Bank Indonesia Circular No. 17/11/DKSP on Mandatory Use of Rupiah in Indonesia

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Judul Bank Indonesia Cicular No. 17/11/DKSP dated 1 June 2015 concerning Mandatory Use of Rupiah within the Territory of the Republic of Indonesia

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Regulation

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Bank Indonesia Circular No. 17/11/DKSP dated 1 June 2015 concerning Mandatory Use of Rupiah within the Territory of the Republic of Indonesia

Date

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1 June 2015

This Bank Indonesia Circular (SEBI) is SEBI No. 17/11/DKSP dated 1 June 2015 concerning Mandatory Use of Rupiah within the Territory of the Republic of Indonesia.

The SEBI has been issued in view of the necessity to enact provisions for implementing Bank Indonesia Regulation Number 17/3/2015 concerning Mandatory Use of Rupiah within the Territory of the Republic of Indonesia (State Gazette of the Republic of Indonesia Number 70 of 2015, Supplement to the State Gazette of the Republic of Indonesia Number 5683).

Mandatory use of Rupiah within the territory of the Republic of Indonesia is based on the principle of territoriality. All transactions within the territory of the Republic of Indonesia, whether by residents or non-residents, in cash or in non-cash transactions, as long as they are conducted within the territory of the Republic of Indonesia, must use Rupiah.

Transactions and payments constitute an integral part. When a transaction is conducted in the territory of the Republic of Indonesia, payment must also be received in the Indonesian Rupiah.

Mandatory use of the Indonesian Rupiah in all transactions does not apply to transactions as follows:

particular transactions for implementing the state budget;

receiving or providing grants from or to abroad in which one of the parties is domiciled abroad;

international commercial transactions;

deposits held at Banks in foreign currency, such as foreign currency savings deposits or foreign currency time deposits; or

international financing transactions in which one of the parties is domiciled abroad, such as lending by bank outside Indonesia to a customer in Indonesia.

Mandatory use of Rupiah in all transactions does not apply to funds transfers in foreign currencies from individuals in Indonesia to overseas parties that are not intended for payment or settlement of obligations incurred by transactions within the territory of the Republic of Indonesia.

Similarly, mandatory use of the Indonesian Rupiah in all transactions does not apply to transactions conducted in foreign currency based on legislative provisions, consisting of:

Business activities in foreign currency conducted by banks on the basis of the laws governing the banking activities and sharia banking activities;

Transactions on the primary market and secondary market for foreign currency securities issued by the Government pursuant to the laws governing government securities and sharia-compliant government securities.

Other transactions in foreign currency that are conducted on the basis of laws.

All parties are prohibited from declining to accept Rupiah presented for the purpose of payment or for settlement of obligations that must be fulfilled in Rupiah and/or for other financial transactions within the territory of the Republic of Indonesia. These provisions are waived in the following instances:

the authenticity of Rupiah received for a cash transaction is in doubt; or

payment or settlement of obligations in foreign currency that is contractually agreed in writing for exempted transactions and strategic infrastructure products that have obtained approval from Bank Indonesia for exemption from mandatory use of Rupiah.

To support the implementation of mandatory use of Rupiah, every business undertaking, whether individual or corporate, must quote prices for goods and/or services only in Rupiah and is prohibited from quoting prices for goods and/or services simultaneously in Rupiah and in foreign currency (dual quotation).

Bank Indonesia has the authority to request reports, information and/or data from any party concerned with implementing the mandatory use of Rupiah and mandatory quotation of prices for goods and/or services in Rupiah.

Bank Indonesia will perform on-site examination and off-site supervision to oversee the compliance of all parties in upholding the mandatory use of Rupiah and mandatory quotation of prices for goods and/or services in Rupiah. On-site examinations will take place in inspections that may be carried out at any time by Bank Indonesia. Off-site supervision will take place in analysis and evaluation of reports provided by all parties concerned.

In the event that business undertaking with particular characteristics experience problems in relation to implementation of mandatory use of Rupiah for non-cash transactions, Bank Indonesia may adopt specific policies without neglecting the mandatory use of Rupiah. In adopting such specific policies, Bank Indonesia will consider factors including but not limited to the readiness of business undertaking, continuity of business, investment and or business activity with significant impact on national economic growth, and also take account of the compliance of the business undertaking with Bank Indonesia regulations, including but not limited to the mandatory receiving of export proceeds and application of prudential principles in management of non-bank corporate external debt.

Applications and report submissions and/or correspondence shall be conveyed to Bank Indonesia in the Indonesian language at the following address: Department of Payment System Policy and Oversight Bank Indonesia Office Complex Building D 5th Floor Jl. M.H. Thamrin No. 2 Jakarta 10350. If the above address changes, Bank Indonesia will inform by letter and/or other media.

Any party infringing the mandatory use of Rupiah within the territory of the Republic of Indonesia shall be liable to sanctions, subject to the following provisions:

Infringement of mandatory use of Rupiah for cash transactions and/or prohibition on declining Rupiah for cash transactions shall be liable under the criminal provisions referred to in Article 33 of Act Number 7 of 2011 concerning Currency.

Sanctions for infringement of mandatory use of Rupiah for non-cash transactions shall be imposed as administrative sanctions in the form of:

written warning;

financial penalty prescribed at 1% (one percent) of the transaction value, subject to a maximum penalty of Rp 1,000,000,000.00 (one billion rupiahs); and/or

prohibition from participation in payments transaction.

Any infringement of mandatory quotation of prices for goods and services in Rupiah and of obligations to submit report, information and/or data shall be liable to administrative sanctions in the form of written warning.

The following provisions apply to written agreements made before 1 July 2015 for payment or settlement of obligations in foreign currency:

Written agreement encompasses main agreement, ancillary agreement or other document specifying the transaction to be conducted by the parties.

Any written agreement comprising a derivative or implementation of a master agreement made after 1 July 2015 or treated as an independent agreement shall be subject to the provisions governing mandatory use of the Indonesian Rupiah within the Territory of the Republic of Indonesia.

Any extension of term and/or amendment to a written agreement executed after 1 July 2015 shall be subject to the provisions governing mandatory use of the Indonesian Rupiah within the Territory of the Republic of Indonesia. Such amendment to written agreement includes but is not limited to the parties in the agreement, prices of goods and/or services and/or subject of the agreement.

This Bank Indonesia Circular entered into force on 1 June 2015.

Lampiran Attachments

Lampiran 1 Bank Indonesia Cicular No. 17/11/DKSP

Lampiran 2 Frequently asked question Bank Indonesia Cicular No. 17/11/DKSP

Lampiran 3

Lampiran 4

Lampiran 5

Lampiran 6

Lampiran 7

Lampiran 8

Lampiran 9

Lampiran 10

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Halaman ini terakhir diperbarui 1/27/2021 9:14 PM

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