LEGAL ALERT FEBRUARY 2017 SSEK legal alert © 1 February 2017 general Presidential Regulation No. 14 of 2017 dated February 20, 2017, regarding the Amendment of Presidential Regulation No. 4 of 2016 regarding Acceleration of the Development of Electricity Infrastructure. This Regulation amends several provisions in the previous regulation, including those on electricity infrastructure development through self-management, funding mechanisms by the government and PT PLN, and the mechanisms for cooperation with PT PLN. It also provides a mechanism for land procurement for the development of electricity infrastructure. This Regulation came into force on the date of its promulgation. banking and financial services Financial Services Authority (“OJK”) Circular Letter Number 9/SEOJK.05/2017 dated February 23, 2017, regarding Micro-Insurance Products and Marketing Channels for Micro-Insurance Products. This Circular Letter implements Article 8 paragraph (2) and Article 45 paragraph (3) of OJK Regulation Number 23/POJK.05/2015 dated November 24, 2015, regarding Insurance Products and Marketing of Insurance Products. It provides a list of requirements for micro-insurance products, namely that they be simple, convenient and economical, and the administrative process for micro-insurance products. It also sets out five marketing channels for micro-insurance products, those being direct marketing, insurance agents, bancassurance, non-bank financial institutions and/or marketing agents. The OJK also mandates that the marketing of micro-insurance products be done based on marketing cooperation agreements that must include certain provisions, including provisions on the payment procedure for contributions, claims and premiums, and a statement that decision-making authority on underwriting shall be fully conferred on the insurance company. This Regulation will come into force two months after its promulgation. communication and informatics Minister of Communication and Informatics Regulation No. 7 of 2017 dated February 7, 2017, regarding Requirements and Procedures for Granting a License for the Provision of Postal Services. As the title suggests, this Regulation provides the requirements and procedures for a company to obtain a license as a provider of postal services. The requirements include having at least IDR 50 million to IDR 500 million in capital, depending on the range of postal services, a five-year business plan and a taxpayer identification number (“NPWP”). Under this Regulation, the postal service license shall be issued at the latest 10 business days after the license application is declared complete. This Regulation also provides the general rights and obligations of postal service providers. It came into force on the date of its enactment. SSEK Legal Alert is a monthly publication of SSEK, Indonesian Legal Consultants. SSEK’s lawyers, advisors and associates provide a wide range of legal services to Indonesian and multinational corporations, banks, joint ventures and other organisations. SSEK Legal Alert is a monthly survey designed to keep our clients up to date with the latest legal developments in Indonesia. To subscribe, visit our website: www.ssek.com. * * * SSEK legal alert © 2 February 2017 cooperatives and smes Minister of Cooperatives and Small and Medium Enterprises (“MOCSME”) Regulation No. 02/PER/M.KUKM/II/2017 dated February 9, 2017, regarding the Amendment of MOCSME Regulation No. 15/PER/M.KUKM/IX2015 regarding the Services of Savings and Loan Cooperatives. This Regulation clarifies the minimum number of members required to establish a Primary Cooperative. It also sets out the additional documents required to apply for deed of establishment approval for a Savings and Loan Cooperative. Those additional documents include evidence that initial capital has been deposited in a general bank, a three-year business plan, organizational and bookkeeping documents, and copies of the IDs of existing and potential members of the cooperative. This Regulation also broadens the scope of services of Savings and Loan Cooperatives, allowing such cooperatives to collect periodical savings (savings kept in a cooperative that may only be deposited once and can only be withdrawn after certain periods of time) and cooperative savings (savings kept in a cooperative for specific purposes that can be withdrawn only if certain conditions are met) from members, potential members, other cooperatives and/or their members. It also allows such cooperatives to provide savings and loan services using a digital financial services network. This Regulation came into force on the date of its enactment. energy and mineral resources Minister of Energy and Mineral Resources Regulation No. 19 of 2017 dated February 17, 2017, regarding the Utilization of Coal for Electricity Generation and the Purchase of Excess Power. This Regulation contains provisions on electricity generation and the purchase of excess power from operation license holders. It divides electricity generation into mine-mouth electricity generation and non-mine-mouth electricity generation. The purchase of electricity generated by coal shall be done based on a business plan for the provision of electric power. This Regulation revokes several previous regulations and came into force on the date of its promulgation. finance Minister of Finance Regulation No. 23/PMK.010/2017 dated February 24, 2017, regarding the Revocation of Minister of Finance Regulations/Minister of Finance Decrees which authority has been delegated from the Ministry of Finance to the Financial Services Authority (“OJK”). This Regulation revokes, by virtue of the enactment of Law No. 21 of 2011 regarding the Financial Services Authority, 16 Minister of Finance Regulations and/or Decrees, including those related to pension funds and financing. This Regulation came into force on the date of its enactment. industry Minister of Industry Regulation No. 06/M-IND/PER/2/2017 dated February 27, 2017, regarding the Conversion of HS Code Numbers for Goods Required to Follow Indonesian National Standards. Under this Regulation, there are several HS code numbers that must be converted in accordance with the 2017 ASEAN Harmonized Tariff Nomenclature (“AHTN”), including those for goods under the supervision of the Directorate General of Agriculture, the Directorate General of Chemicals, Textiles and Various Industries, and the Directorate General of Metals, Machines, Transportation Devices and Electronics. This Regulation came into force on the date of its promulgation. SSEK legal alert © 3 February 2017 Minister of Industry Regulation No. 07/M-IND/PER/3/2017 dated March 2, 2017, regarding Guidelines for Import Plans and Industry Verification for the Granting of Import Duty Facilities by the Government. Under this Regulation, certain industries can obtain import duty facilities from the Government by meeting certain criteria, as follows: (i) the imported goods and raw materials cannot be produced domestically; (ii) the imported goods and raw materials are produced domestically but do not meet required specifications; or (iii) the imported goods and raw materials are produced domestically but not in quantities that meet industry needs. This Regulation came into force on the date of its promulgation. Minister of Industry Regulation No. 04/M-IND/PER/2/2017 dated February 13, 2017, regarding Procedures and Requirements for the Assessment of Local Content for Solar Power Plants (“PLTS”). This Regulation stipulates the procedures and formulas to assess and calculate local content for each type of PLTS, and the procedure to issue a local content certificate. It came into force on the date of its promulgation. Minister of Industry Regulation No. 05/M-IND/PER/2/2017 dated February 13, 2017, regarding the Amendment of Ministry of Industry Regulation No. 54/M-IND/ PER/3/2012 regarding Guidelines for Domestic Product Usage for Electricity Infrastructure Development. This Regulation divides Solar Power Plants (“PLTS”) into three types: Independent Spread PLTS, Independent Centralized PLTS and Connected Centralized PLTS. It stipulates the variables for the calculation of local content for the different types of PLTS. This Regulation came into force on the date of its promulgation. public works and public housing Minister of Public Works and Public Housing Regulation No. 01/PRT/M/2017 dated February 17, 2017, regarding Procedures for the Appointment of Business Entity for Toll Road Concession. This Regulation provides guidance for the appointment of business entities to establish a Toll Road Business Entity for toll road concessions. The appointment of business entities can be done by auction or negotiation if there is only one interested business entity. The scope of this Regulation includes preparations for a business entity to procure the toll road, prequalification procedures, auction and stipulation of the auction, establishment of the toll road business entity, change of share ownership and supervision of the business entity. This Regulation revokes its predecessor, Minister of Public Works and Public Housing Regulation No. 13/ PRT/M/2010 as amended by Minister of Public Works and Public Housing Regulation No. 21/PRT/M/2012 regarding Guidelines for the Procurement of Toll Road Concession. It came into force on the date of its promulgation. tax, customs and excise Minister of Finance Regulation No. 13/PMK.010/2017 dated February 10, 2017, regarding Stipulation of Export Goods Subject to Export Duty and Export Duty Rate. Goods subject to export duty consist of leather and wood, cacao beans, palm oil, crude palm oil and its derivative products, products from metal and mineral processing, and metal and mineral products with certain criteria. This Regulation provides specific tariffs imposed on each of the products found in the attachment therein and also provides the formula to calculate export duty. It came into force on the date of its promulgation. SSEK legal alert © 4 February 2017 Minister of Finance Regulation No. 33/PMK.010/2017 dated March 1, 2017, regarding the Amendment of Minister of Finance Regulation No. 64/PMK.011/2014 regarding Types of Motor Vehicles Subject to Luxury Goods Sales Tax and Guidelines for the Granting of Luxury Goods Sales Tax Exemption. This Regulation amends the attachment to Minister of Finance Regulation No. 64/PMK.011/2014, namely the list of motor vehicles subject to luxury goods sales tax at rates of 10%, 20%, 30%, 40%, 50%, 60% and 125%. This Regulation came into force on the date of its enactment. Minister of Finance Regulation No. 35/PMK.010/2017 dated March 1, 2017, regarding Types of Taxable Goods Categorized as Luxury Goods Other than Motor Vehicles that Are Subject to Luxury Goods Sales Tax. This Regulation lists the types of goods that are subject to luxury goods sales tax at rates of 20%, 40%, 50% and 75%. The types of goods listed in this Regulation include apartments, hot air balloons, aircraft, etc. This Regulation came into force on the date of its enactment. trade Minister of Trade Regulation No. 06/M-DAG/PER/2/2017 dated February 17, 2017, regarding the Consumer Dispute Settlement Board. This Regulation establishes the Consumer Dispute Settlement Board (Badan Penyelesaian Sengketa Konsumen or “BPSK”), a body established in Jakarta and regencies/cities, as requested by the relevant Governor, to provided alternative dispute resolution for consumer disputes. The BPSK has the power and authority to process and resolve consumer disputes through mediation, arbitration or conciliation, consult on consumer protection matters, and to impose administrative sanctions on business actors that violate the provisions of Law No. 8 of 1999 regarding Consumer Protection. The members of the BPSK are representatives of local governments, consumers and business entities. This Regulation came into effect on the date of its enactment. Minister of Trade Regulation No. 07/M-DAG/PER/2/2017 dated February 17, 2017, regarding the Third Amendment of Minister of Trade Regulation No. 36/M-DAG/ PER/9/2007 regarding the Issuance of Business Trade Licenses. This Regulation amends the obligation for a company to re-register or extend its Trade Business License (Surat Izin Usaha Perdagangan or “SIUP”). A SIUP is required for a locally owned company engaging in trading business. Under the previous regulation, a SIUP was valid for as long as the relevant trading activities were being performed, but it had to be reregistered or extended every five years at the place where the SIUP was issued. Under this new Regulation, the SIUP continues to remain valid for as long as the relevant trading activities are being carried out, but it no longer needs to be re-registered or extended. This Regulation repeals all other provisions related to the process and costs for reregistering or extending a SIUP, as well as sanctions for non-compliance. It came into effect on February 22, 2017. Minister of Trade Regulation No. 08/M-DAG/PER/2/2017 dated ¬February 17, 2017, regarding the Amendment of Minister of Trade Regulation No. 37/M-DAG/PER/9/2007 regarding Company Registration Certificate. This Regulation amends provisions on the Company Registration Certificate (Tanda Daftar Perusahaan or “TDP”), with the stated aim of easing the process of doing business. A TDP is a compulsory license for all business entities in Indonesia, evidencing a company’s office registration. Under the previous regulation, a TDP was valid for five years and had to be renewed a minimum of three months prior to its expiration date. This Regulation simplifies the process to renew a TDP, with the relevant business entity now required to submit a notification letter by attaching a copy of the previous TDP to the relevant TDP office via electronic format or manually. Within three working days as of the submission date, the relevant TDP office shall issue the new certificate. In the event that the TDP has not been issued within three working days, the previous TDP is deemed applicable and renewed. This renewal of TDP is free of charge. This Regulation came into effect on February 22, 2017.