1. German Legal Points for Business By : By : Guido Mayer attorney-at-law attorney-at-law bar certified specialist for bar certified specialist for commercial – and company law commercial – and company law business mediator business mediator Partner at Partner at Dumslaff & Partner Lawyers Dumslaff & Partner Lawyers Loehrstr. 87b Loehrstr. 87b 56068 Koblenz 56068 Koblenz Germany Germany Phone : +49 261 96323 0 Phone : +49 261 96323 0 Fax : +49 261 96323 34 Fax : +49 261 96323 34

2. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 2 German an European Regulations of Import Customs Duties  The delivery of goods all over the EU is to be set apart from import !  Import means the delivery of goods from beyond the bounds of the European Union (EU) into the European Union.

3. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 3 Europe EUROPE

4. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 4 Import Regulation from Non EU-Countries (e.g. Indonesia) Germany EU - Customs Code: Regulation EWG 1 No. 2913/92 German Customs Code: ZollverwG 2 and AWR 3 §12 AWR for dangerous goods 1 1 EWG = Europäische Wirtschaftsgemeinschaft (European Economic Community) 2 ZollverwG = Zollverwaltungsgesetz (Administrative Law for Customs ) 3 AWR = Außenwirtschaftsgesetz (German Foreign Trade and Payments Law)

5. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 5 Customs Proceedings There are different kind of customs proceedings. The most important way is delivering goods from a non - EU - country into an EU - country. Another interesting custom proceeding is the bond warehouse. The other legal customs proceedings are only reasonable, if your client wants to cultivate a good in Europe! They are not attractive for your kind of business. Bonded Warehouse  Customs have not to be paid by being imported in the bonded warehouse, but by taking goods of the bonded warehouse.  Economically reasonable when destination of goods all over the EU is not clear

6. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 6 Bonded Warehouse Bonded Warehouse Merchandise Consignment Sales Account Payment & Collect Service Warehouse Storage & Distribution Service Just-in-Time Delivery Service Customs & Port Clearance Service Import Formality Packing & Re-packing Market Analyis

7. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 7 EU Tariff of Duties Online Database of Customs Tariff Website: http://ec.europa.eu/taxation_ customs/index_en.htm PriceCalculation The Tariff of Duties and the taxes have to be paid by the importer !

8. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 8 EZT (Electronic Tariff of Duties) EZT Online Tariff of Duties Import Restriction Reportable Reportable import import RequiredDocuments Demand of Import License Since Jan 1 st, 2006, the German customs administration offers the tariff of duties added with national taxes (import sales tax and consumption tax) as „EZT – online“ (EZT = Electronic Tariff of Duties) in the internet: http://www.zoll.de/b0_zoll_und_steuern/a0_zoelle/c0_zollanmeldung/d10_atlas/e1_ezt_online/index.html http://www.zoll.de/b0_zoll_und_steuern/a0_zoelle/c0_zollanmeldung/d10_atlas/e1_ezt_online/index.html

9. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 9 Required Documents (for normal case) 1. Bill of Entry; registration via Internet: https://www.einfuhr.internetzollanmeldung.de/iza/content.do 2. Invoice, with : Name, Name, Address, Address, Number of goods, Description of goods, Price of goods, Terms of payment and delivery Country of origin and destination 3. Declaration of Value It is only necessary if the value of goods is more than € 10,000 (120 million Rp.) It is only necessary if the value of goods is more than € 10,000 (120 million Rp.)

10. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 10 Drafting of Contracts Drafting of Contracts Indonesia has not acceded the Convention on Contracts for the International Sales of Goods (UN – Sales of Goods) by now. Indonesia has not acceded the Convention on Contracts for the International Sales of Goods (UN – Sales of Goods) by now. Therefore it is very important to arrange choice of law and to arrange the place of jurisdiction.

11. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 11 Place of Jurisdiction Place of Jurisdiction It would be very difficult to carry out an Indonesian sentence in Germany. It is advisable to arrange the place of jurisdiction in Germany at the place where the buyer is located. It would be very difficult to carry out an Indonesian sentence in Germany. It is advisable to arrange the place of jurisdiction in Germany at the place where the buyer is located.

12. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 12 Choice of Law There are three practicable possibilities to draft the law: International Law German Law 3 rd Country Law

13. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 13 1. International Law Advantages  International rules that are accepted by governments, legal authorities and practitioners world - wide  As a rule fair and balanced Disadvantages  Difficult to customise for particular interests  In detail difficult to use UN - Sales of Good (CISG) / Incoterms

14. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 14 2. German Law Advantages  German judges are very familiar with German law; if the place of jurisdiction is in Germany - as highly recommended -, it is advisable to choose German law; usage of foreign law leads to expert opinion and high cost  German buyers are common with German law; that avoids quarrels in connection with the contract and its interpretation  Contracts can be simply adjusted for the individual case Disadvantages  Requirement of legal advise in Germany  Your are not familiar to German law (until now)  A buyer in another European country does not know german law; it might be that he does not accept German law

15. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 15 3. Choice of the Law of a Third Country Advantage:  Neither buyer nor purchaser know the law; chosen law is neutral Disadvantages:  High costs of legal advice  Legal actions are very expensive

16. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 16 German Import Sales Tax  Import sales tax called „Einfuhrumsatzsteuer“ originates according to § 1 subparagraph 1 number 4 of the German sales tax law (UStG) with the import of goods from a Non EU-Country; it is a special kind of value added tax.  Payment of import sales tax has to be proved by a receipt of custom house  Debtor is the buyer  The sales tax is actually in Germany about 19 % of the price of goods  In a normal case, the import sales tax is a VAT (Value Added Tax) on input  The buyer can subtract it from his sales tax, he has to pay So the buyer is not burdened with the import sales tax!

17. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 17 Import Sales Tax in different EU-countries

18. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 18 Concept of Co-operation between Indonesian Vendors and German Businessmen in Germany Instead of selling the goods to German importers, it is worth considering to incorporate with a German company, whose shareholders are shared between Indonesian vendors and German businessmen.

19. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 19 Concept of Co-operation Advantages :  Indonesian vendors does not need to search the German buyers  Prices can be negotiated in a fair way  Indonesian vendors don‘t need middlemen  No non-payment risk  All risks of selling are shared by all shareholders Disadvantages:  Indonesian vendors have to engage in a German company

20. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 20 Example of Cooperative Buyers in Europe European Buyers Co-operation of Indonesian Suppliers in Germany (supported by German Companies) sell Indonesian Supplier Indonesian Supplier Sell Shared IndonesianSupplier Sell Shared Sell

21. 15/01/15 RA Guido Mayer ____________________________________________ Dumslaff & Partner Rechtsanwälte 21 Example of Contract (German Law) click