Indonesia Failed to Exit Priority Watch List

May 09, 2022

Indonesia's efforts to pull out from the Priority Watch List (“PWL”) failed upon the release of the monitoring results on around 100 United States’ trading partners by the United States Trade Representative (“USTR”).

According to the USTR press release that was released on April 27, 2022, Indonesia remains on the Priority Watch List along with six other countries, including Argentina, Chile, China, India, Russia, and Venezuela. This means that Indonesia has been on the PWL for over 10 years, a situation that has not yet changed.

The above countries are under special attention from the USTR as they are deemed to be lack of law enforcement due to the high number of counterfeit products in the market. In other words, the countries under the PWL are under a special attention and warning from the USTR and the United States Government.

USTR decision to include those countries under PWL reflects similar recommendation issued by the International Intellectual Property Association (“IIPA”) on February 2022, in which the IIPA recommended that 10 countries, such as Argentina, Chile, Ecuador, India, Indonesia, Mexico, Russia, South Africa, Ukraine and Vietnam, to remain on the PWL.

Indonesia’s re-entry on the PWL is a heavy blow for the Indonesian Government, specifically for the Directorate General of Intellectual Property of the Ministry of Law and Human Rights (“DGIP”), as DGIP has made a number of efforts in their attempt of existing PWL, amongst others, introducing improved prevailing regulations, including enforcement on IP-related matters. In fact, an IP task force has been specifically formed as part of the initiative. Further, the Indonesian Government along with the Indonesian E-Commerce Association (“IDEA”) in October 2021 has instructed 5 E-Commerce companies, such as Bukalapak, Tokopedia, Shopee, Bibli, and Lazada, to ensure that counterfeit products are not being sold in their marketplaces. The fact remains, Indonesia is still on the PWL.

Ironically, Indonesia is the only member of ASEAN listed on the PWL, as Thailand and Vietnam are only listed in the Watch List. This shows that accordingly to the United States Government, Indonesia’s still lacks of compliance on IP laws, and also lack of enforcement on IP-related matters if it were compared to other countries.

This PWL issue would affect and form a negative image for the investment climate in Indonesia as investors will perceive that the Indonesian Government has yet put the adequate attention to IP protection and enforcement.

Whilst Indonesia deemed to made huge progress on IP protection and enforcement, there are a number of issues in regard to intellectual property laws that gained special attention, especially the Patent Law. In particular, USTR stated that the Indonesian Patent Law still contain some weaknesses and consequently would need to be improved, such as: revisions with respect of patent criteria and disclosure requirements for inventions pertaining to traditional knowledge and genetic resources. (jpk/rie/fbk/dch/su)

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