Minister of Finance Regulation Number 37 of 2026 Imposes Safeguard Import Duties on Synthetic Yarn Imports

Introduction 

On May 20, 2026, the Minister of Finance issued Minister of Finance Regulation Number 37 of 2026 on the Imposition of Safeguard Duties on the Import of Yarn Products (Other than Sewing Thread) of Synthetic and Artificial Staple Fibers ("MOF Regulation 37/2026"), which was promulgated on May 21, 2026, and took effect on May 22, 2026. MOF Regulation 37/2026 imposes safeguard duties on the import of certain yarn products to protect the domestic industry from a surge in imported goods that directly compete with domestic products, while providing time for local producers to adjust their business activities. 

The government is reapplying this policy because the validity period of Minister of Finance Regulation Number 46 of 2023 on the Imposition of Safeguard Duties on the Import of Yarn Products (Other than Sewing Thread) of Synthetic and Artificial Staple Fibers has expired, while the domestic industry still requires additional time to make adjustments. Based on the recommendation of the Indonesian Safeguards Committee (Komite Pengamanan Perdagangan Indonesia), the Minister of Trade subsequently proposed the re-imposition of the safeguard duties on the import of such yarn products to the Minister of Finance. 

Key Provisions 

Objectives of Imposing Safeguard Duties 

Article 1 stipulates that the Safeguard Duty (Bea Masuk Tindakan Pengamanan) is a state levy imposed to remedy serious injury or prevent the threat of serious injury to the domestic industry resulting from a surge in the volume of imported goods that directly compete with domestic products. Through this policy, the government provides an opportunity for the domestic industry to make necessary adjustments. 

Imported Products and Tariff Posts for Safeguard Duties 

The Safeguard Duty is imposed on the import of yarn products (other than sewing thread) of synthetic and artificial staple fibers as set forth in Article 2. Businesses importing these products must observe the classification of goods, as this provision applies to the following six tariff posts: 

1. Tariff post 5509.22.00; 

2. Tariff post 5509.32.00; 

3. Tariff post 5509.51.00; 

4. Tariff post 5509.53.00; 

5. Tariff post 5510.12.00; and 

6. Tariff post 5510.90.00. 
   
   

Validity Period and Tariff Rates of Safeguard Duties 

The Safeguard Duty is valid for 2 (two) years as set forth in Article 3. The tariff rates are listed in Annex A and are differentiated based on the period of imposition as follows: 

1. The first year, specifically the period from May 22, 2026, to May 21, 2027, is subject to a tariff of Rp324/kg. 

2. The second year, specifically the period from May 22, 2027, to May 21, 2028, is subject to a tariff of Rp308/kg. 

Additional Imposition on Import Duties 

Importers remain obligated to pay the Safeguard Duty in addition to the previously imposed import duties as set forth in Article 4. Therefore, this duty is imposed in addition to: 

1. The applicable general import duty or Most Favoured Nation (MFN); or 

2. Preferential import duty based on international agreements or treaties. 

Countries of Origin Subject to Safeguard Duties 

The Safeguard Duty is imposed on imports of synthetic yarn products from all countries of origin as set forth in Article 5 paragraph (1). Therefore, this provision applies to all importations of products included within the scope of goods under the regulation. 

Exemption for WTO Member Developing Countries 

The importation of yarn products originating from developing countries that are members of the World Trade Organization ("WTO") listed in Annex B is exempted from the imposition of the Safeguard Duty as set forth in Article 5 paragraph (2).  The list encompasses 123 countries, including India, Malaysia, the Philippines, Singapore, Thailand, the United Arab Emirates, and Saudi Arabia. 

Obligation to Submit Certificate of Origin 

Importers are obligated to submit a Certificate of Origin ("COO") document for the import of yarn products originating from developing countries exempted from the imposition of the Safeguard Duty as set forth in Article 6 paragraph (1). 

Provisions on Certificate of Origin and Document Verification 

In the event that an importer uses a preferential Certificate of Origin, the imported goods must fulfill the origin of goods provisions as set forth in Article 6 paragraph (2) and paragraph (3), which include: 

1. Origin criteria; 

2. Consignment criteria; and 

3. Procedural provisions. 

Verification of preferential Certificates of Origin is conducted in accordance with the provisions of international agreements or treaties as set forth in Article 6 paragraph (4).  Meanwhile, verification of non-preferential Certificates of Origin refers to the provisions of laws and regulations in the trade sector based on Article 6 paragraph (5). 

Transitional Provisions 

The importation of yarn products from exempted developing countries remains subject to the Safeguard Duty if the importer fails to fulfill the Certificate of Origin document requirements as referred to in Article 6 paragraph (1), paragraph (2), paragraph (3), and paragraph (5), in accordance with Article 7 paragraph (1). Furthermore, the duty also remains imposed if the preferential Certificate of Origin is undergoing a retroactive check process by customs authorities based on Article 7 paragraph (2). 

Subsequently, Article 8 paragraph (1) stipulates that the Safeguard Duty applies to imported goods whose customs declaration documents have obtained a registration number from the customs office or whose tariffs and customs values have been determined by the customs office in the event that the importation is conducted without the submission of a customs declaration. Meanwhile, the entry and/or exit of goods to and from free trade zones and free ports, bonded stockpiling areas, and special economic zones remain implemented in accordance with the provisions of laws and regulations governing such zones based on Article 8 paragraph (2). 

Closing

MOF Regulation 37/2026, which took effect on May 22, 2026, imposes a Safeguard Duty on the import of yarn products (other than sewing thread) of synthetic and artificial staple fibers to protect the domestic industry from a surge in imported goods that directly compete with domestic products while providing time for local producers to make business adjustments. The imposition of the duty applies to products under tariff posts 5509.22.00, 5509.32.00, 5509.51.00, 5509.53.00, 5510.12.00, and 5510.90.00 for 2 (two) years, with a tariff of Rp324/kg during the period from May 22, 2026, to May 21, 2027, and Rp308/kg during the period from May 22, 2027, to May 21, 2028. The Safeguard Duty is imposed in addition to the general import duty (Most Favoured Nation) or preferential import duty based on international agreements or treaties, and applies to imports from all countries. However, importations from the 123 WTO member developing countries listed in Annex B are exempted from the imposition of the duty provided that the importer submits a certificate of origin and fulfills the applicable origin of goods provisions, consignment criteria, and procedural provisions. In the event that the importer fails to fulfill these document requirements or the preferential certificate of origin is still undergoing a retroactive check process by customs authorities, the Safeguard Duty remains imposed. Furthermore, the imposition of the duty applies to imported goods whose customs declaration documents have obtained a registration number from the customs office or whose tariffs and customs values have been determined by the customs office in the event that the importation is conducted without the submission of a customs declaration. The entry and/or exit of goods to and from free trade zones and free ports, bonded stockpiling areas, and special economic zones also remain subject to the provisions of laws and regulations governing each respective zone.