Indonesia continues to prohibit the sale of Apple (AAPL.US) iPhone 16, stating that its $1 billion plan, which includes building the AirTag factory, is insufficient to meet local investment requirements.

Industry Minister Agus Gumiwang Kartasasmita stated that Apple is required to domestically produce some smartphones or parts in Indonesia, while AirTag is just an accessory. This decision marks an unexpected turnaround just hours after Investment Minister Rosan Roeslani indicated on Tuesday night that Indonesia had approved Apple's plan to establish an AirTag facility.

Kartasasmita stated that Apple may face sanctions for continuously failing to comply with local investment regulations, and the authorities will look for other methods or options, adding that the government has already sent counter-proposals to Apple.