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Regulations on FX from Export and Import Activities Renewed

Foreign exchange (“FX”) is one source of funding that is relatively stable and sustainable. It supports the stability of Indonesian lawful currency, Rupiah, which is imperative for national economic development. The regulatory body of foreign exchange is Bank Indonesia (“BI”), which recently renewed the regulations on FX derived from exports and imports under BI Regulation No. 21/14/PBI/2019 on FX Derived from Exports and Imports (“FX Regulation”) effective on November 29, 2019.

The renewed FX Regulation covers FX derived from both general exporters and natural resources exporters whereas, previously they are governed under different regulations. The FX Regulation replaces the previous regulations, namely (a) BI Regulations No. 16/10/PBI/2014 on Foreign Exchange Derived from Exports and Offshore Loan Disbursement (as amended) (“PBI 16/2014”), (b) and BI Regulation No. 21/3/PBI/2019 on FX Derived from Exports that comprise of the Business, Management and/or Processing of Natural Resources (“PBI 21/2019”). However, the provisions on reporting of FX (a) under PBI 16/2014 are still applicable for FX received up to December 31, 2019; and (b) under PBI 21/2019 are still applicable until for FX received until December 31, 2020.

In essence, the FX Regulation provides the requirements and obligations on FX in relation to export and import activities. The parties that are subject to the FX Regulation includes exporters, importers and Indonesian foreign-exchange licensed banks located in Indonesia (the “Bank”).

Exporters’ Obligations

The same as PBI 16/2014, the FX Regulation also requires that all FX derived from exports must be deposited in Banks. The deposit must be made at the end of the third month after the date of the export declaration. The amount of the FX that is deposited must match the export value. If the difference between the FX reported and the export value is more than fifty million Rupiah or its equivalent, then it will be considered as unmatched and the exporter must provide documents to justify the difference.

If the FX is received through a telegraphic transfer, exporters must inform the export information to the buyer to be stated in the financial transaction messaging system (“FTMS”) by the offshore banks. However, if the FX is received through a non-telegraphic transfer method, the exporters must inform the same to the Bank (the Bank will then pass the information on to Bank Indonesia). If exporters should change any information in the export declaration, it must submit revision request to the Directorate General of Customs and Excise (“DGCE”).

The FX Regulation distinguishes between general exporters and natural resources, including oil and gas, exporters. For any FX derived from natural resources exports, the FX must be deposited in a special account in a Bank (“Special Account”). The Special Account may be opened in one or more Bank. When opening the account, the natural resources exporter must provide (a) supporting documents that show that the export is a result of their business, management and/or processing of natural resources; and (b) a statement letter confirming that the exporter is a natural resources exporter.

Note that the FX maintained in the Special Account may be transferred to another account for payment of duties and other export levies, loans, imports, profits sharing or dividends, and/or any different needs concerning capital investment in accordance with Indonesian capital investment law. The Bank must ensure that the fund received in the Special Account belongs to the same exporter before processing the transfer of amount out of the Special Account by checking the supporting documents. The Bank must also report the activities to BI.

Importers’ Obligations

Importers must report the FX they have generated from import transactions to Bank Indonesia by the end of the third month after the date of the import declaration. The report comprises information on (a) imports paid through telegraphic transfer; (b) imports paid through non-telegraphic transfer; (c) change of information on the import duty declaration; (d) change of information on FX from imports; and/or (e) FX from imports that is not processed through Banks.

The FX amount that importers report to BI must match the import value. If the difference between the FX from imports and the import value is not more than five percent, then the reported amount will be considered as matched. If likewise, then the importer must submit supporting documents to justify the difference.

Banks’ Obligations

Not only stricter the FX requirements for exporters and importers, the FX regulation also provide certain rules for the Banks. The rules include requiring Banks to accept only FX to the exporters’ account if the information required for the telegraphic transfer is complete.

Whether it is for export or import purposes, Banks must submit an online report to Bank Indonesia for any transaction that does not use telegraphic transfer. The report must be sent on the fifth day of the following month after the export/import declaration date and/or the FX receipt.

In addition, Banks must also ensure that the funds transferred into the Special Account comes from the export activities, disbursement of a time deposit or fund from another Special Account of or registered under the name of the exporter.

Bank Indonesia Roles

Bank Indonesia supervises and investigates the implementation of the FX Regulation, which will then be reported to the relevant authorities.

Sanction

Note that a non-compliance with the obligations under the FX Regulation will be subject to administrative sanctions, including administrative fines, export or import prohibitions.

 

January 13, 2020

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