to be conducted only by registered importer with Limited Importer Identification Number (“APIT”) (Article 11 of GR 29/2004).

To further enumerate this article, The Minister of Industry and Trade recently issued Decision No. 645/MPP/KEP/10/2004 on Import Provisions for Machines, Machine Tools, Commodity Goods, and Optical Disks (the “Decision”). The Decision contained 15 Articles.

In essence, the Decision regulates that importation of several goods related to Optical Discs will be restricted only to the registered Importers List for Optical Disks (“ITCO”). Article 1 elaborate that ITCO is any company with Importer Identification Number which is approved by the Directorate General of Foreign Trade, Department of Trade and Industry to conduct the importation of machinery, equipments, materials to manufacture empty Optical Discs and/or importation of Optical Discs containing recorded materials.

To be appointed as ITCO, a company must include several documentations accompanying the application form: relevant business licenses, company registration seal, taxpayer number, import identification number, a statement letter of planned needs for the importation empty Optical Discs/Optical Discs with records or for the importation of materials required for the manufacture of empty Optical Discs, and a license from the copyright holder for importation of Optical Discs containing records and recommendation from relevant departments. The completed application form is to be submitted to the Director General of International Trade.

Acceptance or rejection of the application will be issued by the Director General within 15 days of the application being received. In the event the application is accepted a company will be appointed to the ITCO for a period of 3 years, which may be extended on further application.

ITCO-licensed companies must report its importation realization and its distribution in written to the Directorate General every 15 months. The Decision also accompanied by an attachment embodying a report form to be filled by companies.

The Decision includes strict reporting conditions to prevent or reduce the amount of pirated optical disk content in Indonesia. These provisions generally satisfy Indonesia’s international commitments with respect to the illegal exploitation of copyrighted material. Should a company breach any of these provisions the sanctions include the freezing of business activities or cancellation of ITCO license. A company’s business activities could be frozen for failure to comply with the relevant reporting procedures. This temporary suspension would be lifted once the company has complied with all of the necessary reporting provisions. A cancellation of ITCO license will be conducted by Directorate General should a company falsify its import documents or is alleged to be involved in piracy activities.

This Decision will come into force on the 18^th of April, 2005. (mma)