Income earned from export of natural resources must remain in an Indonesian licensed bank for minimum of three months
On 1 August 2023, Indonesia issued Government Regulation No. 36 of 2023 concerning Export Earnings arising from Businesses, Management and Processing Activities Relating to Natural Resources (“Regulation 36”). Regulation 36 revokes Government Regulation No. 1 of 2019, with the same title (“Regulation 1”).
Mandatory deposit
Indonesia has required export earnings to be deposited into stipulated banks since the enactment of Law No. 24 of 1999 on the Foreign Exchange Flow and Exchange Rate System. The Indonesian Central Bank (“Bank Indonesia”) issues implementing regulations from time to time, the most recent being Bank Indonesia Regulation No. 7 of 2023 concerning Export and Import Earnings.
The overarching principle is that there is a requirement to deposit export earnings into the Indonesian financial system (sistem keuangan Indonesia), that is, Indonesian Central Bank licensed banks located in Indonesia, as well as the overseas branch offices of those banks (but excluding those branch offices of foreign banks that are located in Indonesia or overseas). At the same time, variations exist on specified export earnings, such as from the sales of natural resources as laid out below.
What’s new
Regulation 36 requires as much as 30% of the deposited export earnings (arising from mining, plantation, forestry, and fisheries) to have a minimum “stay period” of three months before the funds can be paid out of the account. Regulation 1 did not include such a requirement and funds could be paid out instantaneously after they were deposited.
Failure to comply with the above requirement may result in an administrative sanction in the form of suspension of export assistance from the Indonesian Government.
