In an effort to cope with international standard whilst regulating insurance eligible to be regarded as a Component of Customs Valuations for Import Duty Calculations, the Director General of Customs has recently issued Regulation No. 02/BC/2005 (“Regulation”).

The Regulation limits its application on freight insurance and divides the insurance into two categories namely Individual Policy (closed), Open /Floating Policy and Open Cover Policy.

Individual Policy (Closed) will become eligible to be regarded for import duty calculation if it is issued by its insurance company or its underwriter, specifies the term of insurance and is valid at the latest on the date the goods is lodged to the ship of storage house. Similar terms should apply to open/floating policy insurance except that the latter also requires to specify the overall amount of insured warranty, numbers of shipments and maximum warranty for each shipment. Meanwhile, Open Cover Policy needs to specify the exact time, month and year of the insured term.

The enactment of the provisions of this Regulation repeals an earlier Director General Decision, KEP-89/BC/2000. This Regulation has been in force since 16 February 2005. (mma)