Importing second-hand vessels has increasingly emerged as a viable alternative for the Indonesian shipping industry to expand their fleet. Cost efficiency, availability, and operational readiness, enabling faster deployment to meet growing market demand, are some of the considerations not to purchase newly built vessels.
Second-Hand Vessels Permitted for Importation
However, not all second-hand vessels can be imported into Indonesia. Article 12 par. 2(a) of the Minister of Trade of the Republic of Indonesia Regulation Number 24 of 2025 on Import Policy and Regulation of Non-New Goods and Non-Hazardous and Toxic Waste (“MTR No. 24/2025”) provides certain types of second-hand vessels which eligible to be imported into Indonesia. They are classified under specific Harmonized System (HS) Code, as follows:
- HS Code 8901 (cruise ships, excursion boats, ferryboats, cargo ships, barges, and similar vessels for transporting people or goods).
- HS Code 8903 (yachts and other vessels for leisure or sports; rowing boats and canoes).
- HS Code 8904 (tugboats and pusher craft).
- HS Code 8905 (light-vessels, fire-floats, dredgers, floating cranes, and other vessels whose primary function is not for navigation; floating docks; floating or submersible drilling or production platforms).
Requirements to Import Second-Hand Vessels
Indonesian companies intending to import second-hand vessels into Indonesia must satisfy a series of requirements stipulated in MTR No. 24/2025. They must be a direct user of the imported vessels and a holder of the Producer Importer Identification Number (Angka Pengenal Impor-Produsen/API-P). Moreover, prior to the importation, such companies must obtain an Import Approval (Persetujuan Impor) from the Ministry of Trade of the Republic of Indonesia, which is subject to the following key requirements:
- Relevant business licenses (e.g., sea transportation business license for shipping companies, risk-based business license/Business Identification Number, standard certificate, and/or other relevant licenses to support their business activities).
- A statement letter confirming that the imported vessels will not be traded or scrapped and they will comply with the applicable maximum age requirements.
- Certificates of the vessels verified by the Ministry of Transportation of the Republic of Indonesia (i.e., certificate of nationality, tonnage certificate, load line certificate, safety construction certificate, safety equipment certificate, and class certificate issued by the flag state or a classification society recognized by the flag state).
- Memorandum of Agreement (MoA) between the seller and the buyer (importer/user).
Upon completion of the imports, including submitting Import Declaration/Pemberitahuan Impor Barang and payment of tax and duties, the imported second-hand vessel must then be registered to the Indonesian Ship Registry in compliance with the Minister of Transportation of the Republic of Indonesia Regulation Number 39 of 2017 on Ship Registration and Nationality.
Restrictions on the Transfer of Imported Second-Hand Vessels
Following the importation, the regulatory framework imposes strict controls regarding the transfer of ownership. Under Article 12 par. 2(b) of the MTR No. 24/2025, second-hand/non-new capital goods are only permitted to be transferred after a minimum period of 5 (five) years of use.
Notwithstanding the prohibition, Article 12 par. 2(a) of the MTR No. 24/2025 provides limited exemptions for imported second-hand vessels which may be transferred after a minimum period of 4 (four) years of use. Early transfer before 4 (four) years of use is allowed in the case of exceptional circumstances such as force majeure or act of God, or in the event that other unavoidable conditions that hinder compliance with the minimum‑use requirement occur, such as bankruptcy of the importer/user (Article 12 paras. 3 and 4 of MTR No. 24/2025). The restrictions are imposed to prevent short‑term resale, ensuring the imported vessels are used for genuine operational purposes, and mitigating market distortions that could disadvantage domestic shipbuilders.
Sanctions
Non-compliance with the transfer restrictions is subject to administrative sanctions stipulated in the Minister of Trade of the Republic Indonesia Regulation Number 16 of 2025 on Import Policy and Regulation, as amended by Minister of Trade of the Republic of Indonesia Regulation Number 37 of 2025 on the Amendments to Minister of Trade of the Republic of Indonesia Regulation Number 16 of 2025 on Import Policy and Regulation (“MTR No. 16/2025”). Article 68 of the MTR No. 16/2025 provides 11 (eleven) types of administrative sanctions which may be imposed on violation of the transfer restrictions without explicitly specifying the sanctions applicable to any violation of the transfer restrictions under Article 12 of the MTR No. 24/2025.
However, despite the foregoing, there was a case where registration of ownership transfer (balik nama kapal) over an imported second-hand ship could not be processed by the Indonesian Ship Registry as the transfer was aimed to be carried out prior to the expiry of the mandatory period of 4 (four) years of use.
Final Thought
While importing second-hand vessels into Indonesia remains a viable and attractive alternative option for shipping companies to acquire vessels for fleet expansion, it is accompanied by stringent regulatory controls. Imported second-hand vessels are subject to restrictions on eligible vessel types, import requirements, and, most notably, a four-year minimum use obligation prior to transfer of ownership. Shipping companies must therefore carefully balance commercial considerations with regulatory compliance.
