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ISSN: 2442-5990 | pro.hukumonline.

com Edition 5| 31 MAY 2018

Table of Contents

Energy and Natural Resources 1


Draft Bill on Water Resources 2
Telecommunication and Media 10
Financial Services 11
Taxation 16
General Corporate 18
Trade 21
Miscellaneous 24

Energy and Natural Resources


1. Draft Bill on the Amendment to Law No. 4 of 2009 on Minerals and Coals Mining

Enforcement date: Currently being deliberated by the House

Summary:

• Eliminates the authority of regency/city governments to issue relevant mining licenses (“IUP”).
Consequently, only central and provincial governments now have the authority to issue IUP. Moreover,
IUP for state-owned enterprises or foreign investors can only be issued by the Minister of Energy and
Mineral Resources.

• Individuals are no longer allowed to apply for IUP, as these can now only be held by entities and
cooperatives.

• Any IUP for Operational Production which is integrated into smelting facilities or coal-fired power plants
may remain valid for a 50-year period at the maximum.

• The minimum-area requirement for IUP Exploration for metal minerals, non-metal minerals and coal
has now been eliminated, however, the maximum-area requirement remains the same.

• The obligation for holders of IUP for Operational Production to process and refine mining commodities
via domestic smelters still prevails. However, non-fiscal incentives are now being offered in the form
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of: 1) Longer extension periods; 2) Guarantees that mining areas will not be reduced in size; and 3)
Expansions of mining areas.

• For more information, see ILD No. 557.

Draft Bill on Water Resources


Enforcement date: Currently being deliberated by the House

Summary:

• Requires any utilization of water resources, either for commercial or non-commercial purposes (e.g., in
order to meet the daily needs of communities, for community agriculture, etc.) to be undertaken after a
utilization license has first been secured from central/regional government. This utilization license cannot
be either leased or transferred, either partially or in its entirety, to any third party.

• Commercial uses of water resources may take the form of the utilization of: 1) Water resources as a media;
2) Water and water-generated energy as materials; 3) Water sources as media; and/or 4) Water, water
sources and/or water-generated energy as media and materials.

• Sets the following requirements for individuals or businesses (e.g., state-/regionally owned enterprises,
private enterprises, cooperatives, individuals and joint-ventures) which are looking to secure the
utilization license: 1) Conformity must be demonstrated between the relevant business plan and a water-
resource management plan; 2) The parties concerned must take the form of a legal entity; 3) Various
technical and administrative requirements must be satisfied; 4) Cooperation must be entered into with
central/regional government; 5) At least 10% of any business profits must be allocated for the
conservation of water resources; and so forth.

2. Regulation of the Minister of Energy and Mineral Resources No. 21 of 2018 on the Fourth Amendment
to Regulation of the Minister of Energy and Mineral Resources No. 39 of 2014 on the Calculation of Fuel
Retail Prices

Enforcement date: 10 April 2018

Summary:

• Eliminates the lowest retail price for general types of fuel. Consequently, only the highest retail price
will prevail and will be set no higher than 10% more than the basic price after the basic value has had
the relevant amount of Value-Added Tax (“PPN”) and Motor Vehicle Fuel Tax (“PPKB”) added to it.

• Establishes two procedures which are to be used in order to determine general fuels prices, specifically:
1) If the general fuels are to be self-distributed by enterprises which are holders of commercial fuel
and/or distributorship licenses (“Enterprises”), then the determination and alteration of retail prices
should await the approval of the Minister of Energy and Mineral Resources (“Minister”) and should
take various economic factors into consideration; or 2) If the general fuels are not to be self-distributed

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by Enterprises, then the retail price should only be reported to Minister on a semesterly basis and in
an incidental manner. Previously, such approvals were not necessary.

3. Decree of the Minister of Energy and Mineral Resources No. 1794 K/10/MEM/2018 on Guidelines for the
Determination of Signing Bonuses for the Evaluation and Assessment of Working Areas Which Are to Be
Further Managed

Enforcement date: 18 April 2018

Summary:

• Establishes a guideline formula for the calculation of signing bonuses relating to the evaluation and
assessment of working areas which are to be managed in the future, specifically: Signing Bonus = 25%
x (Contractor’s NPV10% - Investment Cost – Fixed Commitment NPV10%).

• Contractor’s NPV10% is the Net Present Value which is calculated from the cash inflows and cash
outflows of upstream oil-and-gas businesses and encompasses a 10% discount.

• Investment Cost refers to non-reimbursed investment costs which are incurred in order to improve
and/or maintain production during the five-year period prior to the expiration date of the relevant
cooperation contract.

• Fixed Commitment refers to a contractor’s investment in improving the relevant reserve and
production rates during the first five-year period. Meanwhile, Fixed Commitment NPV10% refers to the
current value of the Fixed Commitment which is calculated from cash outflows and which
encompasses a 10% discount.

• Signing bonuses should be within the USD 1-250 million range.

4. Regulation of the President No. 36 of 2018 on the Amendment to Regulation of the President No. 9 of
2013 on the Management of Upstream Oil-and-Gas Activities

Enforcement date: 18 April 2018

Summary:

• Limits the authority of the Special Work Unit for Upstream Oil-and-Gas Activities (Satuan Kerja Khusus
Pelaksana Usaha Hulu Minyak dan Gas Bumi – “SKK Migas”) to the management of upstream oil-and-
gas activities which are based on cooperation contracts.

• Authorizes the SKK Migas Supervision Committee to appoint a maximum of five experts for the
purposes of the control, supervision and evaluation of the management of upstream oil-and-gas
business activities.

• Determines that the period of tenure of the Head of SKK Migas should amount to four years, which can
be extended through a process of reappointment for a further period of tenure. However, the
president, based on recommendations made by the Minister of Energy and Mineral Resources, as well

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as by the Supervision Committee, is authorized to discharge the Head of SKK Migas before their period
of tenure has been completed.

5. Regulation of the President No. 35 of 2018 on the Accelerated Construction of Waste-Processing


Electrical-Energy Installations Based on Environmentally Friendly Technologies

Enforcement date: 18 April 2018

Summary:

• Requires the local governments of several cities (i.e., Jakarta, Tangerang, Bekasi, Bandung, etc.) to
accelerate the construction of waste-processing electrical-energy installations which are based on
environmentally friendly technologies (“PLTSa”).

• Authorizes city governments to utilize any of the following schemes for waste-management purposes:
1) Government-to-government (i.e., cooperation between regency/city governments within a single
province); 2) Self-management; or 3) Government-to-business (i.e., waste-management cooperation
between businesses based on agreements).

• For the purpose accelerating the construction of PLTSa, governors and mayors are entitled to assign
regionally owned enterprises (“BUMD”) or to organize a tender process for businesses through a public
procurement scheme. However, if a tender mechanism fails and there are no BUMD capable of
constructing PLTSa, then State-Owned Enterprises will be appointed to complete the job.

• Requires PLTSa developers to secure the relevant environmental and electricity business licenses prior
to engaging in any PLTSa construction activity.

• Sets out benchmark pricing for the purchase of electrical power generated from PLTSa by PT PLN
(Persero), specifically: 1) US 13.35 cents/kWh if the relevant PLTSa capacity is ≤20 MW; or 2) If the
relevant PLTSa capacity is >20MW, the purchase price is to be calculated through use of the following
formula: 14.54 – (0.076 x PLTSa capacity).

• For more information, see ILB No. 3369.

6. Regulation of the Minister of Energy and Mineral Resources No. 24 of 2018 on the Second Amendment
to Regulation of the Minister of Energy and Mineral Resources No. 26 of 2017 on the Mechanism for the
Recovery of Investment Costs for Upstream Oil-an-Gas Business Activities

Enforcement date: 24 April 2018


Summary:
• The recovery of investment costs requires verification and approval from the Special Task Force for
Upstream Oil-and-Gas Business Activities (SKK Migas). The maximum period during which SKK Migas
can undertake a verification process is currently set at 30 days. Previously, no maximum verification
period was set.
• Requires the recovery of investment costs to be settled within seven days of the signing of any
cooperation contract with a new contractor. Should the recovery of investment costs exceed the above

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deadline, then existing contractors are allowed to charge fines of up to a maximum 2.5‰ for each day
of delay that new contractors have to handle.

7. Regulation of the Minister of Energy and Mineral Resources No. 23 of 2018 on the Management of Oil-
and-Gas Working Areas During Final Cooperation-Contract Periods
Enforcement date: 24 April 2018

Summary:

• Authorizes the Minister of Energy and Mineral Resources (“Minister”) to determine the management
of oil-and-gas working areas during final cooperation-contract periods as follows: 1) Extensions of
cooperation contracts for oil-and-gas contractors; 2) Management solely by PT Pertamina; or 3)
Collective management by both contractors and PT Pertamina.
• Any contractor who is seeking to extend a cooperation contract is required to submit an application
to the Minister between 10 and 2 years prior to the cooperation-contract period elapsing. Said
extensions can only be applied for for a maximum period of 20 years per extension.
• Sets out several types of information that must be submitted as a part of any applications for
cooperation extensions which are made by contractors, specifically: 1) Supporting data (e.g., working
programs, cooperation-contract proposals, etc.); and 2) Reports on the implementation of
cooperation contracts (i.e., information on production lifting, sources of oil and gas, etc.).
• Mandates that any newly appointed parties which are managing oil-and-gas working areas during final
cooperation contract periods (i.e., contractors, PT. Pertamina or both) are required to pay signing
bonuses, as determined by the Minister, and are also required to provide guarantees relating to the
management of oil-and-gas working areas.

8. Regulation of the Minister of Energy and Mineral Resources No. 28 of 2018 on the Amendment to
Regulation of the Minister of Energy and Mineral Resources No. 23 of 2018 on the Management of Oil-
and-Gas Working Areas During Final Cooperation Contract Periods

Enforcement date: 7 May 2018


Summary:
• Eliminates the cap on signing bonuses and any signing bonus now must be higher than USD 1 million
with no maximum threshold. Previously, signing bonuses had to be between USD 1 million and 250
million

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9. Regulation of the Minister of Energy and Mineral Resources No. 27 of 2018 on Compensation for Land,
Buildings and/or Plants Located under Free Electricity Transmission Networks

Enforcement date: 4 May 2018

Summary:

• Requires holders of electrical power supply business licenses (“Suppliers”) to pay compensation to any
parties who have had the economic value of their land, buildings and/or plants impacted (“Rights
Holders”) as a result of the implementation of the following activities: 1) Construction of new electricity
transmission networks; 2) Construction of electricity transmission networks in pre-existing network
areas which involve replacements and/or the addition of towers and/or conductors; and/or 3)
Construction of electricity transmission networks in pre-existing network areas which results in
additions being made to the widths of so-called free spaces or being made to the minimum horizontal
clearance when measured from the vertical axis of the relevant tower/pole.
• Compensation can only be granted once. This means that if existing Rights Holders who have been
granted compensation undergo changes of ownership involving new rights holders, then the new right
holders will not be eligible to receive any Compensation.
• Requires Suppliers to undertake the following activities prior to the payment of any compensation: 1)
Dissemination of information to any affected local populations relating to the relevant electricity
transmission network construction plans; 2) Initial data collection involving eligible Rights Holders; and
so forth.

10. Regulation of the Minister of Energy and Mineral Resources No. 26 of 2018 on the Implementation of
Good Mining Principles and the Supervision of Minerals and Coal Mining

Enforcement date: 3 May 2018

Summary:

• Requires holders of relevant mining licenses (i.e., exploration, operational production, processing
and/or refinement and mining services) to implement the following good mining principles and
measures when operating mining activities: 1) Good technical mining principles, covering: a)
Technicalities of mining, b) Conservation of minerals and coal, c) Safety of mining operations, etc.; and
2) Good mining business governance, including the following sectors: a) Marketing, b) Finance, c)
Prioritization of local content (specifically for mining services), and so forth.

• Good mining principles are to be implemented through the following measures: 1) Appointment of
certain executives as the highest command on the field; 2) Employment of competent technical
mining workers; 3) Implementation of decent technical mining practices, including: a) Use of mining
methods which have been approved, b) Drawing up of accountable work plans, and/or c)
Implementation of optimized mining activities; 4) Safe management of mining operations; 5)
Implementation of environmental management, reclamation and post-mining activities, as well as
post-operational activities; and so-forth

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11. Regulation of the Minister of Energy and Mineral Resources No. 22 of 2018 on the Amendment to
Regulation of the Minister of Energy and Mineral Resources No. 11 of 2018 on Procedures for the
Granting of Areas, Licensing and Reporting for Minerals and Coal-Mining Business Activities

Enforcement date: 18 April 2018

Summary:

• Stipulates that fees for any information and data on given areas for the purpose of obtaining mining
business licenses (“WIUP”) and Special WIUP (“WIUPK”) will be calculated based on the availability of
said data and information. Previously, fees were to be calculated based on the availability of the
following information: 1) Distribution of minerals and coal formation; and/or 2) Data on
indications/potential reserves of minerals and coal.
• Authorizes the Minister of Energy and Mineral Resources (“Minister”) or relevant governor to grant
WIUP for metal ores and WIUP for coal to businesses, cooperatives and individuals via a tender
mechanism. Previously, the Minister or governors were also authorized to grant WIUPK for metal ores
and coal.
• WIUPK tenders for both WIUPK metal ores and coal are to be implemented by a dedicated tender
committee, as appointed by the Minister.
• Redefines several provisions relating to entitlements and prohibitions for: 1) Holders of mining
business licenses (IUP) for special production operations for management and refineries; and 2)
Holders of IUP for transportation and sales.

12. Decree of the Minister of Energy and Mineral Resources No. 1805 K/30/MEM/2018 on Compensation
Amounts for Data and Information Relating to the Utilization of Land within Mining License Areas and
Special Mining License Areas for the Period of 2018

Enforcement date: 30 April 2018

Summary:

• Sets out compensation prices for requesting information relating to mining license areas (WIUP) for
exploration activities in the following blocks: 1) Mulya Agung Block: IDR 225 billion; 2) Waringin Agung
Block: IDR 225 billion; 3) Tumbang Karanei Block: IDR 225 billion; 4) Silo Block: IDR 150 billion; 5)
Sribatara Block: IDR 115 billion; 6) Natai Baru Block: IDR 190 billion; 7) Tumbang Nusa Block: IDR 190
billion; 8) Baronang I Block: IDR 165 billion; 9) Baronang II Block: IDR 90 billion; and 10) Piner Block:
IDR 190 billion.

• Sets out new compensation prices for requesting information relating to special mining license areas
(WIUPK) for exploration activities in the following blocks: 1) Latao Block: IDR 414.8 billion; 2) Suasua
Block: IDR 984.85 billion; 3) Matarape Block: IDR 184.05 billion; 4) Kolonodale Block: IDR 209 billion;
5) North Bahodopi Block: IDR 184.8 billion; and 6) Rantau Pandan Block: IDR 352.6 billion.

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13. Decree of the Minister of Energy and Mineral Resources No. 1802 K/30/MEM/2018 on Mining License
Areas and Special Mining License Areas for the 2018 Period

Enforcement date: 23 April 2018

Summary:

• Determines that the following mining license areas (“WIUP”) may be offered and/or tendered during
the 2018 period: 1) Mulya Agung Block; 2) Waringin Agung Block; 3) Tumbang Karanai Block; 4) Silo
Block; 5) Sribatara Block; 6) Natai Baru Block; 7) Tumbang Nusa Block; 8) Baronang I Block; 9) Baronang
II Block; and 10) Piner Block.

• Determines that the following special mining license areas (“WIUPK”) may be offered and/or tendered
during the 2018 period: 1) Latao Block; 2) Suasua Block; 3) Matarape Block; 4) Kolonodale Block; 5)
North Bahodopi Block; and 6) Rantau Pandan Block.

• Authorizes the offered WIUP to be granted to enterprises, cooperatives or individuals based on a


tender mechanism in accordance with the prevailing laws and regulations.

• Authorizes the offered WIUPK to be granted to: 1) state/regionally-owned enterprises via a priority
mechanism; or 2) Private enterprises via a tender mechanism.

14. Decree of the Minister of Energy and Mineral Resources No. 1801 K/30/MEM/2018 on the Formula for
the Calculation of Compensation Amounts for Information and Data Relating to Mining License Areas
and Special Mining License Areas for Minerals and Coal

Enforcement date: 23 April 2018

Summary:

• Determines the formula to be used when calculating Compensation for Information and Data (“KDI”)
in relation to special mining license areas (WIUPK), as follows:

𝐾𝐷𝐼 𝑊𝐼𝑈𝑃𝐾 = (𝐾1 × 𝑃1 ) + 𝑃2 + 𝑃3 + 𝑃4

• Determines the formula to be used when calculating KDI for information relating to mining license
areas (WIUP), as follows:

𝐾𝐷𝐼 𝑊𝐼𝑈𝑃 = 𝑃1 + 𝑃2 + 𝑃3 + 𝑃4

• The abovementioned variables refer to the following: 1) K1: Dimensions of potential areas; 2) P1: Price
variable for potential areas (either per hectare or per block); 3) P2: Price variable for types of mining
commodities; 4) P3: Price variable relating to the status of the mining areas (i.e., ex-operational-
production, ex-exploration or new area); and 5) P4: Price variable for loading/transshipment activities.

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15. Decree of the Minister of Energy and Mineral Resources No. 1798 K/30/MEM 2018 on Guidelines for
the Implementation of the Preparation, Determination and Issuance of Mining License Areas and Special
Mining License Areas for Minerals and Coal

Enforcement date: 20 April 2018

Summary:

• Establishes guidelines for mining businesses which address the following: 1) Preparation and
determination of mining license areas (“WIUP”) for metal minerals and coal; 2) Preparation and
determination of special mining license areas (“WIUPK”); 3) Mapping and coordinate formats for of
WIUP or WIUPK; 4) Mapping formats for WIUP and WIUPK; 5) Guidelines for the codification of WIUP
or WIUPK; 6) Guidelines for the granting of WIUP for non-metal minerals and/or WIUP for rock; 7)
Guidelines for the issuance of recommendations for the granting of WIUP for non-metal minerals
and/or WIUP for coal; 8) Membership, prerequisites, duties and authorities of tender committees for
WIUP and WIUPK; 9) Implementation of a tender mechanism for WIUP for metal minerals and WIUP
for coal, as well as WIUPK for enterprises; 10) Guidelines for the granting of WIUPK via a priority
mechanism; and 11) Requirements for the following tender participants - WIUPK for enterprises,
WIUP for metal minerals and WIUP for coal, and also participants in the WIUPK via a priority
mechanism.

16. Decree of the Minister of Energy and Mineral Resources No. 1796 K/30/MEM/2018 on Implementation
Guidelines for the Application, Evaluation and Issuance of Licenses for Mineral and Coal-Mining Activity

Enforcement date: 19 April 2018


Summary:
• Sets out comprehensive procedures and requirements for the issuance of the following licenses: 1)
Mining Licenses (“IUP”) for Exploration; 2) Special Mining Licenses (“IUPK”) for Exploration; 3) IUP
Operation Production (“IUP OP”); 4) IUPK Operation Production (“IUPK OP”); 5) IUP OP specifically
for processing and/or refineries; 6) IUP OP specifically for transportation and sales; 7) Mining Service
Business Licenses; 8) Changes relating to share ownership, directors and commissioners; 9)
Disbursement of Exploration seriousness collateral; 10) Partnership Programs; 11) IUP OP specifically
for sales; 12) IUPK OP resulting from the transformation of Contracts of Work (“KK”); and 13) IUPK
OP resulting from the extension of expired KK.

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17. Regulation of Minister of Energy and Mineral Resources No. 25 of 2018 on Minerals and Coal-Mining
Businesses

Enforcement date: 3 May 2018


Summary:

• Establishes a single licensing framework for minerals and coal mining. This regulation revokes nine
former regulations which addressed the mining sector.

• Addresses two mining business types, specifically: 1) Mineral mining; and 2) Coal mining. The relevant
mining licenses remain the same, specifically: 1) Mining License (“IUP”); 2) Special IUP (“IUPK”); and
3) Community Mining License (IPR).

• IUP and IUPK for exploration allow for businesses to undertake the following activities: 1) General
research; 2) Exploration; and 3) Feasibility studies. Meanwhile, IUP and IUPK for operational
production allow for businesses to undertake the following activities: 1) Construction of mining
facilities; 2) Mining activities; 3) Processing and refinement (smelting) activities; 4) Research and
development; 5) Transportation and sales.

• In terms of processing and refinement activities specifically, mining companies which have secured
export approvals are required to build smelters. One month prior to the relevant deadline, smelter
construction must be 90% complete, otherwise, the relevant export approval may be revoked and
fines amounting to 20% of the total export revenue may be imposed.

• For more information, see ILB No. 3367.

Telecommunication and Media


18. Regulation of the Minister of Communication and Informatics No. 1 of 2018 on the Accreditation of
Technical Training Institutions within the Information-Technology and Communication Sector

Enforcement date: 12 April 2018

Summary:

• Requires the National Body for the Development and Empowerment of Human Resources at the
Ministry of Communication and Informatics (“Balitbang SDM”) to implement the accreditation of both
independent and dependent technical training institutions (“Training Institutions”) which offer
training relating to the information technology and communication (“TIK”) sector.

• The accreditation process will be implemented by an accreditation team which will assess the
following factors: 1) Institutional aspects of Training Institutions (e.g., trainers, strategic planning,
etc.); and 2) TIK training programs (i.e., curricula and management measures).

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• Sets out the following accreditation process procedures: 1) Application submission: the relevant Head
of Training Institution submits an accreditation application; 2) Data completion: the Head of Balitbang
SDM requests the submission of data (to be completed online); 3) Assessment process (six months):
the accreditation team undertakes the relevant assessment and submits the results to the Head of
Balitbang SDM; and 4) Rating: the Head of Balitbang SDM determines the relevant accreditation
rating.

Financial Services
19. Regulation of Bank Indonesia No. 20/6/PBI/2018 on Electronic Money

Enforcement date: 4 May 2018

Summary:

• Classifies electronic money (“E-Money”) based on the following classifications: 1) Scope of use: a)
Closed loop (which is utilized for the purpose of purchasing issuers’ products); and b) Open loop
(which is used to buy goods and services which are not the issuers’ products); 2) Storage media (i.e.,
server-based and chip-based); 3) Recordation of user identity data (i.e., unregistered and registered).
• Requires all E-Money operators to secure licenses from Bank Indonesia prior to engaging in any
commercial operations involving E-Money, with the exception of issuers of closed loop E-Money with
float funds of less than IDR 1 billion.
• Requires non-bank institutions which are applying for licenses to become E-Money issuers to have
paid-up capital amounting to IDR 3 billion with a further tiered minimum amount of paid-up capital
according to the relevant float funds.
• Sets the maximum amount of money that can be deposited in the E-Money as follows: 1) IDR 2 million
(for unregistered E-Money); and 2) IDR 10 million (for registered E-Money).
• For more information, see ILB No. 3365 and ILD No. 558.

20. Regulation of the Government No. 14 of 2018 on the Foreign Ownership of Insurance Companies

Enforcement date: 18 April 2018

Summary:

• Authorizes foreign parties (i.e., foreign individuals and/or foreign legal entities) to invest in insurance-
related companies (i.e., conventional/sharia insurance/reinsurance companies,
insurance/reinsurance broker companies, etc.) via direct and portfolio investments, as well as to own
any domestic legal entities which eventually own insurance-related companies.

• Sets a maximum foreign-ownership cap for insurance-related companies of 80%. However, note that
this cap does not apply to the following parties: 1) Publicly listed companies; and 2) Non-publicly listed
insurance-related companies which exceeded the 80% cap prior to the enactment of this regulation.

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• This government regulation contains no provisions which require Indonesian nationals to be included
as Boards of Directors and Boards of Commissioners members of any foreign-owned insurance-
related companies.

• For more information, see ILB No. 3361.

21. Regulation of the Financial Services Authority No. 6/POJK.03/2018 on the Amendment to Regulation
of the Financial Services Authority No. 7/POJK.03/2016 on Precautionary Principles for the
Implementation of Activities Relating to Structured Products for Commercial Banks

Enforcement date: 22 April 2018

Summary:

• Defines structured products as combinations of several financial instruments, specifically non-


derivatives with derivative elements or between derivatives, and which thus possess unique
characteristics.

• Eliminates the possibility of banks which take the form of cooperatives from engaging in structured
product transactions.

• Banks which engage in derivative-derivative structured product transactions initially require


customers to deposit cash collateral amounting to 10% of the total notional transaction value.
However, this collateral obligation now exempts both: 1) Special customers (i.e., banks, the
Indonesian Government, central banks and multilateral development banks); and 2) Special
structured-product transactions (i.e., hedging and treasury line facilities/foreign-exchange line
transactions).

• Sets specific requirements for hedging transactions, specifically: 1) Must have underlying
transactions and/or supporting documents; 2) The values of both hedging transactions and
underlying transactions must be identical; and 3) The time periods for both hedging transactions and
underlying transactions must be equal.

• Adds two new sanctions for acts of non-compliance, specifically: 1) Prohibition on the expansion of
business activities; and 2) Prohibition on the opening of office networks.

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22. Circular of the Financial Services Authority No. 9/SEOJK.05/2018 on Applications for Licenses, Approvals
and Reporting for Insurance Broker Companies, Reinsurance Broker Companies and Insurance Loss-
Appraisal Companies via Electronic Means

Enforcement date: 20 June 2018

Summary:

• Stipulates the procedures for the submission of electronic applications for licensing, approvals and
reporting by insurance broker companies, reinsurance broker companies and insurance loss-appraisal
companies (“Companies”), which include the following stages: 1) Submission via the OJK network
communication system or manually if the system is experiencing technical difficulties; and 2) Securing
of an application submission receipt.
• Sets out a self-assessment form (checklist) for applications relating to licensing, approvals and
reporting by Companies. Details of the self-assessment form are further described in the Appendix to
this Circular.
• Requires Companies to retain hard copies of all submitted licensing and approval documents for as
long as the relevant licenses and approvals are still valid, as well as to retain all reporting-related
documents for a minimum of five years from the relevant date of reporting.
• For more information, see ILB No. 3370.

23. Regulation of Bank Indonesia No. 20/5/PBI/2018 on Monetary Operations

Enforcement date: 16 April 2018


Summary:

• Combines both conventional and sharia monetary-operation activities under a single framework that
encompasses the following measures: 1) Open-market operations (“OPT”) which can be participated
in by banks either directly or indirectly (through intermediary institutions); and 2) Standing Facilities
which can be participated in by banks only.

• Authorizes Bank Indonesia (“BI”) to issue the following securities during monetary operations: 1)
Conventional securities: BI certificates (“SBI”); BI time-deposit certificates (SDBI) and BI securities in
foreign currencies; and 2) Sharia securities: Sharia SBI.

• Requires parties who wish to participate in monetary operation transactions to secure licenses from
BI through the following procedures: 1) Application submission; 2) Assessment; and 3) Approval.

• Requires monetary operation participants to satisfy the following requirements for the purpose of
transaction settlements: 1) Must be in possession of securities accounts at BI and/or custodian banks;
2) Must be in possession of demand deposit (giro) accounts at BI, which must be held either in IDR or
in foreign currencies, and so forth.

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24. Regulation of the Members of the Board of Governors of Bank Indonesia No. 20/9/PADG/2018 on
Standing Facilities

Enforcement date: 30 April 2018


Summary:
• Defines standing facilities as instruments which are used by BI in order to set the parameters for
injections and absorptions of IDR currency within the money markets and which also function as
maximum and minimum levels for overnight interest rates.
• Standing facilities are to be implemented through the following activities: 1) Lending facilities for
conventional banks and financing facilities for sharia banks; and 2) Deposit facilities.
• Stipulates the following characteristics of lending facilities: 1) Issued by Bank Indonesia on weekdays;
2) Implemented through the use of a non-tender mechanism; 3) Administered through the BI-Scripless
Securities Settlement System (BI-SSSS); and so forth.

• Sets out detailed provisions which address lending facilities and financing facilities as they relate to
the following matters: 1) Transaction mechanism; 2) Maximum value; 3) Repurchase agreements
(repo); 4) Special documents for sharia transactions; and 5) Implementation procedures.

25. Regulation of the Board of Governors of Bank Indonesia No. 20/8/PADG/2018 on Criteria and
Requirements for Commercial Papers Used in Monetary Operations
Enforcement date: 30 April 2018

Summary:

• Sets out several criteria for commercial papers in the IDR currency that can be utilized as a part of
monetary operations, including: 1) Must be issued by Bank Indonesia and/or the Republic of
Indonesia; 2) Must be registered with the BI-Scripless Securities Settlement System (BI-SSSS); and 3)
Must not being collateralized.
• Sets out various criteria for commercial papers in foreign currencies that can be utilized as a part of
monetary operations, including: 1) Must be issued by central banks of foreign countries which have
established cooperations with BI; 2) Must have investment grades; 3) Must not be collateralized; and
so forth.
• Sets out several types of commercial papers in foreign currencies that can be utilized as a part of
monetary operations, including: 1) BI Certificates (SBI); 2) BI Deposit Certificates (SDBI); 3) State
Securities (SBN); and 4) Short-/long-term sovereign bonds which are only utilized through
conventional open-market operations involving repo transactions.
• Sets out detailed provisions relating to the following matters involving the utilization of commercial
papers as a part of monetary operations: 1) Prices and haircuts for commercial papers; and 2)
Formula for calculating settlement values for monetary operations (i.e., including calculations of
accrued interest, early redemptions and so forth).

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26. Regulation of the Board of Governor of Bank Indonesia No. 20/7/PAG/2018 on Monetary Operation
Participation
Enforcement date: 30 April 2018

Summary:

• Participants in monetary operations comprise banks which are acting as participants in open-market
operations (either directly or indirectly via intermediary agencies) and standing facilities.
• Requires banks to first secure licenses from BI in order to become participants in monetary operations,
specifically: 1) Licenses for participants in Conventional Monetary Operations (OMK), either in IDR or
in foreign currencies; and 2) Licenses for participants in Sharia Monetary Operations (OMS), either in
IDR or in foreign currencies.
• Sets out several requirements for banks and intermediary agencies which are looking to become
participants in monetary operations, including: 1) Institutional requirements (i.e., possession of BI
licenses, etc.); 2) Infrastructure requirements (i.e., must be participants in the BI - Electronic Trading
Platform, etc.); 3) Human-resource requirements (i.e., must employ boards of directors and
employees who are capable of performing treasury-related activities); and 4) Risk-management
requirements (i.e., must possess internal procedures relating to business continuity planning, etc.).
• Sets out several stages that will be implemented by BI during the processing of applications to secure
the abovementioned licenses: 1) Administrative research; 2) Feasibility analyses; and/or 3)
Verifications.

27. Regulation of the Financial Services Authority No. 7/POJK.04/2018 on the Submission of Reports through
Issuers or the Electronic Reporting Systems of Public Companies
Enforcement date: 25 April 2018

Summary:

• Requires issuers or public companies to submit various reports to the financial services authority (OJK)
online via: https://spe.ojk.go.id (“SPE Website”) or via another web address, as determined by the
OJK.
• Reports should address the capital market, as mandated by the following regulations: 1) Regulation
of the OJK No. 32/POJK.04/2014 on the Implementation of General Meetings of Shareholders, as
amended by Regulation of the OJK No. 10/POJK.04/2017; 2) Regulation of the OJK No.
30/POJK.04/2015 on Reports on the Utilization of Funds Generated through Public Offerings; and so
forth.
• Mandates that issuers and public companies should maintain documents relating to any submitted
reports and should submit reports if requested to by the OJK. Any information which is contained
within said maintained documents must be consistent with any information which is submitted to the
SPE Website.
• Prior to the online submission of reports via the SPE Website, issuers and public companies are first
required to secure usernames and passwords from the OJK, as well as to provide adequate hardware,

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software and internet connections in accordance with the prevailing SPE guidelines, which can be
downloaded from the OJK website.

Taxation
28. Regulation of the Director-General of Tax No. PER-09/PJ/2018 on the Postponement of the Enforcement
of the Provision on the Inclusion of Buyers’ Identities, as Referred to in Article 4A of No. PER-16/PJ/2014
on Procedures for the Drawing up and Reporting of Electronic Tax Invoices, as Amended Most Recently
by Regulation of the Director-General of Tax No. PER-31/PJ/2017

Enforcement date: 1 April 2018

Summary:

• Postpones the implementation of Article 4A of Regulation of the Director-General of Tax No. PER-
16/PJ/2014 on Procedures for the Drawing up and Reporting of Electronic Tax Invoices, as amended
several times, most recently through the issuance of Regulation of the Director-General of Tax No.
PER-31/PJ/2017.

• Article 4A obliges taxpayers who are working as sellers or service providers to include the names,
addresses and citizenship identity numbers (“NIK”) or passport numbers of their buyers/clients within
electronic tax invoices if they are not in possession of NPWP tax ID numbers. The absence of such
information in electronic invoices will lead to said invoices being deemed non-issuable.

29. Regulation of the Minister of Finance No. 39/PMK.03/2018 on Procedures for the Preliminary
Reimbursement of Tax Overpayments

Enforcement date: 12 April 2018

Summary:

• Authorizes the Preliminary Tax Overpayment Reimbursement Decree (“SKPPKP”) to be issued by the
Director-General of Tax (“Director-General”) based on applications which are made by the following
parties: 1) Taxpayers which meet certain criteria (“Taxpayers A”); 2) Taxpayers which meet certain
requirements (“Taxpayers B”); and 3) Low-risk corporate taxpayers which engage in certain business
activities (“Taxpayers C”).
• Sets out the procedures that must be followed by Taxpayers A, B and C in order for them to secure
tax reimbursements, as follows: 1) Must fill out the preliminary tax-reimbursement column in an
annual tax return (SPT); 2) Must satisfy certain formal requirements relating to preliminary tax
reimbursements (for Taxpayers A and C only); and 3) Must undergo inspections as implemented by
the Director-General.
• Sets out the scope of Taxpayers C who can be granted reimbursements for any value-added tax
overpayments: 1) The majority of their shares must be directly owned by the government; 2) They
must have been determined as Authorized Economic Operators; and so forth. While the scope of

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certain business activities encompasses: 1) Exports of taxable tangible goods; 2) Deliveries of taxable
goods and/or deliveries of taxable services to collectors of value-added tax; and so forth.
• Stipulates that if Taxpayers A and B are also categorized as Taxpayers C, then the securing of tax
reimbursement must follow the procedure for Taxpayers C.

30. Regulation of the Director General of Tax No. PER – 10/PJ/2018 on Locations for the Registration of
Taxpayers and/or Locations for Business Reporting by Taxable Businesses Including Major Tax Offices of
the Directorate General of Tax, Special Jakarta Tax Offices of the Directorate General of Tax and
Medium-Sized Tax Offices

Enforcement date: 6 April 2018


Summary:
• Sets out various locations for registrations and/or business reporting undertaken by taxpayers,
including the following tax offices: 1) Major tax offices of the Directorate General of Tax (“KPP”) (i.e.,
First Major KPP for mining businesses; Second Major KPP for industry, trade and financial businesses,
and so forth); 2) Special Jakarta KPP (i.e., Stock Exchange KPP, First KPP for Foreign Investment and so
forth); 3) Medium-Sized KPP (i.e., for certain large corporate taxpayers).
• Authorizes taxpayers to process the following tax duties at the abovementioned tax-office locations:
1) Income tax (PPh) for both corporations and individuals; 2) Value added tax (PPN) or luxury-goods
sales tax PPN (PPnBM); 3) Deductions and collections of PPh; and/or 4) Other indirect taxes.

31. Regulation of the President No. 40 of 2018 on the Overhaul of Tax Administration System

Enforcement date: 8 May 2016


Summary:

• Sets out the various scope of the overhaul of tax-administration system (“Overhaul”), including: 1)
Organizational matters (empowering duties and functions, as well as upgrades to the overall
organizational structure); 2) Human resources (increasing the quality, quantity and integrity of
employees, etc.); 3) Matters relating to laws and regulations (improving legal certainty, as well as
boosting tax revenues and the national economy); 4) Business operations (i.e., business simplification
and utilization of information technology); and 5) Information technology and data bases (i.e.,
development of accurate data, etc.).

• Procurements of goods and/or services for the purpose of contributing to the Overhaul are to be
implemented in accordance with the prevailing laws and regulations relating to government
procurement. However, exceptions will be granted for procurements relating to the following
matters, which are to be implemented based on this presidential regulation (“Special Procurement”):
1) Information systems; 2) Consultancy services (“Consultants”); 3) Procurement agents (“Agents”);
and 4) Other types of goods and/or services.

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• Sets out various methods for the selection of Special Procurement providers, including: 1) Two-stage
tender with prequalification stage, for the procurement of information systems; 2) Selection based on
the quality of “two cover” (kualitas dua sampul), for the procurement of corporate Consultants; 3)
Selection of individual Consultants; 4) Direct appointment, for the procurement of Agents or if a
tender/selection method fails); and 5) Direct procurement, for the procurement of individual
Consultants or other goods and/or services which amount to less than IDR 500 million.

General Corporate
32. Regulation of the Governor of the Special Capital City Region of Jakarta No. 30 of 2018 on Licensing for
Micro- and Small-Scale Businesses

Enforcement date: 19 April 2018

Summary:

• Allows micro- and small-scale businesses (“UMK”) to operate businesses in residential areas through
the available UMK licenses, provided that the following requirements are satisfied: 1) Form of
business: the business must be operated by incorporated and unincorporated entities/individuals; 2)
Capital requirements: a) Businesses must own total capital (excluding land and buildings) amounting
to IDR 500 million at the maximum and must have a business turnover that does not exceed IDR 2.5
billion, b) Businesses must employ 19 workers at the maximum, and c) Businesses must satisfy various
criteria which address the business sector and its activities; and 3) Location requirements: a) Fixed
premises (≤ 100m2) and non-fixed premises, b) Must comply with production and trading zones, c)
The business should be supplementary to the initial housing function of any residential property and
should thus only take up 30m2 or 20% of the total housing area.

• UMK licenses can be secured in the following stages: 1) Applicants should submit their applications to
the relevant One-Stop Integrated Service Unit at the sub-district level (“UP-PTSP”); 2) A technical
analysis should be undertaken by the relevant sub-district head (“Lurah”); 3) A recommendation then
will be issued by the Lurah; and 4) UP-PTSP should issue UMK licenses based on the relevant
recommendations.

• UMK licenses remain valid for five-year periods.

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33. Regulation of the Minister of Manpower No. 4 of 2018 on Procedures for the Imposition and Revocation
of Administrative Sanctions Relating to Certain Public-Service Access Restrictions for Employers Other
than the Government

Enforcement date: 11 April 2018


Summary:
• Employers will be subject to administrative sanctions in the form of written warnings, fines and/or
restriction of access to certain public services if they fail to fulfill their obligations in relation to social
security matters, as set out under the following laws and regulations: 1) Art. 15 (1-2) of Law No. 24
of 2011 on the Social Security Organizational Body; 2) Art. 3 (1) of Regulation of the Government No.
86 of 2013 on Procedures for the Imposition of Administrative Sanctions on Employers Excluding
State Officials, Certain Other Parties and Employers, Workers and Recipients of Social Security
Assistance; and so forth.
• Authorizes the BPJS to report employers who consistently fail to comply with their social-security
obligations, as set out under the abovementioned regulations, in spite of having already had
administrative sanctions imposed upon them in the form of restricted access to certain public
services offered by the relevant manpower supervisory agency.

34. Regulation of the Minister of Manpower No. 5 of 2018 on Occupational Health and Safety in Working
Environments

Enforcement date: 7 April 2018


Summary:
• Requires employers to satisfy various requirements relating to occupational health and safety in
working environments (Keselamatan dan Kesehatan Kerja Lingkungan Kerja – “K3”), which
encompass the following matters: 1) Control of physical and chemical factors, which should be under
certain threshold values; 2) Control of biological, ergonomic and physiological work factors in order
to comply with prevailing standards; 3) Provision of clean, healthy sanitary facilities and hygienic
equipment; and 4) Provision of K3 personnel who are competent and authoritative regarding K3.
• Mandates that employers satisfy K3 requirements through the implementation of the following
activities: 1) Taking of measurements and control over workspaces, including the following factors:
chemical, biological, etc.; and 2) Application of hygiene and sanitation measures in all office buildings,
health facilities, etc.
• Requires all workplaces to undergo examinations which address the following areas: 1) Work areas
which are exposed to various factors; 2) Indoor air quality; and 3) Sanitation and hygiene of
infrastructure and facilities.

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35. Circular of the Investment Coordinating Board No. 3/A.8/2018 on Arrangements for the Consultation
Services System for Licensing and Non-Licensing Matters, as well as the Submission of Non-Licensing
Applications to the Front Office of the Central One-Stop Integrated Service Facility at the Investment
Coordinating Board

Enforcement date: 2 February 2018


Summary:

• As of 20 February 2018, the Central One-Stop Integrated Service (PTSP) facility at the Investment
Coordinating Board (“BKPM”) has decreed that all inquiries relating to investment licensing and non-
licensing matters which were originally submitted to the Front Office (“FO”) are now to be submitted
online to: www.investindonesia.go.id.

• However, this online mechanism does not apply to the following consultation services: 1) Helpdesk;
2) Investment activity reports (LKPM); 3) The master list; 4) Complaints; and 5) BKPM liaison officers
for the relevant ministries/institutions.

• This online service mechanism only entitles applicants to submit single registrations for a single
consultation per day. The complete procedure involved in the making of inquiries via
www.investindonesia.go.id is as follows: 1) Log onto the website; 2) Select the “Invest with Us” menu;
3) Select the “BKPM Consultation” menu; and 4) Input the relevant personal data and fill out the
inquiry list.

• The time window for the online registration queue is 07.30 - 12.00 from Monday to Friday.
Meanwhile, consultations with the FO run from 08.00 - 15.00 from Monday to Friday, with a 15-
minute timeframe allocated per consultation.

36. Circular of the Minister of Manpower No. 2 of 2018 on the Payment of Religious-Holiday Allowances for
2018

Enforcement date: 8 May 2018

Summary:

• Both fixed-term (PKWT) and non-fixed-term (PKWTT) employees (including freelance employees)
who have already worked for a continuous one-month period or longer are entitled to receive the
Religious-Holiday Allowance (“THR”).

• Employees who have worked for a continuous 12-month period or longer are entitled to receive THR
amounting to one month’s wages. Meanwhile, THR for employees who have worked for longer than
one month but for less than 12 months should be calculated prorate according to the duration of the
period that they have worked.

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• THR should be paid at least seven days prior to the relevant religious holiday. Note that THR should
only be paid once in a given a year.

• Employees should check their employment agreements, company regulations, collective work
agreements or other aspects of their corporate culture to see if their companies have set a higher
amount of THR under the relevant industrial relations instruments.

37. Circular of the Minister of Manpower No. B.70/M.NAKER/PHIJSK-SES/V/2018 on the Implementation


of Joint Company Leave

Enforcement date: 8 May 2018

Summary:

• Establishes the following provisions relating to the implementation of joint company leave: 1) Joint
leave should be a part of employees’ annual leave; 2) The implementation of joint leave should be
facultative in nature and based on agreements between employers and employees/labor unions; 3)
Workers who take leave on joint-leave dates should have the dates deducted from their annual
leave; and 4) Workers who work on joint-leave dates should not have said dates deducted from
their annual leave and should be compensated accordingly.

Trade
38. Regulation of the Minister of Trade No. 54 of 2018 on the Revocation of Regulation of the Minister of
Trade No. 16 M-DAG/PER/3/2017 on the Trading of Refined Crystal Sugar through the Commodity
Auction Market, as amended several times, most recently through the issuance of Regulation of the
Minister of Trade No. 73/M-DAG/PER/9/2017 on the Second Amendment to Regulation of the Minister
of Trade No. 16 M-DAG/PER/3/2017 on the Trading of Refined Crystal Sugar through the Commodity
Auction Market

Enforcement date: 19 April 2018

Summary:

• After considering a recommendation made by the Corruption Eradication Commission (KPK), the
Minister of Trade (“Minister”) has now revoked the regulatory framework for the trading of refined
crystal sugar through the commodity auction market through the issuance of Regulation of the
Minister No. 54 of 2018 (“Regulation 54/2018”) on the Revocation of Regulation of the Minister No.
16 M-DAG/PER/3/2017 (“Regulation 16/2017”) on the Trading of Refined Crystal Sugar Through the
Commodity Auction Market, as amended several times, most recently through the issuance of
Regulation of the Minister No. 73/M-DAG/PER/9/2017 on the Second Amendment to Regulation
16/2017.

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• As a result of the issuance of Regulation 54/2018, traders in refined crystal sugar via the commodity
auction market were required to cease any trading in refined crystal sugar by 23 April 2018 and had
to complete any outstanding deliveries of refined crystal sugar by 30 April 2018.
• All future transactions and trading involving refined crystal sugar will be processed via the business-
to-business scheme (B2B), as was previously the case prior to the issuance of Regulation 16/2017.
• For more information, see ILB No. 3366.

39. Regulation of the Ministry of Trade No. 53 of 2018 on the Second Amendment to Regulation of the
Ministry of Trade No. 44/M-DAG/PER/7/2014 on Export Provisions for Tin

Enforcement date: 17 April 2018


Summary:

• Pure tin bars which are made from raw tin-ore sourced from holders of Contracts of Work (“KK”) are
no longer allowed to be exported, even if said KK has already secured clear-and-clean certification and
possesses work and budgeting plans (RKAB) which have been validated by the relevant authorities.
• Requires exporters to first secure registered exporters (exporter terdaftar – “ET”) documentation and
export approval (persetujuan ekspor - “PE”) prior to undertaking any activity involving the importation
of tin. In order to secure ET and PE documents, applicants are now required to submit electronic
applications via http://inatrade.kemendag.go.id and to upload scans of various required documents.
• Requires exporters to update information/data if any of the following information changes: 1)
Information stated in any PE – Pure Tin Bar and PE – Industrial Tin; 2) Changes of area relating to any
IUP for tin; and 3) Changes of data related to any ET – Pure Tin Bar and ET – Industrial Tin.
• For more information, see ILB No. 3362.

40. Regulation of the Minister of Trade No. 52 of 2018 on the Second Amendment to Regulation of Minister
of Trade No. 39/M/-DAG/PER/7/2014 on Provisions on Coal Exports and Coal Products.

Enforcement date: 17 April 2018


Summary:

• In order to be determined as registered exporters of coal (“ET-Batubara”), applicants are now required
to submit online applications via the official INATRADE website (http://inatrade.kemendag.go.id –
“Online System”) and to upload scans of original copies of the following documents: 1) Company
registration certificate (TDP); 2) Taxpayer identification number (NPWP); and so forth. However,
should the Online System be experiencing any technical difficulties, then the option is available for
applications to be submitted manually.
• Stipulates that any ET-Batubara determination letter which was issued prior to the issuance of this
regulation will remain valid until its expiration date.

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• Changes Appendix I to Regulation No. 39/M/-DAG/PER/7/2014 (“Regulation 39/2014”), which sets out
a list of coal and coal products which are limited in terms of export, with the Appendix to this Second
Amendment.

41. Regulation of the Minister of Trade No. 48 of 2018 on the Amendment to Regulation of the Minister of
Trade No. 82 of 2017 on Provisions for the Utilization of National Maritime Transportation and Insurance
for Imports and Exports of Certain Goods

Enforcement date: 10 April 2018


Summary:

• Authorizes exporters and importers of certain goods (i.e., coal, crude palm oil, etc.) to utilize services
which are offered by national shipping companies/consortiums of national shipping companies and
national insurance companies or consortiums of national insurance companies.
• Limits the scope of insurance companies to conventional insurance companies and sharia insurance
companies which have secured business licenses from the Financial Services Authority. Previously, the
scope of insurance companies included conventional insurance companies, sharia insurance
companies, reinsurance companies, sharia reinsurance companies, insurance brokers companies,
reinsurance brokers companies and insurance loss-appraisal companies.
• Removes the possibility for exporters/importers to utilize foreign insurance companies in the event
that national insurance companies are inadequate or are unavailable, thus exporters/importers are
obliged, with no exceptions, to utilize national insurance companies only.
• For more information, see ILB No. 3371.

42. Regulation of the Minister of Trade No. 47 of 2018 on the Fourth Amendment to Regulation of the
Minister of Trade No. 20/M-DAG/PER/4/2014 on the Control and Oversight of the Procurement,
Distribution and Sale of Alcoholic Beverages

Enforcement date: 6 April 2018


Summary:

• Requires applications for the appointment of Registered Alcoholic Beverages Importers (Importir
Terdaftar Minuman Beralkohol – “IT-MB”) to be submitted online via the INATRADE official website
(http://intrade.kemendag.go.id).
• Sets different application requirements for the securing of import approvals for alcoholic beverages
for which sales involve duty paid and for alcoholic beverages for which duty is not paid, as follows: 1)
Duty Paid: a) IT-MB appointment; b) Import plan; c) Distribution plan; and 2) Duty Not Paid:
Distribution plans to duty-free shops (this can only be applied by appointed state-owned enterprises).
• Prohibits individuals from bringing/sending alcoholic beverages into Indonesia from overseas, except
for the following purposes: 1) Personal consumption in amounts of less than 1000 ml per person and

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with packaging content amounting to no less than 180 ml; and 2) As sample products for laboratory
research purposes.
• Mandates that all appointed IT-MB should submit reports on the realization of import and distribution
activities on a quarterly basis to the Directorate-General of Foreign Trade, with copies also being sent
to the Directorate-General of Domestic Trade and to the Directorate-General of Consumer Protection
and Trade Compliance.
• For more information, see ILB No. 3374.

43. Regulation of Minister of Trade No. 42 of 2018 on the Fifth Amendment to Regulation of Minister of
Trade No. 87/M-DAG/PER/10/2015 on Import Provisions for Certain Products

Enforcement date: 6 April 2018


Summary:

• Adds one new eligible seaport for conducting importation of certain products, namely Merak Mas
seaport in Cilegon. Previously, importation of certain products may only be conducted through the
following ten seaports only: 1) Belawan in Medan; 2) Tanjung Priok in Jakarta; 3) Tanjung Emas in
Semarang; 4) Tanjung Perak in Surabaya; 5) Soekarno Hatta in Makassar; 6) Dumai in Dumai; 7)
Jayapura in Jayapura; 8) Tarakan in Tarakan; 9) Krueng Geukuh in North Aceh; and 10) Bitung in Bitung.

Miscellaneous
44. Regulation of the Government No. 13 of 2018 on Research, Engineering and the Development of
Meteorological, Climatological and Geophysical Industries

Enforcement date: 18 April 2018

Summary:

• Two types of research involving meteorology, climatology and geophysics (“MCG”) are available,
specifically basic research and applied research. These types of research may be undertaken by the
following parties (“Parties”): 1) The Agency for Meteorology, Climatology and Geophysics (“BMKG”);
2) Research and development institutions; 3) Universities; 4) Indonesian legal entities; and/or 5)
Indonesian nationals. The results of all MCG research should be operationally tested and validated
by BMKG.

• MCG engineering encompasses activities which involve the modification of MCG elements and the
development of MCG facilities. Such engineering may be undertaken by Parties and said Parties
should comply with the relevant standards.

• The development of the MCG industry is to be achieved through the following methods: 1) Creation
of new MCG means for the purpose of variety; and/or 2) Increasing the value of existing MCG means
for the purpose of effectiveness and efficiency.

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45. Regulation of the Government No. 11 of 2018 on Procedures for the Implementation of Remote Sensing
Activities

Enforcement date: 11 April 2018

Summary:

• Remote-sensing activities are to be implemented through the following activities: 1) Data collection
through the use of the following methods: a) Operation of satellites, b) Operation of earth stations,
and/or c) Satellite imagery; 2) Data processing involving the processing of primary data into
information analysis; 3) Data retention and distribution in accordance with the relevant license
agreement; and 4) Data utilization by government-related parties and/or the general public, as well
as the dissemination of information to the relevant users.

• Satellite operations and the operation of earth stations can only be undertaken by the National
Institute of Aeronautics and Space (“LAPAN”). Meanwhile, satellite imagery can be gathered by both
LAPAN and other parties.

• Data resulting from remote sensing which are subsequently processed are to be used in order to: 1)
Identify environmental issues; 2) Analyze methods of disaster mitigation; 3) Analyze the dynamic,
physical and chemical composition of the atmosphere.

46. Regulation of the President No. 38 of 2018 on the 2017 - 2045 National Research Master Plan

Enforcement date: 18 April 2018

Summary:

• The Indonesian National Research Master Plan (“Master Plan”) encompasses research into the
following sectors: 1) Food; 2) Energy; 3) Health; 4) Transportation; 5) Engineered products; 6) Defense
and security; 7) Maritime affairs; 8) Society and humanity; and 9) Other sectors, as decreed by the
Minister of Research, Technology and Higher Education.

• The ultimate goal of the Master Plan is the annual publication of 22 international scientific publications
per 100 academics by 2045. In terms of impact indicators, it is predicted that multi-factor productivity
will reach 70% by 2045.

• The Master Plan is divided into the following six periods, each with different priorities: 1) 2017 - 2019:
applied research based on natural resources; 2) 2020 - 2024: advanced research based on natural
resources; 3) 2025 - 2029: applied manufacturing; 4) 2030 - 2034: advanced manufacturing; 5) 2035
- 2039: high-technology research; and 6) 2040 - 2044: highly advanced pioneering research.

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47. Regulation of the President No. 37 of 2018 on the Implementation of the 2017 – 2041 Meteorology,
Climatology and Geophysics Master Plan

Enforcement date: 18 April 2018

Summary:

• The meteorology, climatology and geophysics (“MSG”) master plan will serve as a set of guidelines
for the utilization of a number of basic areas (e.g., natural resources, human resources, geographical
locations, etc.) and is being aimed at improving the organization of MSG (e.g., observation, data
processing, services, etc.) over the course of the 2017 – 2041 period.

• Sets out 14 indicators which are included as part of the MSG organization roadmap, including: 1)
Development of MSG observatories and infrastructure; 2) Improvement of the performance of MSG
observatories; 3) Development of observatory systems; 4) Establishment and development of the
Calibration and Maintenance Integration System (“SIKAP”); 5) Improvement of the competence of
human resources within the MSG sector; and so forth.

48. Regulation of the President No. 33 of 2018 on the Amendment to Regulation of the President No. 75 of
2015 on the 2015 - 2019 National Human Rights Action Plan

Enforcement date: 11 April 2018

Summary:

• Amends the responsibilities and duties of the Joint Secretariat for the National Human Rights Action
Plan (“RANHAM”), particularly in relation to its coordination mechanism.

• Establishes the Human Rights Action Plan (“Plan”) for ministries, institutions and regional
governments, which will address: 1) Optimization of the implementation of the Plan within certain
regions; 2) Deliberations of the ratification of the Convention Against Enforced Disappearances; 3)
The right of migrant workers to information during pre-departure periods; 4) Cooperation with the
United Nations regarding the fulfillment of the right to food; 5) Formulation of disability-friendly
policies; and so forth.

49. Regulation of the President No. 21 of 2018 on the 2015 – 2019 National Strategy for the Acceleration
of the Development of Underdeveloped Regions

Enforcement date: 2 April 2018

Summary:

• The National Strategy for the Acceleration of the Development of Underdeveloped Regions
(“STRANAS-PPDT”) is a national five-year development plan which is aiming to synchronize policies

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and programs relating to the acceleration of the development of underdeveloped Indonesian


regions.

• Sets three STRANAS-PPDT indicators, specifically: 1) Human development; 2) Economic growth; and
3) Poverty reduction.

• Under STRANAS-PPDT, each region will follow its own development priorities, as follows: 1) Papua:
the commodity industry; 2) Maluku: seafood production; 3) Nusa Tenggara: eco-tourism; 4) Sulawesi:
international trade; 5) Kalimantan: environmental conservation; 6) Java: food security; and 7)
Sumatra: biomass energy.

50. Joint Decree of the Minister of Religious Affairs, Minister of Manpower and Minister of State Apparatus
Empowerment and Bureaucratic Reform No. 223, 46, 13 of 2018 on the Amendment to Joint Decrees
of the Minister of Religious Affairs, Minister of Manpower and Minister of State Apparatus
Empowerment and Bureaucratic Reform No. 707 of 2017, No. 256 of 2017 and No. 01/SKB/MENPAN-
RB/09/2017 on National Public Holidays and Joint Leave for 2018

Enforcement date: 18 April 2018

Summary:

• Adds three additional days to the period of Eid al-Fitr joint leave, specifically 11, 12 and 20 June 2018.

51. Regulation of the Minister of Finance No. 40/PMK.04/2018 on Recordation, Detention, Guarantees,
Temporary Suspensions, Monitoring and Evaluation for the Control of Imported or Exported Goods
Which Are Suspected of Resulting or Originating from Infringement of Intellectual Property Rights

Enforcement date: 15 June 2018

Summary:

• Allows legitimate owners or intellectual property rights (“IPR”) holders (“Legitimate Parties”) to
record their protected intellectual property rights with the Directorate-General of Customs and
Excise as a basis upon which officials can subsequently detain or suspend the release of any
exported or imported goods which are alleged to have infringed IPR (“Infringing Goods”).

• Any Infringing Goods will be detained by Customs and Excise officials and a notification will be sent
to Legitimate Parties. Legitimate Parties may then opt to: 1) File a temporary-suspension-of-release
application at the commercial court and deposit a bank/insurance guarantee of IDR 100 million; or
2) Not file a temporary-suspension-of-release application, meaning that the relevant goods will thus
be settled in accordance with the prevailing customs and excise regulations.

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• Temporary suspensions cannot be imposed upon any goods which are not intended for commercial
use and which are carried by means of: 1) Passenger luggage; 2) Goods which are in possession of
transporter crews; 3) Goods which are in possession of border crossers; or 4) Shipped goods.

52. Regulation of the Minister of Law and Human Rights No. 13 of 2018 on Official Translations of Laws and
Regulations

Enforcement date: 16 April 2018

Summary:

• Authorizes government parties (e.g., ministers, heads of government institutions, etc.) to apply for
official translations of laws and regulations to the Minister of Law and Human Rights via the Director
General of Laws and Regulations (“Director-General”).

• Sets out the complete procedure that should be followed when applying for official translations from
the Director-General, as follows: 1) Application submission; 2) Clarification process undertaken by the
Director-General; 3) Translation process; 4) Draft approval by the applicants; and 5) Delivery of official
translation to the applicants.

• Requires applications for official translations to outline the following information: 1) The reason for
the urgent need for an official translation (e.g., in order to support the business sector, etc.); 2) Copies
of the relevant laws and regulations which have been enacted; 3) The underlying concept behind the
requested official translation.
• Requires copies of official translations to be delivered to applicants within seven days of them being
signed and also for said translations to be uploaded to the information system for laws and
regulations, as managed by the Director-General.

• For more information, see ILB No. 3359.

53. Regulation of Governor of The Special Capital Region of Jakarta No. 37 of 2018 on the Organization of
Periodic Testing by Auto-Repair Shops Owned by Trademark Holder Agents or by the Private Sector

Enforcement date: 20 April 2018

Summary:

• Sets out various requirements for auto-repair shops owned by trademark holder agents or non-
trademark holder agents/the private sector (“Repair Shops”) regarding the organization of periodic
testing, including: 1) Must have secured approvals and validations relating to the construction of
facilities and equipment; 2) Must have been appointed as the organizers of periodic testing; and 3)
Must have been evaluated as a periodic testing organizer for at least two years since the appointment
date.

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• Periodic testing can only be organized by Repair Shops for the purpose of extending vehicle validity
periods. Furthermore, Repair Shops are also required to employ human resources who are in possession
of competence certification and technical qualifications issued by the Ministry of Transportation prior to
implementing any periodic testing.
• Sets out several requirements that must be satisfied by Repair Shops after being appointed as organizers
of periodic testing, including: 1) Must organize periodic testing in accordance with the relevant
accreditation, competence and procedures; 2) Must formulate and submit plans and periodic reports to
the Directorate General of Land Transportation and to the Head of the Transportation Agency, etc.

54. Decree of the President No. 9 of 2018 on the 2018 Program for the Formulation of Regulations of the
Government

Enforcement date: 3 May 2018


Summary:

• Establishes a list containing 43 Draft Regulation of the Government (“Draft Regulations”) which are being
targeted for issue in 2018 and which encompass the following business sectors: 1) Trade; 2) Taxation; 3)
Excise; 4) Energy; 5) Intellectual property; 6) Immigration; 7) Health; 8) Manpower; 9) Construction; and
10) Industry.

• Authorizes the Minister of Law and Human Rights to verify and supervise the realization progress of Draft
Regulations and to report said realization progress to the President.

• For more information, see ILB No. 3372.

55. Regulation of the Minister of Finance No. 43/PMK.03/2018 on Accounting Policy for Write-offs of
Expired Tax Receivables

Enforcement date: 4 May 2018

Summary:

• Determines that expired tax receivables can no longer be collected and will thus be written-off
(dihapusbukukan) from reports of the Ministry of Finance and must be disclosed appropriately in
accordance with Government Accounting Standards.
• Expired tax receivables which have been written-off will still be managed until after the commencement
of the relevant haircut (penghapustagihan) and should subsequently be appropriately disclosed in the
notes to the haircut-period financial statement.

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56. Regulation of the Minister of Transportation No. PM 40 of 2018 on the Usage of Air Balloons at
Community Cultural Activities

Enforcement date: 9 May 2018

Summary:

• Sets out several requirements for the usage of air balloons at community cultural activities (i.e.
cultural festivals, annual community festivals and other local cultural customs), including: 1) Air
balloons must be anchored to the ground; 2) Reports on the usage of air balloons must be submitted
in the form of an activity plan; 3) Balloons must be strikingly colored; 4) The maximum diameter of air
balloons is 4 m by 7 m in height; 5) Air balloons may only be used within unrestricted airspace up to
maximum heights of 150 m; 6) Appropriate tools for the usage of air balloons must be employed,
including at least three attached anchor ropes and strictly no inflammable tools; 7) Air balloons may
only be used in locations containing a minimum amount of obstacles and no significant hazards; and
8) Air balloons may only be operated in suitable weather (i.e., on sunny days).

57. Regulation of the Minister of Transportation No. PM 34 of 2018 on Traffic Controls for Transportation
during the 2018 Eid al-Fitr Holiday

Enforcement date: 26 April 2018

Summary:

• Sets out several new traffic rules for the 2018 Eid al-Fitr holiday, including the following three
following measures: 1) Restrictions on the operation of cargo vehicles, including: a) Cargo vehicles of
≥ 14,000 kg, ≥ three-axle and towing trailers, and b) Cargo vehicles which are used to transport
industry materials (i.e., iron, cement and timber); 2) Temporary shutting down of motor vehicle weigh
station units (UPPKB) throughout the Java and Bali areas; and 3) Traffic engineering (if necessary).

• Restrictions on cargo vehicles should be implemented as follows: 1) Timeframes: 12 - 14 June 2018


(00.00 – 24.00) and 22 - 24 June 2018 (00.00 – 24.00); and 2) Locations: toll roads (e.g., Jakarta-Merak,
Purwakarta-Bandung-Cileunyi, etc.) and national roads (e.g., Pandaan-Malang, Probolinggo-
Lumajang, etc.).

• The above restrictions do not apply to cargo vehicles which are transporting: 1) Fuel; 2) Livestock; 3)
Postal and money services; 4) Basic foods; and 5) Motorcycles for use at homecoming events.

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