KSP Legal Updates
Business Registration Certificate for Distributor of Basic Needs Products
To optimize supervision and distribution of basic needs products by the Indonesian government and as the implementation of Presidential Regulation Number 71 of 2015 on Determination and Storage of Basic Needs and Important Products, Ministry of Trade Regulation Number 20/M-DAG/PER/3/2017 on Registration of Basic Needs Products Distributor (“MOT Reg 20/2017”) was promulgated in April 2017.
MOT Reg 20/2017 applies for distributor of basic needs products, sub-distributor of basic needs products and agent of basic needs products. Meanwhile, attachment I of the MOT Reg 20/2017 elaborates types of basic need products as follow:
Registration certificate for distributor of basic needs products (also known as Tanda Daftar Perusahaan Usaha Industri Barang Kebutuhan Pokok - “TDPUP Bapok”) will be issued by the Ministry of Trade through the Director of Basic Needs and Important Products.
Application of TDPUP Bapok can be submitted through Integrated License Information System (Sistem Informasi Perizinan Terpadu – “SIPT”) provided that the applicant should firstly obtain access rights to the SIPT. In the SIPT system, some documents such as business registration certificate (TDP), Tax ID (NPWP), identity card or passport of the director, trading business license and types of basic needs products that shall be traded. In case of force majeure on the SIPT system, application might be done manually at the Head office of Ministry of Trade.
Approval or rejection on the application of TDPUP Bapok shall be informed in 3 (three) working days. Its approval shall be in the form of digital signature, paperless and attach QR Code. TDPUP Bapok shall be valid for 5 (five) years and should be renewed for every 5 (five) years via SIPT system.
Holder of TDPUP Bapok is required to submit monthly report on distribution of basic needs products through SIPT system. In case of the price of basic needs products beyond or below the government reference price, the government can make special request to holder of TDPUP Bapok to provide procurement and distribution of basic needs products data or information.
Lastly, violation on any provisions in the Regulation may cause revocation of TDPUP Bapok with prior written warning. For instance, failure to renew the expired license shall cause the Director of Basic Needs and Important Products issue a warning letter, freeze business activities or revoke the existing TDPUP Bapok.
Read MoreMOT Reg 20/2017 applies for distributor of basic needs products, sub-distributor of basic needs products and agent of basic needs products. Meanwhile, attachment I of the MOT Reg 20/2017 elaborates types of basic need products as follow:
Registration certificate for distributor of basic needs products (also known as Tanda Daftar Perusahaan Usaha Industri Barang Kebutuhan Pokok - “TDPUP Bapok”) will be issued by the Ministry of Trade through the Director of Basic Needs and Important Products.
Application of TDPUP Bapok can be submitted through Integrated License Information System (Sistem Informasi Perizinan Terpadu – “SIPT”) provided that the applicant should firstly obtain access rights to the SIPT. In the SIPT system, some documents such as business registration certificate (TDP), Tax ID (NPWP), identity card or passport of the director, trading business license and types of basic needs products that shall be traded. In case of force majeure on the SIPT system, application might be done manually at the Head office of Ministry of Trade.
Approval or rejection on the application of TDPUP Bapok shall be informed in 3 (three) working days. Its approval shall be in the form of digital signature, paperless and attach QR Code. TDPUP Bapok shall be valid for 5 (five) years and should be renewed for every 5 (five) years via SIPT system.
Holder of TDPUP Bapok is required to submit monthly report on distribution of basic needs products through SIPT system. In case of the price of basic needs products beyond or below the government reference price, the government can make special request to holder of TDPUP Bapok to provide procurement and distribution of basic needs products data or information.
Lastly, violation on any provisions in the Regulation may cause revocation of TDPUP Bapok with prior written warning. For instance, failure to renew the expired license shall cause the Director of Basic Needs and Important Products issue a warning letter, freeze business activities or revoke the existing TDPUP Bapok.
Three Hours License Services for Mining and Mineral Infrastructure
Regulation on three hours license services for mining and mineral infrastructure (Pelayanan Cepat Izin Investasi 3 jam - Layanan Cepat I23J) has been come into effect since June 2016. Some provisions of the previous regulation were amended under the Ministry of Energy and Mineral Resources Number 13 of 2017 (“MOEMR Reg 13/2017”). These regulations significantly expedite licenses services which normally take 20 until 40 working days.
Pursuant to the previous regulation, Layanan Cepat I23J applies for geothermal business, electric power generation business, electric power transmission business and temporary business license of oil and gas downstream. However, the geothermal business and all relevant provisions were removed in the MOEMR Reg 13/2017.
Submission of the applications for this services should be done by director of the company at the head office of the Indonesian Investment Coordinating Board (Badan Koordinasi Penanaman Modal - BKPM). Checklist of the administration and technical requirements are attached in the MOEMR Reg 13/2017.
The following are nine business licenses provided in Layanan Cepat I23J:
1. Temporary business license of electric power supply.
2. Temporary business license of oil/fuel oil/liquefied petroleum gas storage.
3. Temporary business license of processed products/compressed natural gas storage.
4. Temporary business license of liquefied natural gas storage.
5. Temporary business license of oil processing.
6. Temporary business license of processed products processing.
7. Temporary business license of natural gas processing.
8. Temporary business license of oil/fuel oil general trading.
9. Temporary business license of processed products general trading.
Read MorePursuant to the previous regulation, Layanan Cepat I23J applies for geothermal business, electric power generation business, electric power transmission business and temporary business license of oil and gas downstream. However, the geothermal business and all relevant provisions were removed in the MOEMR Reg 13/2017.
Submission of the applications for this services should be done by director of the company at the head office of the Indonesian Investment Coordinating Board (Badan Koordinasi Penanaman Modal - BKPM). Checklist of the administration and technical requirements are attached in the MOEMR Reg 13/2017.
The following are nine business licenses provided in Layanan Cepat I23J:
1. Temporary business license of electric power supply.
2. Temporary business license of oil/fuel oil/liquefied petroleum gas storage.
3. Temporary business license of processed products/compressed natural gas storage.
4. Temporary business license of liquefied natural gas storage.
5. Temporary business license of oil processing.
6. Temporary business license of processed products processing.
7. Temporary business license of natural gas processing.
8. Temporary business license of oil/fuel oil general trading.
9. Temporary business license of processed products general trading.
Export Of Mining Products Under The 2017 Mining Regulations
As mandated by the Law Number 4 of 2009 regarding mineral and coal mining, holder of Mining Business License (Izin Usaha Pertambangan – IUP) and Special Mining Business License (Izin Usaha Pertambangan Khusus - IUPK) are required to process and refine mining products domestically before exporting them overseas.
Early this year, the Government of the Republic of Indonesia enacted Ministry of Energy and Mineral Resources Regulations Number 06 of 2017 regarding Guidance and Requirements of Providing Recommendation to Sell Processed and Refined Mineral Abroad (“MEMR Reg 06/2017”).
Holder of IUP Operation Production, IUPK Operation Production for Process and/or Refinery, IUPK Operation Production for Transportation and Sale and Contract of Work (“Authorized Mining Exporter”) are able to sell the metal mineral and non-metal mineral which meet minimum requirements of processing and refinery for certain amount. However, the Authorized Mining Exporter should firstly obtain a recommendation from the MEMR (“MEMR Recommendation”).
The Authorized Mining Exporter should submit some documents as referred to Article 5.2 of the MEMR Reg 06/2017 such as Clear and Clean certificate for IUP holders, Report of Analysis (ROA), Certificate of Analysis (COA), payment receipt of Non-Tax State Revenues and so forth. Approval or rejection of such application shall be issued within 14 (fourteen) working days. Meanwhile, the MEMR Recommendation and its renewal shall be valid for 1 (one) year.
In the evaluation process the MEMR will also determine amount of mining products that can be sold abroad by considering:
1. Estimation of reserves or guaranteed supply of raw materials to meet the needs of purification facilities;
2. The amount of overseas sales in approval of the work plan and the current year's cost budget;
3. Input capacity of purification facility; and
4. Physical development of purification facility development.
Another permit that should be obtained is Export Approval from the Directorate General of Foreign Trade as stipulated in Article 2.2. of the MEMR Reg 06/2017. Validity period of the Export Approval shall be in line with the validity period of the MEMR Recommendation.
To obtain Export Approval, the appointed surveyor will conduct verification or technical review on the processed and refined mining products that will be exported to ensure that such products meet the minimum processing and refinery requirements. Verification process shall be carried out before and during the loading process as well as during the stuffing process.
The appointed surveyor will release Surveyor Report not later than 1 (one) day after the verification process. This report can only be used for 1 (one) time shipment of 1 (one) Export Declaration number.
Meanwhile, the Authorized Mining Exporter must submit written report on either successful or unsuccessful export activities periodically at the latest fifteenth day of the following months to Export Director of Mining and Industrial products of the Ministry of Trade, copied to the MEMR and the Ministry of Industrial. If they do not fulfill this requirement, they will be penalized by administrative sanction.
It is worth noting that if the Authorized Mining Exporter fails to complete 90% of physical development plan of purification facility development until 30 (thirty) days before the expiry date of the MEMR Recommendation, the Export Approval could be revoked by the Ministry of Trade.
Read MoreEarly this year, the Government of the Republic of Indonesia enacted Ministry of Energy and Mineral Resources Regulations Number 06 of 2017 regarding Guidance and Requirements of Providing Recommendation to Sell Processed and Refined Mineral Abroad (“MEMR Reg 06/2017”).
Holder of IUP Operation Production, IUPK Operation Production for Process and/or Refinery, IUPK Operation Production for Transportation and Sale and Contract of Work (“Authorized Mining Exporter”) are able to sell the metal mineral and non-metal mineral which meet minimum requirements of processing and refinery for certain amount. However, the Authorized Mining Exporter should firstly obtain a recommendation from the MEMR (“MEMR Recommendation”).
The Authorized Mining Exporter should submit some documents as referred to Article 5.2 of the MEMR Reg 06/2017 such as Clear and Clean certificate for IUP holders, Report of Analysis (ROA), Certificate of Analysis (COA), payment receipt of Non-Tax State Revenues and so forth. Approval or rejection of such application shall be issued within 14 (fourteen) working days. Meanwhile, the MEMR Recommendation and its renewal shall be valid for 1 (one) year.
In the evaluation process the MEMR will also determine amount of mining products that can be sold abroad by considering:
1. Estimation of reserves or guaranteed supply of raw materials to meet the needs of purification facilities;
2. The amount of overseas sales in approval of the work plan and the current year's cost budget;
3. Input capacity of purification facility; and
4. Physical development of purification facility development.
Another permit that should be obtained is Export Approval from the Directorate General of Foreign Trade as stipulated in Article 2.2. of the MEMR Reg 06/2017. Validity period of the Export Approval shall be in line with the validity period of the MEMR Recommendation.
To obtain Export Approval, the appointed surveyor will conduct verification or technical review on the processed and refined mining products that will be exported to ensure that such products meet the minimum processing and refinery requirements. Verification process shall be carried out before and during the loading process as well as during the stuffing process.
The appointed surveyor will release Surveyor Report not later than 1 (one) day after the verification process. This report can only be used for 1 (one) time shipment of 1 (one) Export Declaration number.
Meanwhile, the Authorized Mining Exporter must submit written report on either successful or unsuccessful export activities periodically at the latest fifteenth day of the following months to Export Director of Mining and Industrial products of the Ministry of Trade, copied to the MEMR and the Ministry of Industrial. If they do not fulfill this requirement, they will be penalized by administrative sanction.
It is worth noting that if the Authorized Mining Exporter fails to complete 90% of physical development plan of purification facility development until 30 (thirty) days before the expiry date of the MEMR Recommendation, the Export Approval could be revoked by the Ministry of Trade.
The Use Of Expert Witness At The Ministry Of Home Affairs
The Ministry of Home Affairs (“Ministry”) recently enacted Ministry of Home Affairs Regulation Number 95 of 2017 on the Use of Expert Witness (“MHA Reg 95/2017”). It is claimed as the first regulation related to this matter among Indonesian ministries.
Expert witness would be harnessed by the Ministry to maximize handling of cases involving the Ministry as the party in litigation cases. The expert could be either individual from the Ministry itself or professional consultant with minimum academic qualification of Doktor (S3) or equal to PhD (Doctor of Philosophy) in his relevant field.
The appointment of the expert shall be stated in a Ministry of Home Affairs degree signed by the Secretary General. The appointed expert should be responsible for his expert opinions and explanations before the court. To perform his duties, he will be assisted by the Legal Bureau of the Ministry of Home Affairs.
Every time the expert complete the court hearing, he will receive honorarium by submitting a performance report, including expert opinion and other administrative documents. Meanwhile, Article 8.3 of the MHA Reg 25/2017 stipulates the maximum honorarium of the expert is IDR 25.000.000 (twenty five million Indonesian Rupiah) per court hearing.
Although this MHA Reg 95/2017 only apply to the Ministry of Home Affairs, it could be a good role model for other ministries to cap the expert witness fees. On the other hand, experts should follow the stipulation and provide the services professionally. Standardization of expert witness fees shall prevent over-budgeted costs and minimize potential corruption engaged in by government officials.
Read MoreExpert witness would be harnessed by the Ministry to maximize handling of cases involving the Ministry as the party in litigation cases. The expert could be either individual from the Ministry itself or professional consultant with minimum academic qualification of Doktor (S3) or equal to PhD (Doctor of Philosophy) in his relevant field.
The appointment of the expert shall be stated in a Ministry of Home Affairs degree signed by the Secretary General. The appointed expert should be responsible for his expert opinions and explanations before the court. To perform his duties, he will be assisted by the Legal Bureau of the Ministry of Home Affairs.
Every time the expert complete the court hearing, he will receive honorarium by submitting a performance report, including expert opinion and other administrative documents. Meanwhile, Article 8.3 of the MHA Reg 25/2017 stipulates the maximum honorarium of the expert is IDR 25.000.000 (twenty five million Indonesian Rupiah) per court hearing.
Although this MHA Reg 95/2017 only apply to the Ministry of Home Affairs, it could be a good role model for other ministries to cap the expert witness fees. On the other hand, experts should follow the stipulation and provide the services professionally. Standardization of expert witness fees shall prevent over-budgeted costs and minimize potential corruption engaged in by government officials.
Obligation For The Employer To Prepare Wage Structure and Wage Scale
One of new regulations as the implementation of Government Regulation Number 78 of 2015 on Wage is Ministry of Employment Regulation Number 1 of 2017 regarding Wage Structure and Wage Scale (“MOE Reg 1/2017”).
The requirements under the MOE Reg 1/2017, i.e. preparing wage structure and wage scale as well as informing them to the employees in person, should be completed at the latest 23 October 2017.
Article 1 of the MOE Reg 1/2017 defines:
1. Wage Structure is a structure of wages from the lowest amount to the highest amount or from the highest amount to the lowest amount.
2. Wage Scale is a range of wages from the lowest amount to the highest amount that is applicable for a particular level of employees.
Wage structure and wage scale prepared by employer based on classification, position, years of service, education and competency of the employees. Further, Article 3 of the MOE Reg 1/2017 provides wage is set out in wage structure and wage scale are basic wage only.
The Employer is obliged to make wage structure and wage scale by way of a ‘decree’. As the decree is not specifically elaborated in the MOE Reg 1/2017, the decree could be issued by the Board of Directors (BOD) or Human Resources department with approval from the BOD.
Attachment of the MOE Reg 1/2017 provides example of determining wage structure and wage scale such as simple ranking method, two-point method and so on. However, the Employer is not obliged to apply any of such method if they have different one.
It is also required to present wage structure and wage scale once the Employer submit application for i) ratification and renewal of company regulation; ii) registration, extension and renewal of collective labor agreement.
Failure of preparing wage structure and wage scale leads to administrative sanction to the Employer. The sanction could be in the form of warning, written warning, freezing of business activities, cancellation of approvals, cancellation of registrations or revocation of company license.
Read MoreThe requirements under the MOE Reg 1/2017, i.e. preparing wage structure and wage scale as well as informing them to the employees in person, should be completed at the latest 23 October 2017.
Article 1 of the MOE Reg 1/2017 defines:
1. Wage Structure is a structure of wages from the lowest amount to the highest amount or from the highest amount to the lowest amount.
2. Wage Scale is a range of wages from the lowest amount to the highest amount that is applicable for a particular level of employees.
Wage structure and wage scale prepared by employer based on classification, position, years of service, education and competency of the employees. Further, Article 3 of the MOE Reg 1/2017 provides wage is set out in wage structure and wage scale are basic wage only.
The Employer is obliged to make wage structure and wage scale by way of a ‘decree’. As the decree is not specifically elaborated in the MOE Reg 1/2017, the decree could be issued by the Board of Directors (BOD) or Human Resources department with approval from the BOD.
Attachment of the MOE Reg 1/2017 provides example of determining wage structure and wage scale such as simple ranking method, two-point method and so on. However, the Employer is not obliged to apply any of such method if they have different one.
It is also required to present wage structure and wage scale once the Employer submit application for i) ratification and renewal of company regulation; ii) registration, extension and renewal of collective labor agreement.
Failure of preparing wage structure and wage scale leads to administrative sanction to the Employer. The sanction could be in the form of warning, written warning, freezing of business activities, cancellation of approvals, cancellation of registrations or revocation of company license.
Payment and Delivery Methods in Import and Export Transaction
Payment and delivery methods in international trade transaction are essential to be agreed in an international commercial agreement to protect and secure the contracting parties’ interests, to shift potential loss to the relevant bank, to expand market access, to add export value, to protect trading balance, to improve production and so forth.
Based on these benefits, the Government of Indonesia (“GOI”) recently enacted Government Regulation Number 29 of 2017 on Payment and Delivery Methods in Import and Export Transaction (“GR 29/2017”).
The GR 29/2017 stipulates payment method for export in the form of cash, Letter of Credit (L/C), Advance Payment, Open Account, Collection and Consignment. Payment method for strategic and important goods which are limited to be exported or free to be exported should be done via L/C based on Article 6.1 of the GR 29/2017. Meanwhile, payment method for import can also be done via barter, buy back and offset pursuant to Article 6.1 of the GR 29/2017.
L/C, as defined in the GR 29/2017, is a credit notification issued by an opening bank based on importer’s request, which are its customer, and addressed to exporter as beneficiary through advising bank overseas, with request to procure some money to exporter (individual or business entity) whose name is written in such L/C for payment of the goods delivered by exporter.
Delivery of exported goods can be done with Free on Board (FOB), Cost and Freight (CFR), Cost, Insurance and Freight (CIF) or any other delivery of goods methods such as Ex Works (EXW), Free Carrier (FCA), Free Alongside Ship (FAS), Carriage Paid To (CPT), Carriage and Insurance Paid To (CIP), Delivered at Terminal (DAT), Delivered at Place (DAP), and Delivery Duty Paid (DDP).
Delivery of particular exported goods which are strategic and important goods should be done via Cost, Insurance and Freight (CIF) based on Article 8.1 of the GR 29/2017. Meanwhile, the particular imported goods should be carried out via Free on Board (FOB) pursuant to Article 10.1 of the GR 29/2017.
Elucidation of Article 10 of the GR 29/2017 defines the particular imported goods are imported goods to be used by government either ministry, non-ministerial government department, regional government, state owned enterprises or regional owned enterprises. This includes staple food products such as rice, meets, corn etc.
Administrative sanction applies to any violation of Article 4.1, Article 6.1, Article 8.1 and Article 10.1 of the GR 29/2017 in the form of written warning, close-down of work, administrative fines, freezing permit, and/or revocation of permit.
Read MoreBased on these benefits, the Government of Indonesia (“GOI”) recently enacted Government Regulation Number 29 of 2017 on Payment and Delivery Methods in Import and Export Transaction (“GR 29/2017”).
The GR 29/2017 stipulates payment method for export in the form of cash, Letter of Credit (L/C), Advance Payment, Open Account, Collection and Consignment. Payment method for strategic and important goods which are limited to be exported or free to be exported should be done via L/C based on Article 6.1 of the GR 29/2017. Meanwhile, payment method for import can also be done via barter, buy back and offset pursuant to Article 6.1 of the GR 29/2017.
L/C, as defined in the GR 29/2017, is a credit notification issued by an opening bank based on importer’s request, which are its customer, and addressed to exporter as beneficiary through advising bank overseas, with request to procure some money to exporter (individual or business entity) whose name is written in such L/C for payment of the goods delivered by exporter.
Delivery of exported goods can be done with Free on Board (FOB), Cost and Freight (CFR), Cost, Insurance and Freight (CIF) or any other delivery of goods methods such as Ex Works (EXW), Free Carrier (FCA), Free Alongside Ship (FAS), Carriage Paid To (CPT), Carriage and Insurance Paid To (CIP), Delivered at Terminal (DAT), Delivered at Place (DAP), and Delivery Duty Paid (DDP).
Delivery of particular exported goods which are strategic and important goods should be done via Cost, Insurance and Freight (CIF) based on Article 8.1 of the GR 29/2017. Meanwhile, the particular imported goods should be carried out via Free on Board (FOB) pursuant to Article 10.1 of the GR 29/2017.
Elucidation of Article 10 of the GR 29/2017 defines the particular imported goods are imported goods to be used by government either ministry, non-ministerial government department, regional government, state owned enterprises or regional owned enterprises. This includes staple food products such as rice, meets, corn etc.
Administrative sanction applies to any violation of Article 4.1, Article 6.1, Article 8.1 and Article 10.1 of the GR 29/2017 in the form of written warning, close-down of work, administrative fines, freezing permit, and/or revocation of permit.
Indonesian National Cyber and State Codes Board
Another non-ministerial government department (lembaga pemerintah non-kementerian) was officially formed by the Government of the Republic of Indonesia (“GOI”) under the Presidential Regulation Number 53 of 2017 on National Cyber and State Codes Board (Badan Siber dan Sandi Negara - BSSN) on 19 May 2017.
The BSSN was a collaboration of State Codes Agency and Directorate General of Application and Informatics of Ministry of Communication and Informatics. In particular, the BSSN is under supervision and responsible to the President of the Republic of Indonesia through the Minister for Political, Legal and Security Affairs.
The main duty of BSSN is to carry out cyber security effectively and efficiently by harnessing, developing, consolidating all relevant aspects as to cyber security.
To perform its duty, the BSSN is also authorized in:
1. Preparation and implementation of technical policies in the areas of identification, detection, protection, prevention, recovery, monitoring, evaluation, control of e-commerce protection, coding, screening, cyber diplomacy. Cyber crisis management center, cyber contact center, information center, mitigation support, vulnerability recovery, cyber incidents and / or cyber-attacks, as well as supervision and evaluation of these policies.
2. Coordinate functional activities in the execution of the BSSN’s duties and as a center for all stakeholders.
3. Implementation of guidance and provision of administrative support to all organizational units within the BSSN.
4. Supervision over implementation of the BSSN’s duties.
5. Implementation of support that is substantive to all elements of the organization within the BSSN.
6. Implementation of national, regional and international cooperation in cyber security affairs.
In terms of organization structure, the Head of BSSN shall be supported by the main secretariat and four supporting deputies i.e.:
1. Deputy for Identification and Detection;
2. Deputy for Protection;
3. Deputy for Disaster and Recovery; and
4. Deputy for Monitoring and Controlling.
The existence of the BSSN equip unit of the state apparatus to combat terrorism cyber-attacks which is the main concern of the GOI i.e. dissemination of propaganda of terrorist-radicalism ideology to young generation through social media. Furthermore, the BSSN shall be substantially needed to assist Center for Financial Transaction Reporting and Analysis (PPATK), Financial Services Providers, the Indonesian Police, the Public Prosecutor or judges to investigate and trace any suspicious financial transaction committed to terrorism or organized crime online financing.
Read MoreThe BSSN was a collaboration of State Codes Agency and Directorate General of Application and Informatics of Ministry of Communication and Informatics. In particular, the BSSN is under supervision and responsible to the President of the Republic of Indonesia through the Minister for Political, Legal and Security Affairs.
The main duty of BSSN is to carry out cyber security effectively and efficiently by harnessing, developing, consolidating all relevant aspects as to cyber security.
To perform its duty, the BSSN is also authorized in:
1. Preparation and implementation of technical policies in the areas of identification, detection, protection, prevention, recovery, monitoring, evaluation, control of e-commerce protection, coding, screening, cyber diplomacy. Cyber crisis management center, cyber contact center, information center, mitigation support, vulnerability recovery, cyber incidents and / or cyber-attacks, as well as supervision and evaluation of these policies.
2. Coordinate functional activities in the execution of the BSSN’s duties and as a center for all stakeholders.
3. Implementation of guidance and provision of administrative support to all organizational units within the BSSN.
4. Supervision over implementation of the BSSN’s duties.
5. Implementation of support that is substantive to all elements of the organization within the BSSN.
6. Implementation of national, regional and international cooperation in cyber security affairs.
In terms of organization structure, the Head of BSSN shall be supported by the main secretariat and four supporting deputies i.e.:
1. Deputy for Identification and Detection;
2. Deputy for Protection;
3. Deputy for Disaster and Recovery; and
4. Deputy for Monitoring and Controlling.
The existence of the BSSN equip unit of the state apparatus to combat terrorism cyber-attacks which is the main concern of the GOI i.e. dissemination of propaganda of terrorist-radicalism ideology to young generation through social media. Furthermore, the BSSN shall be substantially needed to assist Center for Financial Transaction Reporting and Analysis (PPATK), Financial Services Providers, the Indonesian Police, the Public Prosecutor or judges to investigate and trace any suspicious financial transaction committed to terrorism or organized crime online financing.
E-commerce and Portal Web Business in the 2017 Indonesian Business Field Classifications
The emergence of various new business sectors leads to the enactment of new Indonesian Business Field Classifications (Klasifikasi Baku Lapangan Usaha Indonesia - “KBLI”) by the Central Bureau of Statistics (Badan Pusat Statistik - BPS) under the Head of BPS Regulation Number 19 of 2017 (“KBLI 2017”).
The KBLI 2017 was created to cover the fastest-growing business industries which have not been classified in the previous KBLI. In addition, the KBLI 2017 plays important role for private person or investor to clearly determine its business field classification as it will be required in some company’s licenses such as Investment Licenses issued by the Indonesian Coordinating Board (Badan Koordinasi Penanaman Modal – BKPM), Business Registration Certificate (Tanda Daftar Perseroan - TDP), Trading Business License (Surat Izin Usaha Perdagangan - SIUP) and other licenses.
E-commerce and Portal Web are two new business sectors included in the KBLI 2017. Many business persons or even foreign investors convincingly enthusiasm to enter into this market as the number of internet users in Indonesia have been rapidly growing at least for the last three years.
As stipulated in the KBLI 2017, E-commerce business is categorized under KBLI number 47919 i.e. ‘Retail Business Via Media For Any Other Goods’, including but not limited to via catalogue, model, telephone, television, internet, mass media and its kind.
Meanwhile, the KBLI 2017 provides two classification of Portal Web business as follow:
1. KBLI number 63121 i.e. ‘Portal Web and/or Digital Platform without Commercial Purposes’ such as online database search engine, media site that is regularly updated and so forth.
2. KBLI number 63122 i.e. ‘Portal Web and/or Digital Platform with Commercial Purposes’ such as online marketplace, digital advertising, financial technology, online payment platform, on-demand online services and so on.
Interestingly, this KBLI 2017 was enacted after the promulgation of the 2016 Investment Negative List (Daftar Negatif Investasi – "DNI"), thus some businesses have not been classified properly.
In this case, E commerce business in KBLI 47919 and Portal Web business in KBLI 63122 are classified under the same KBLI number 00000 in the 2016 DNI i.e. 'Organizer of Electronic Trading Transactions (market place on platform basis, daily deals, price grabber and online classified ad) with the investment value of less than IDR l00.000.000.000 (one hundred billion Indonesian Rupiah)'. This line of business is open for maximum of 49% foreign share ownership.
Read MoreThe KBLI 2017 was created to cover the fastest-growing business industries which have not been classified in the previous KBLI. In addition, the KBLI 2017 plays important role for private person or investor to clearly determine its business field classification as it will be required in some company’s licenses such as Investment Licenses issued by the Indonesian Coordinating Board (Badan Koordinasi Penanaman Modal – BKPM), Business Registration Certificate (Tanda Daftar Perseroan - TDP), Trading Business License (Surat Izin Usaha Perdagangan - SIUP) and other licenses.
E-commerce and Portal Web are two new business sectors included in the KBLI 2017. Many business persons or even foreign investors convincingly enthusiasm to enter into this market as the number of internet users in Indonesia have been rapidly growing at least for the last three years.
As stipulated in the KBLI 2017, E-commerce business is categorized under KBLI number 47919 i.e. ‘Retail Business Via Media For Any Other Goods’, including but not limited to via catalogue, model, telephone, television, internet, mass media and its kind.
Meanwhile, the KBLI 2017 provides two classification of Portal Web business as follow:
1. KBLI number 63121 i.e. ‘Portal Web and/or Digital Platform without Commercial Purposes’ such as online database search engine, media site that is regularly updated and so forth.
2. KBLI number 63122 i.e. ‘Portal Web and/or Digital Platform with Commercial Purposes’ such as online marketplace, digital advertising, financial technology, online payment platform, on-demand online services and so on.
Interestingly, this KBLI 2017 was enacted after the promulgation of the 2016 Investment Negative List (Daftar Negatif Investasi – "DNI"), thus some businesses have not been classified properly.
In this case, E commerce business in KBLI 47919 and Portal Web business in KBLI 63122 are classified under the same KBLI number 00000 in the 2016 DNI i.e. 'Organizer of Electronic Trading Transactions (market place on platform basis, daily deals, price grabber and online classified ad) with the investment value of less than IDR l00.000.000.000 (one hundred billion Indonesian Rupiah)'. This line of business is open for maximum of 49% foreign share ownership.
Online Registration of Franchise Registration Certificate
The Ministry of Trade of the Republic of Indonesia (“MOT”) recorded 360 of 698 franchises have had the Franchise Registration Certificate (Surat Tanda Pendaftaran Waralaba - “STPW”).
This figure indicates lack of legal knowledge and awareness of franchise owners to register their businesses to eliminate any potential legal issues. Many of them argued that the requirements are way too complicated and relatively expensive, particularly from local franchise owners’ perspective.
The issuance of the MOT Regulation Number 86/M-Dag/Per/12/2016 on Integrated Trade Services Online Licensing Services Provisions and Digital Signature (“MOT Reg 86/2016”) was intended to simplify the procedure of obtaining the STPW for all franchise owners in remote areas in Indonesia.
Firstly, the franchise owner is required to obtain integrated licensing information system ("SIPT”) access right by submitting some documents via online such as the completed form and identity card or passport of company’s person in charge. After being verified, the applicant will receive user name and password to make either new, amendment or extension application.
New STPW application requires some documents to be uploaded such as franchise prospectus, franchise agreement, business license, intellectual property certificate, business license and so on. The STPW is valid for 5 (five) years. In terms of extension of the STPW, any amended information in the latest STPW and report on the use of domestic products should also be submitted to the SIPT.
The SIPT will be expired if the access rights holder does not use it for 1 (one) year as of the date of the grant of the access rights. Director of Business Development and Distributors (Direktur Bina Usaha dan Pelaku Distribusi) is entitled to revoke the access rights in case of:
1. breach of any provisions in the MOT Reg 86/2016;
2. the access rights holder does not provide valid data/information according to the field verification result;
3. misuse of the SIPT by the access rights holder as confirmed by the maintenance team; or
4. infringement in trade sectors by the access rights holder.
Read MoreThis figure indicates lack of legal knowledge and awareness of franchise owners to register their businesses to eliminate any potential legal issues. Many of them argued that the requirements are way too complicated and relatively expensive, particularly from local franchise owners’ perspective.
The issuance of the MOT Regulation Number 86/M-Dag/Per/12/2016 on Integrated Trade Services Online Licensing Services Provisions and Digital Signature (“MOT Reg 86/2016”) was intended to simplify the procedure of obtaining the STPW for all franchise owners in remote areas in Indonesia.
Firstly, the franchise owner is required to obtain integrated licensing information system ("SIPT”) access right by submitting some documents via online such as the completed form and identity card or passport of company’s person in charge. After being verified, the applicant will receive user name and password to make either new, amendment or extension application.
New STPW application requires some documents to be uploaded such as franchise prospectus, franchise agreement, business license, intellectual property certificate, business license and so on. The STPW is valid for 5 (five) years. In terms of extension of the STPW, any amended information in the latest STPW and report on the use of domestic products should also be submitted to the SIPT.
The SIPT will be expired if the access rights holder does not use it for 1 (one) year as of the date of the grant of the access rights. Director of Business Development and Distributors (Direktur Bina Usaha dan Pelaku Distribusi) is entitled to revoke the access rights in case of:
1. breach of any provisions in the MOT Reg 86/2016;
2. the access rights holder does not provide valid data/information according to the field verification result;
3. misuse of the SIPT by the access rights holder as confirmed by the maintenance team; or
4. infringement in trade sectors by the access rights holder.