Selling Without a Licence: Product and Corporate Consequences in Indonesia

1. Key takeaways

Selling without a marketing authorisation in Indonesia produces dual consequences at the product level and the entity level. At the product level: a device without a marketing authorisation falls within one of the six destruction categories and must simultaneously be withdrawn from circulation; Permenkes 5/2026, Articles 89-90 and Article 117 make clear that products circulating without a licence must be delisted. At the entity level: administrative sanctions apply.

• Administrative sanctions escalate in three tiers. The ladder runs written warning → suspension of activities → revocation of the marketing authorisation. Triggering situations include failure to fulfil quality and safety assurance obligations, failure to conduct vigilance, and failure to withdraw non-conforming products (PP 28/2024).
• Criminal risk exists at the trade and customs level. Under the Indonesian trade regulation framework, importing goods without a valid import licence and the required product licences is unlawful. Consequences include confiscation of goods, import suspension, administrative fines, and in serious cases company representatives may bear criminal liability. The risk of operating without a licence therefore extends beyond device regulation into customs and trade compliance.
• The first legal obligation sits upstream of every sanction. UU 17/2023, Article 143: producing or distributing medical devices requires a business licence (perizinan berusaha). This article is the upstream basis for all sanctions — without the licence there is no legal standing.
• Five scenarios catch companies unawares. ① Goods arrive first, certificate follows later (Permenkes 5/2026 requires the certificate before import); ② sales continue after certificate expiry without renewal; ③ LoA expiry invalidates the certificate while sales continue; ④ borrowing another party’s IDAK or SKI (importer, licence holder and actual owner are misaligned — extremely high risk, potentially leading to detention of goods, return shipment or penalties); ⑤ labels or claims changed after registration without authorisation.

2. Legal basis

The foundational provision is UU No. 17/2023, Article 143, which requires a business licence (perizinan berusaha) for producing or distributing medical devices; every sanction downstream rests on this requirement. PP No. 28/2024 supplies the withdrawal, destruction and administrative sanction regime, including the three-tier ladder and its triggers. Permenkes No. 5/2026, Articles 89-90 and Article 117, carries the no-circulation-without-licence principle and requires unlicensed products to be delisted, and the same regulation requires the certificate to be obtained before import. At the trade and customs level, the import licence framework applies (NIB/API and the current Permendag provisions), under which importing without a valid import licence and the required product licences is unlawful. The risk attached to borrowed qualifications — using another party’s IDAK or SKI — is a practical warning rather than a codified category.

3. Expert insights

The sanctions are not only regulatory — they propagate into trade law. Companies model the downside of non-compliance as device-regulation exposure: withdrawal, destruction, administrative sanction. The trade dimension is frequently missed. Importing without a valid import licence and the required product licences is unlawful in its own right, with confiscation, import suspension and administrative fines, and in serious cases company representatives may face criminal liability. A missing certificate therefore never stays a device-regulation problem: it crosses into customs territory where the goods, the import privileges and even individuals are exposed.

Most violations are administrative in origin, not technical. The five recurring scenarios have one common feature: none involves a defective device. Goods shipped before the certificate, sales continued after expiry, an LoA allowed to lapse, a borrowed IDAK or SKI, a label quietly changed — all are calendar and governance failures. This is why Permenkes 5/2026’s sequencing rule matters: it converts a project-management habit into a legal requirement, and companies whose shipping schedules run ahead of their licence applications are non-compliant by design.

The borrowed-qualification pattern deserves explicit warning. When the importer, the licence holder and the actual owner of the goods are three different parties, enforcement against the goods lands on whoever the paperwork names. Detention, return shipment and penalties follow the documents, not the commercial reality. Because the risk profile is extremely high and the remedy — restructuring the licence chain — takes time, this pattern should be identified and fixed before shipments, not after the first customs query.

The three-tier ladder is also a diagnostic tool. Reading the trigger list in PP 28/2024 against your own operations is the cheapest audit available: if quality and safety assurance across production and distribution is documented, vigilance is demonstrably running, and the withdrawal procedure has been rehearsed, the escalation ladder has nothing to grip. Companies rarely reach revocation through a single event; they arrive there by letting a written warning pass unanswered and a suspension pass without remediation. Treating each tier as a checkpoint, with named owners and deadlines for the response, keeps a first-stage warning from ever becoming the last-stage one.

4. Practical recommendations

• Build a compliance calendar around five dates. Certificate expiry, LoA expiry, IDAK expiry, CDAKB validity and distribution report submission nodes — any date approaching triggers an internal alert.
• Sequence imports strictly behind the certificate. Because Permenkes 5/2026 requires the licence before import, shipping schedules must never run ahead of the authorisation timeline.
• Treat the LoA and IDAK as certificate-critical documents. Renewals of both should start well before expiry, since a lapsed LoA or IDAK invalidates the certificate while stock is still on the market.
• Eliminate borrowed-qualification arrangements. Align the importer, licence holder and actual owner of the goods; where they cannot be aligned, restructure the licence chain before further shipments.
• Lock label and claim changes behind change control. Any post-registration modification of labels or claims without authorisation is a compliance breach, so marketing changes must route through the regulatory function.

5. Verification checklist

• □ UU No. 17/2023, Article 143 confirmed: business licence (perizinan berusaha) required (verified 26 October 2026)
• □ PP No. 28/2024 confirmed: withdrawal, destruction, administrative sanctions
• □ Permenkes No. 5/2026, Articles 89-90 and Article 117 confirmed: delisting of unlicensed products
• □ Trade and customs import licence framework checked: NIB/API, current Permendag provisions
• □ Five compliance-calendar dates entered with alert thresholds
• □ Borrowed-qualification risk reviewed across the current import chain (practical warning)

How GRZAN can help. GRZAN provides medical device and IVD registration, quality system, authorised representative and local testing support across Southeast Asia, including Indonesia. Our team prepares dossiers to ASEAN CSDT structure, manages AKL/AKL-I submissions with Kemenkes, and supports post-market vigilance obligations. Business enquiries: info@grzanglobal.com