Ministry of Trade Issues New E-commerce Regulation
The Indonesian Ministry of Trade has issued Regulation 31/2023 on Provisions of Business Licensing, Advertisement, Development and Supervision of Business Actors in Electronic Systems Trading that will effectively eliminate social media-based commercial transactions. As President Joko Widodo looks to preserve the place of Indonesia’s offline industries in domestic and local markets ahead of the 2024 election, the regulation is intended to significantly limit the presence of competing commercial platforms.
On the national level, regulation 31/2023 will prohibit social media commerce operators from facilitating payment transactions in their electronic systems. On the international level, the regulation will require a price minimum of USD 100 free on board (FOB) to be paid for all goods purchased via social media from abroad. The Ministry of Trade has stated that a positive list of products exempt from the import component of this regulation will be formulated in the coming month.
In a recent statement regarding the regulation, the President expressed his hope that new economic potential would be generated in existing industries from e-commerce restriction. Ministry of Trade officials have yet to elaborate on how the regulation will affect the livelihoods of Indonesia’s 189 million e-commerce users.