Laws & Proposals That May Affect Business and Economic Activities

For the new following laws and proposals, it is noteworthy to see how the development may affect business and economic activities:

1. The Institute of Indonesia Chartered Accountants (Ikatan Akuntan Indonesia) has been proposing for the Draft Bill on Financial Reporting to be included in the Priority National Legislative Program (Prolegnas). The Draft Bill contains provisions on who shall be obliged to be reporting entities under the regulation, the scope and parameters of financial reports, a Financial Reporting Authority, the Financial Accounting Standards Board and the Accountancy Profession Association, users and recipients of financial reports, and sanctions for breaches under the regulation.
2. The Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal, ‘BKPM’) has been preparing a Draft Regulation on the Guidelines for the Implementation of Electronically Integrated Business Licensing Services. The Draft Regulation is intended to impose standards on relevant licensing requirements within the online licensing services. The process under the Draft Regulation would include a process whereby businesses that require infrastructure for their operations shall commit to acquiring relevant permits, licenses, and documentation, if they have not done so.
3. The Indonesia Financial Services Authority (Otoritas Jasa Keuangan, ‘OJK’) has issued OJK Circular No. 15/SEOJK.05/2019 on the Reassessment of Primary Parties of Non- Bank Financial Institutions, which provides for the reassessment of primary parties of non-bank financial institutions as parties who own, manage, supervise, and/or have significant influence over such financial institutions, including: Boards of Directors and Boards of Commissioners (among others) of insurance companies, pension funds of employers, financing companies, guarantee institutions, venture capital companies, and pawn broker companies; managers of pension funds of financial institutions; and controlling interests as well as controlling shareholders for companies and guarantee institutions. The reassessment involved shall focus on the integrity, financial expedience issues, financial reputation, and/or competence issues involving controlling primary parties and managing primary parties.
4. The Regulation of the President No. 55 of 2019 on the Acceleration of Battery-Powered Electric Motor Vehicles for the Road Transportation Program has been issued, which includes provisions on the planned transition to battery-powered electric motor vehicles. Such provisions include the types of such vehicles, namely two or three-wheeled vehicles and four-wheeled or more electric motor vehicles; the local electric motor vehicle industry and imports of electric motor vehicles, incentives, required infrastructures, tariffs on electric power for electric motor vehicles, and technical requirements.
5. The Minister of Agrarian Affairs and Spatial Layout/Head of the National Land Agency has issued Regulation No. 7 of 2019, which amends Regulation No. 3 of 1997 on the Implementation of the Provisions of Government Regulation No. 24 of 1997 on Land Registrations. The amendments specifically adds provisions on the use of electronic documents, systems, and signatures in relation to Deeds prepared by Land Deed Officials (Pejabat Pembuat Akta Tanah, ‘PPAT’); Land Books; Certificates for land rights, land management rights, wakaf land, strata titles, and mortgages; and the administration of land registration data as well as documents.
6. The Supreme Court has issued Regulation No. 1 of 2019 on the Administration of Cases and Legal Proceedings in Courts via Electronic Means, which provides for the electronic administration of court procedures, as well as the use of Information Technology innovations in the examination and adjudication of litigation cases, which shall include civil, religious, military, and administrative cases. The electronic system shall be accessible both to lawyers of parties as well as to parties and their proxies.
7. The Supreme Court has also issued Regulation No. 4 of 2019, which amends Regulation No. 2 of 2015 on Procedures for the Resolution of Small Claims Lawsuits. The amendment provides for several matters, including:
   • increasing the maximum threshold for material claims which may be demanded
   • from IDR 200 million to IDR 500 million;
   • allowing plaintiffs who do not reside in the same jurisdiction as the defendant to file a suit, provided it is filed through his/her proxies, incidental proxies, or representatives;
   • administration of cases through the e-court system;
   • ability for defendants to challenge verstek (in absentia decisions) decisions by filing for verzet (challenge of the in-absentia decision) by no later than seven days after the granting of such decisions;
   • ability to seize defendants’ assets or plaintiffs’ assets currently in possession of
   • defendants; and
   • ability for head of relevant district court in a small claims case to issue an aanmaning (reprimand) for the execution of a decision relating to such case.