Indonesia

Screen Shot 2019-04-12 at 4.57.19 PMBy Maharanny Hadrianto, Stephanie Kandou and Lina Amran, Makarim & Taira S.

 

 

Bank Indonesia (BI) recently issued Regulation No. 21/2/PBI/2019 on the Reporting of Foreign Exchange Flow Activities (Kegiatan Lalu Lintas Devisa)  (Reg. 21/2) on January 7, 2019, which came into effect on March 1, 2019.

Reg. 21/2 partially revokes BI Regulation No. 16/22/PBI/2014 on the Reporting of Foreign Exchange Flow Activities and the Reporting of the Application of the Prudential Principle in the Management of Non-Bank Entities’ Foreign Debts (Reg. 16/22), replacing all the provisions of Reg. 16/22 on the reporting of foreign exchange flow activities. Therefore, Reg. 16/22 now only covers reporting on the application of the prudential principle (kegiatan penerapan prinsip kehati-hatian, or KPPK).

Foreign exchange Flow Report

Scope

Reg. 21/2 has added risk participating transactions (transaksi partisipasi risiko, or TPR) to be reported as a part of the foreign exchange flow report (Flow Report). A TPR is defined as a risk assignment transaction of individual credit or other facilities under a master risk participation agreement. The scope of the Flow Report (Flow Report Scope) covers the following data and information:

  1. trade transactions of goods, services, and other transactions between a resident (ie a person, legal entity or other entity domiciled in Indonesia) and a non-resident;
  2. principal data of offshore debts (utang luar negeri, or ULN) and/or TPR;
  3. the plan of the ULN and/or TPR disbursements and/or payments;
  4. the realisation of the ULN and/or TPR disbursements and/or payments;
  5. the position of and amendments to offshore financial assets (aset finansial luar negeri), offshore financial liabilities (kewajiban finansial luar negeri) and/or TPR; and/or
  6. a new ULN plan and/or its amendment.

Except for TPR and the information required in items c) and d) of the Flow Report Scope above on the plan and realisation of ULN and/or TPR disbursements which are now covered by Reg. 21/2, the remaining scope of the Flow Report above is similar to the scope under Reg. 16/22.

The Flow Report must be submitted by the reporting party online through BI’s reporting website.

Reporting Party

The following parties are categorised as a reporting party required to submit the Flow Report:

  1. financial institutions, ie banks and non-bank financial institutions;
  2. non-financial institution business entities, ie legal entities and non-legal entities;
  3. other entities; and
  4. individuals.

Timings for Flow Report submission

The following timings apply to submitting the Flow Report:

Screen Shot 2019-04-12 at 5.20.02 PM

Previously, Reg. 16/22 required any amendment to the planned new ULN to be submitted by July 1 rather than June 15.

Corrections to the Flow Report must be submitted at the latest on the 20th day of the relevant submission month. If the deadline for the submission of the Flow Report or the correction falls on a weekend or holiday, the report can be submitted the following working day.

Sanctions

Unlike Reg. 16/22, BI under Reg. 21/2 no longer imposes monetary sanctions (fines). A reporting party that:

  1. submits a Flow Report with incorrect data and/or information (except for the new ULN plan and/or its amendments) and does not submit a correction;
  2. submits the Flow Report late; and/or
  3. does not submit the Flow Report,

will be served written warnings. The written warnings may be served by mail, e-mail or another medium. Written warnings only apply to new reporting parties after certain periods have lapsed.

A reporting party undergoing bankruptcy or is no longer operating may submit an appplication to BI to not have a written warning served by submitting the supporting evidence (such as copy of the bankruptcy application to the court or a letter evidencing a licence revocation from the relevant ministry).

Closing

Reg. 21/2 is effective as of March 1, 2019. The implementing regulations of Reg. 16/22 are still valid as long as they are not contrary to Reg. 21/2, but may be replaced by further regulations by Bank Indonesia related to the Flow Report, particularly on (i) the scope of the report, (ii) report coverage, procedures for submitting the report and report corrections and (iii) the procedures for sanctions.

 

 

Screen Shot 2019-04-12 at 5.08.23 PM

W: www.makarim.com

E: info@makarim.com
E: maharanny.hadrianto@makarim.com
E: stephanie.kandou@makarim.com
E: lina.amran@makarim.com

T: (62) 21 5080 8300
F: (62) 21 252 2750

Related Articles by Firm
Domestic non-deliverable forwards under Indonesian law
It is hoped that DNDF transactions in the market will provide confidence to business actors regarding owning assets in rupiah.
Indonesia: The Omnibus Law on Job Creation
What the bill has to offer ...
Indonesia: New regulation on the procurement of goods and services in the state-owned enterprises sector
On 12 December 2019, the new Minister of State-Owned Enterprises, Erick Thohir, issued new Ministry of State Owned Enterprises Regulation ...
Indonesian government simplifies outsourcing requirements
But users and providers still need to be aware of their restrictive and far-reaching breadth and scope.
Regulation on integrated mortgage services through electronic systems
The service aims to improve disclosure, punctuality, simplicity and affordability.
New Indonesian franchise regulation relaxes certain requirements
The new regulation aims to simplify the registration process and facilitate investment.
New amendment to Indonesia’s KPK Law
The main purpose of the amendments is to change the corruption eradication paradigm from prosecution measure to prevention measure.
Aircraft finance and leasing in Indonesia
The Indonesian aviation sector has grown rapidly over the past few years. Due to this, airlines and lessors have been capitalising on the general availability of diverse sources of funding ...
New KPPU regulation on merger filings
Simplification yet some clarity is needed.
Reminder – Requirement in the OSS System for companies to adjust their Business Classification Code
This joint notice requires limited liability companies to adjust their purpose and objectives.
Requirement to use the Indonesian language is regulated further
Indonesia has finally issued an implementing regulation of the Language Law.
BKPM amends its regulation on the procedures for licence and investment facilities
Divestment and foreign directors and commissioners’ requirements.
Indonesia's new regulation on e-litigation
The Supreme Court aims to have e-litigation operating in all courts of first instance by early 2020.
Latest amendment to the procedure for the resolution of small claims lawsuit
The new procedure provides more optimal and effective regulation than the previous regulation.
New government regulation on organisation of electronic systems and transactions
The Government of Indonesia finally issued Government Regulation No. 71 of 2019 on Organisation of Electronic Systems and Transactions on 4 October 2019, gaining momentum as the country sees the rise of ‘unicorns’ and President Joko Widodo boasting about the country’s digital economy ...
New decree on foreign workers in Indonesia
The Ministry of Manpower has issued a codified list of businesses in which foreign employees may be employed.
Regulating the sale and provision of digital content through mobile cellular networks
Regulations on digital content are becoming more relevant as investor interest in the Indonesian market rises.
Joko Widodo re-elected: How will it affect doing business in Indonesia?
In his election campaign, Jokowi declared nine missions ...
Indonesia: New regulation on Foreign Construction Representative Offices and Construction Foreign Investment Companies
On 13 June 2019, the Minister of Public Works and Public Housing issued Regulation No. 09/PRT/M/2019 on Guidelines on Licensing Services for Foreign Construction Business Entities ...
Settlement of disharmony between laws and regulations through mediation
On February 12, 2019, the Minister of Laws and Human Rights (MOLHR) issued Regulation No. 2 of 2019 on The Settlement of Disharmony between Laws and Regulations through Mediation (MOLHR Reg 2/2019), which came into effect on February 14, 2019 ...
Related Articles
"You can’t manage what you don’t measure"
….so said a General Counsel in a recent discussion we had about the use of data in their legal department.
Electronic signatures and virtual meetings — the Bermuda, British Virgin Islands and Cayman Islands legal framework
The introduction globally of travel restrictions and containment measures arising from Covid-19 has significantly disrupted business, including creating logistical issues in closing corporate or financing transactions or holding board and shareholders’ meetings ...
Related Articles by Jurisdiction
Energy & Natural Resources
Dr Mohamed Idwan (‘Kiki’) Ganie, Managing Partner of Lubis Ganie Surowidjojo, explains the impact of a new law on mineral and coal mining in Indonesia and the refining conditions which must be met in order to ...
Indonesia: New regulation on the procurement of goods and services in the state-owned enterprises sector
On 12 December 2019, the new Minister of State-Owned Enterprises, Erick Thohir, issued new Ministry of State Owned Enterprises Regulation ...
Latest Articles
"You can’t manage what you don’t measure"
….so said a General Counsel in a recent discussion we had about the use of data in their legal department.
Are you ready for the global tax reform?
A brief discussion on how MNCs should respond to the OECD’s new measures relating to Automatic Exchange of Information and Transfer Pricing issues