Bank Indonesia (the Indonesian central bank) has issued a regulation and accompanying circular letter governing the mandatory use of rupiah for all cash and non-cash transactions. In prescribing the mandatory use of rupiah – with certain exemptions and special considerations – the regulation and circular letter apply the territoriality principle that underlies many of Bank Indonesia's other regulations.
The new Currency Law is likely to have a major impact on Indonesia's payment systems and in the fields of trade and finance due to its requirements regarding the use of rupiah for payments. Its controversial prohibition of foreign currency for domestic payments appears to catch Indonesian subsidiaries and branches of foreign companies, including foreign-owned companies and bank branches.
The Financial Services Authority (OJK) recently amended public companies' obligation to report on their shareholding by way of OJK Regulation 11/POJK.04/2017 regarding Reporting on Public Company Ownership or on Every Change in Share Ownership. The regulation aims to bring public companies' reporting obligations in line with international standards.
The Business Competition Supervisory Commission has been increasingly active in rendering decisions in response to complaints under the Anti-monopoly Law. However, the enforcement of rulings against companies remains problematic, as demonstrated by the unsuccessful attempts to enforce convictions against retailer PT Carrefour Indonesia and state telecommunications firm PT Telekomunikasi Indonesia.
The Business Competition Supervisory Commission has found PT Suracojaya Abadi Motor, the main dealer in Yamaha motorcycles in South Sulawesi, to have conducted discriminatory practices which breached the Anti-monopoly and Unfair Business Competition Law.
The Business Competition Supervisory Commission recently found against both the distribution unit of the state electricity company and the company which it directly appointed to a project without following a tender process. However, the commission's majority and dissenting opinions are both open to criticism.
The Business Competition Supervisory Commission recently found that PT Perusahaan Gas Negara, the state-owned gas company, had discriminated against applicants in the tender process for the construction of a gas pipeline. The commission has been commended for looking beyond the formalities of the tender and observing the actual processes involved in it.
The Business Competition Supervisory Commission recently cleared Berlian Jasa Terminal Indonesia of allegations of tender rigging in the procurement of services for operating harbour cranes and gantries in the port of Surabaya. The commission made clear the grounds for its findings, but certain aspects of its conclusions are surprising.
The Business Competition Supervisory Commission has found Indonesia's leading cement producer guilty of price fixing and distributor restriction practices which breach the Anti-monopoly and Unfair Business Competition Law. The case differed from most such investigations in that no complaint was filed by the company's business rivals; the commission conducted the investigation on its own initiative.
The issue of double tax treaties continues to keep Indonesia in the international spotlight. Two recent circular letters from the Directorate General of Taxation amend the rules on the implementation of double tax treaty agreements and introduce provisions on anti-avoidance in order to combat treaty shopping.
Indonesia is home to a significant number of local subsidiaries of foreign conglomerates. As the financial crisis has hit these conglomerates in their jurisdictions of establishment, companies should be aware of how a foreign insolvency could affect Indonesian companies and how Indonesian assets of the corporate group could be included in a global restructuring.
Indonesia's new bankruptcy legislation came into force in October 2004. The previous bankruptcy regime was based in part on the Bankruptcy Ordinance 1906, which was drafted in Dutch and had no official Indonesian translation. The latest law is a new piece of legislation, written in Indonesian, that replaces the previous laws in their entirety.