**Government Threatens Apple with Sanctions for Failing to Meet Investment Pledge**
Jakarta – The Indonesian Industry Minister Agus Gumiwang Kartasasmita has issued a stern warning to the US tech giant Apple for not meeting its investment commitment of US$10 million. This investment pledge was crucial for extending the certification of the domestic component level (TKDN) of Apple’s products from 2020 to 2023.
**The Sanctions Threat**
Minister Kartasasmita highlighted that the ministry has the authority to impose sanctions on Apple as per Article 59 of the Industry Minister’s Regulation Number 29 of 2017. These sanctions could include the revocation of the TKDN value, a significant blow to Apple’s operations in Indonesia.
**Apple’s Shortcomings and Negotiations**
Despite Apple’s efforts through the Apple Academy, which focused on education and training activities, it failed to engage in research and development (R&D) as required. The minister emphasized the importance of setting up an R&D facility in Indonesia to comply with the innovation scheme.
In recent negotiations, Apple agreed to pay the outstanding debt, prompting the ministry to appoint a third party to verify the repayment documents. However, no specific deadline was set for the negotiations, as the focus remains on the substance of the discussions.
**Impact on iPhone 16 and AirTag Production**
Minister Kartasasmita clarified that Apple’s proposed investment in an AirTag production facility in Batam would not facilitate the entry of its latest product, the iPhone 16, into the Indonesian market. This is due to the lack of direct relevance to the manufacturing processes of mobile phones, handheld computers, and tablets necessary for TKDN certification.
The Indonesian government also rejected Apple’s previous US$100 million investment proposal, deeming it inadequate relative to the company’s sales in the country.
As the standoff continues between the government and Apple, the tech giant faces the risk of sanctions that could affect its operations in Indonesia. The outcome of the negotiations will determine Apple’s future in the Indonesian market.
By taking necessary steps to fulfill its investment commitments and engage in R&D activities, Apple can salvage its relationship with the Indonesian government and secure its presence in the thriving tech market of Southeast Asia.
