The trade finance system is essential for business to run smoothly, especially for small and medium-sized enterprises. The warehouse receipt system is one of the most important and effective solutions and instruments of the trade finance system. The warehouse receipt system can facilitate the granting of credit to the business community with stocks as collateral or goods stored in the warehouse. The warehouse receipt system is also useful in stabilizing market prices by facilitating a way of selling that can be done throughout the year. In addition, the warehouse receipt system can be used by the government to control domestic prices and stocks.
This ARMA update will deal with the general description of the Ministry of Commerce Regulation number 33 of the year 2020 (“MOT 33/2020”) as separately amended in the Ministry of Commerce Regulation number 14 of the year 2021 (“MOT 14/2021”) on goods and Requirements for goods that can be stored in the warehouse receipt system (“Warehouse Receipts Act”), which should provide certainty regarding the system of financing with the warehouse receipt system instrument.
1. Definition of warehouse receipt system
The warehouse receipt is proof of ownership of the title to goods stored in the warehouse and issued by the warehouse manager.1 The warehouse receipt system (“WRS”) is an issuance activity , transfer, guarantee and settlement of warehouse receipt transactions. 2 Warehouse receipts may also be traded on an organized market (exchange) or off the exchange by the holder of the warehouse receipt to third parties. With the transfer of the warehouse receipt, the new holder of the warehouse receipt has the right to take the goods listed therein.
It is specified that there are 2 (two) types of Warehouse Receipts, namely: i) Warehouse Receipts with scrip are securities whose ownership is in the form of certificates either for the account or by order; and (ii) warehouse receipts without certificates are securities whose ownership is registered electronically.3
The warehouse receipt must contain at least: 4
a. title of warehouse receipt;
b. Warehouse receipt type
vs. name and address of the owner of the goods;
re. location of the warehouse where the goods are stored;
e. publication date;
F. issue number;
g. the expiration date for storage of the goods;
h. description of the item;
I. storage costs; and
j. the signature of the owner of the goods and the warehouse manager.
2. Warehouse receipt as collateral
Warehouse receipts are encumbered with security interests in warehouse receipts, hereinafter referred to as warranty rights.
The warranty rights agreement in question contains at least:
a. the identity of the party giving and receiving the warranty rights;
b. data on the main agreement secured by the warranty rights;
vs. Specifications of the warehouse receipt which are pledged;
re. the value of the debt collateral; and
e. value of the goods based on market prices at the time the goods entered the warehouse.
Warehouse receipts used as collateral must be presented or are under the control of the obligee as collateral beneficiary. Therefore, if it is already in the hands of the creditor receiving the collateral, the warehouse receipt can no longer be re-guaranteed because the warehouse receipt which served as collateral must be delivered or is under the control of the obligee as collateral. as beneficiary of the guarantee. Thus, if the warehouse receipt is already in the hands of the creditor, the warehouse receipt cannot be reassigned. In addition, the beneficiary of this warranty right must notify the binding warehouse receipt agreement as collateral rights to the registration center and warehouse management.5 This notification contains data on the main agreement debt and receivables underlying the emergence of collateral. This notification will allow the Registration Center and Warehouse Management to more easily avoid double guarantees as well as to monitor the circulation of Warehouse Receipts and to ensure legal certainty on the beneficiary of the goods in the event of a breach. of contract.
3. Items and requirements for items that can be stored in the warehouse receipt system
The owner of the goods can store the goods in the WRS warehouse through the warehouse manager who issues warehouse receipts for each storage of goods after the owner of the goods has submitted the goods to the warehouse manager. When storing goods in the WRS warehouse, priority is given to strategic goods, top quality products, export destinations and / or food safety.6
Regarding the list of goods that can be the subject of warehouse receipts, it is determined by the Regulation of the Minister of Commerce 14/2021. As for the goods that can be stored in the WRS warehouse, they meet at least the following requirements: 7
a. Has a shelf life of at least 3 months;
b. Meet certain quality standards; and
vs. The minimum quantity of goods stored,
the minimum number of products that can be stored in the WRS warehouse depends on the policy of the warehouse manager, but for example for corn, given the number of capacities of the drying machines commonly used in the field, the reasonable minimum quantity to be stored is approximately 20 tonnes for each warehouse receipt issued.
In addition to these three requirements, the goods that can be stored in the WRS warehouse must also meet the technical requirements set by the head of the commodity futures trading supervisory agency. In the event of a change in the type of goods that can be stored in the WRS warehouse, the Minister will determine and take into account the recommendations of the regional government, relevant agencies or product associations while taking into account the storage requirements of the goods. 8