“Offshore Loans must be reported to Bank Indonesia.”
In regard to supporting and/or expanding a business, some entrepreneurs borrow funds from abroad to cover the costs they need. The borrowing of funds from abroad is included in the activities of Foreign Exchange Traffic, so it needs to be reported to the competent authority, which is Bank Indonesia. This Offshore Loan is regulated in Bank Indonesia Regulation Number 21/2/PBI/2019 concerning Reporting of Foreign Exchange Traffic Activities (“PBI 21/2019”) and Regulation of Members of the Board of Governors Number 21/4/PAD/2019 on the Activity Report for Foreign Exchange Traffic in the Form of Offshore Loans and Risk Participation Transaction has been amended by a Regulation of Members of the Board of Governors Number 23/28/PADG/2021 on the Change of the of Members of the Board of Governors Number 21/4/PAD/2019 on the Activity Report for Foreign Exchange Traffic in the Form of Offshore Loans and Risk Participation Transaction (“PADG”).
1. Definition of Offshore Loan
Based on Article 1 number 5 of PBI 21/2019 and Article 1 number 4 of PADG, definition of Offshore Loan is Residents’ debts to non-residents in Foreign Currency and/or Rupiah, including financing based on sharia principles.
2. The Amount of Offshore Loan That Must Be Reported
Based on Article 10 of PADG, the regulation regarding the Amount of Offshore Loan that needs to be reported is divided based on the party reporting it.
In the event that the Reporting Party is a Bank, non-bank financial institution, non-financial business entity, and other entity, the report is submitted for all Offshore Loans without minimum Offshore Loan amount.
Meanwhile, for the individual Reporting Party, the report is submitted for an Offshore Loan with a minimum value of USD200,000 (two hundred thousand United States Dollars) or its equivalent. For the individual Reporting Party that has several Offshore Loans with a position value of less than USD200,000 (two hundred thousand United States Dollars) or its equivalent for each Offshore Loan, an Offshore Loan is eligible to be reported if the total Offshore Loan position has reached USD200,000 (two hundred thousand United States Dollars) or its equivalent.
3. Offshore Loan Reporting Type
Based on Article 3 and explanation of Article 3 of PADG, the Offshore Loan Report is divided into Primary Reports on Offshore Loans and/or Risk Participation Transaction, Report on the Offshore Loans and/or Risk Participation Transaction data recapitulations, and Reports on the new Offshore Loans and its amendment.
For Offshore Loans that have been realized, things that need to be reported are the Offshore Loan main data and Offshore Loan recapitulation data which contain:
a. plan for withdrawal and/or payment of Offshore Loan, including information regarding the planned date of withdrawal of the Offshore Loan and the value of the Offshore Loan payment plan;
b. realization of withdrawal and/or payment of Offshore Loan, including information regarding the realization date of Offshore Loan withdrawal and the realization value of Offshore Loan payment; and
c. Offshore Loan positions and changes, including positions and changes for each type of Offshore Loan and accumulated interest arrears.
For new Offshore Loan plans, data and information that need to be reported is the plan to acquire Offshore Loans for the next 1 (one) year and/or 1 (one) semester, including types of Offshore Loans, time of market entry, nominal value of Offshore Loans, and relationship with creditors. New Offshore Loan plans reporting is only submitted by the Reporting Party in the form of non-bank financial institutions, non-financial business entities, and other entities.
4. Offshore Loan Reporting Procedure
Based on Article 7 of PADG, a Reporting Party other than a Bank that is submitting an Offshore Loan Report and/or new Offshore Loan plans, must submit a letter of application to Bank Indonesia to obtain a Reporting Code signed by the head of the company by attaching a Taxpayer Identification Number (“NPWP”) and a photocopy of the articles of association. For the Reporting Party in the form of a company or by the person directly concerned by attaching NPWP information for the Reporting Party in the form of an individual. After receiving the Reporting Code from Bank Indonesia, the Reporting Party may submit a report using the Reporting Code.
Based on Article 8 of PADG, Offshore Loan Reporting can be submitted by appointing a person in charge or authorizing other parties to prepare, verify, and submit reports with an appointment letter or power of attorney submitted to Bank Indonesia together with the submission of the application letter.
Offshore Loan Reporting is submitted to Bank Indonesia online through the reporting page https://pelaporan.bi.go.id.
Based on Article 16 PADG, Offshore Loan reporting in the form of basic data and Offshore Loan recapitulation data reports, must be submitted monthly no later than the 15th of the following month.
Offshore Loan main data reporting is submitted for the first time no later than the 15th of working hours after the month the Offshore Loan is signed, issued, and acknowledged. Meanwhile, the Offshore Loan recapitulation data reporting is submitted for the first time no later than the 15th after the month the Offshore Loan is signed, issued, or acknowledged.
In relation to the new Offshore Loan plans, the reporting times for the current year are as follows:
a. The new Offshore Loan plan is submitted at the beginning of every year, no later than March 15; and
b. Changes to the new Offshore Loan plan must be submitted no later than June 15.
Corrections to reports that have been submitted to Bank Indonesia shall be submitted no later than the 20th of the month in which the relevant report is submitted as stipulated in Article 19 of PADG.
Moreover, Article 20 of PADG stipulates that in the event that the Reporting Party is late in submitting the report in accordance with the stipulated time for submitting the report, the Reporting Party can still report during the period of delay in submitting the report, which is after the end of the report submission deadline until the end of the month for submitting the report, but the Reporting Party will be declared late in submitting the report.
In the event that the Reporting Party does not submit the report by the deadline during period of delay, the Reporting Party is declared to not have submitted the report and must still submit the report to Bank Indonesia.
Reports and report corrections are declared accepted by Bank Indonesia, in the event that:
a. Softcopy of all reports uploaded successfully;
b. Passed system validation; and
c. The reporter confirms the submitted report.
This is evidenced by a receipt from the Bank Indonesia system.
5. Sanctions
Provisions regarding sanctions are regulated in Articles 25 and 26 of PADG. A new Reporting Party who does not submit the Offshore Loan main data and recapitulation data report after 3 (three) reporting periods since the submission of the first report will be subject to administrative sanctions in the form of a written warning. Meanwhile, the Reporting Party will be subject to administrative sanctions in the form of a written warning if the Reporting Party has not submitted a report to Bank Indonesia since 3 (three) months after it is known that he has carried out Offshore Loan activities.
Furthermore, the Reporting Party who has not submitted a new Offshore Loan plan report after 1 (one) reporting period since the submission of the first report will be subject to administrative sanctions.
If the Reporting Party has received 3 (three) written warnings due to not submitting the Offshore Loan main data and recapitulation data report within 1 (one) reporting year, the imposition of sanctions will be notified to the competent authority or agency, and/or the parent company of the Reporting Party and notification to Creditors in the event that the Reporting Party has received a written warning for 4 (four) times. Meanwhile, in relation to the report on the new Offshore Loan plans and/or changes thereof, notification to the competent authority or agency, creditors, and/or parent company regarding the imposition of sanctions is carried out in the event that the Reporting Party has received a written warning 2 (two) times for not submitting the report within 1 (one) reporting year.
Author: Vania Aqilla Cahyaningrum
Gaffar & Co., an Indonesian Boutique Law Firm specializing and focusing on commercial law areas e.g. investment regulatory and corporate secretarial.
For further queries and information, contact us:
+62 811 877 216 | info@gaffarcolaw.com | www.gaffarcolaw.com
