While the overall reporting obligations imposed by Reg. 21 are broadly similar to those set out in Reg. 16, they have nevertheless been further clarified and expanded. For example, risk participation transactions (as explained in Section B below) were not expressly covered by Reg. 16, whereas they are now specifically provided for by Reg. 21.
B. Key Concepts
Reg. 21 applies to all “Residents” of Indonesia, as defined by the Foreign Exchange Law, that is, all legal and natural persons that are domiciled, or plan to be domiciled, in Indonesia for at least one year.
An “Offshore Financial Asset” is defined as an asset owned or held by a Resident in a non-Resident that is denominated in foreign currency or rupiah and which takes the form of cash in foreign currency, savings deposits, securities, or other offshore assets.
An “Offshore Financial Liability” is a liability owed by a Resident to a non-Resident that is denominated in foreign currency or rupiah and which takes the form of an offshore debt, equity held by a non-Resident, and other offshore liabilities.
“Offshore Debt” refers to a debt owed by a Resident to a non-Resident that is denominated in foreign currency or rupiah, including in respect of Shariah-compliant financing.
“Risk Participation” means the assignment of risk related to a credit and/or other facility based on a master risk participation agreement.
C. Reporting Requirements
Forex-activity reports must be submitted electronically to Bank Indonesia in respect of forex activity conducted in the interest of the reporting party or in the interest of a third party.
The reporting obligation applies to:
a. financial institutions (banks and non-bank financial institutions);
b. non-bank commercial entities;
c. other entities
Forex-activity reports must be submitted on a monthly basis and by not later than the 15th day of the month immediately subsequent to the reporting period.
An entity’s full-year / annual offshore borrowing plan must be reported by not later than March 15 of the operative year, while an amended full-year borrowing plan (in the form of a second-half borrowing plan) must be reported by not later than June 15 of the operative year (July 1 under Reg. 16).
Should a forex activity be undertaken on behalf of a third party, the reporting entity may seek relevant data and information from the third party. In such circumstances, the third party is required to provide the requested data and information.
D. Reportable Information
The information that must be reported under Reg. 21 consists of the following:
a. Information on transactions involving the trading of goods / services and other transactions between Residents and non-Residents. According to Reg. 21’s Elucidation, a “transaction” is any transaction that is conducted through a domestic bank, offshore bank, inter-company account and/or by other means, whether or not it involves a flow of funds. “Other transactions” include the receipt of dividend interest by a Resident from a non-Resident and transactions related to receivables from a non-Resident.
b. primary data on Offshore Debt transactions and/or Risk Participation transactions. According to Reg. 21’s Elucidation, “primary data” consists of data and information related to the profile of a new Offshore Debt and/or Risk Participation transaction and/or an amended Offshore Debt and/or Risk Participation transaction. Such data and information should be based on the relevant loan agreement and/or other supporting documentation.
c. Information on planned drawdown and/or repayment in relation to an Offshore Debt transaction and/or Risk Participation transaction. According to Reg. 21’s Elucidation, the information that should be provided includes such things as (a) the date of a planned drawdown, and (b) the quantum of a planned repayment;
d. Information on a realized drawdown and/or repayment in respect of an Offshore Debt transaction and/or a Risk Participation transaction. Reg. 21’s Elucidation explains that the information which must be provided includes such things as (a) the date of drawdown, and (b) the quantum of the repayment;
e. Offshore Financial Assets position, Offshore Financial Liabilities position and/or Risk Participation position, and changes thereto. According to Reg. 21’s Elucidation, the information that must be provided consists of:
(i) Offshore Financial Assets position: position as regards savings deposits, trade / business receivables, securities, capital participation, and changes in respect of each of these;
(ii) Offshore Financial Liabilities position: position in respect of trade / business debts, acknowledgements of indebtedness, loans and equity, and changes in respect of each of these;
(iii) Risk Participation position: position in respect of Risk Participation transactions and accumulated arrears;
(iv) information on position as regards commitments and contingencies related to Offshore Financial Assets and/or Offshore Financial Liabilities in respect of claims accruing to or liabilities owed to non-Residents; and
(v) information on custodial position in respect of securities held by a customer;
f. Offshore borrowing plan and/or amendment of such plan: Reg. 21’s Elucidation states that the information which must be provided covers the reporting entity’s full-year or half-year offshore borrowing plan, as the case may be, including information on the type of debt, timing of market entry, quantum and relationship with creditor.
Banks are exempt from the requirement to report on “transactions involving the trading of goods / services and other transactions between residents and non-residents,” as described in subsection a above.
Sanctions for non-compliance are confined to the issuance of written reprimands by Bank Indonesia. The imposition of a sanction will be reported by Bank Indonesia to the relevant authorities and to the non-compliant entity’s creditor(s) and/or parent company.
A reporting party that is going through an insolvency process or which has ceased operations remains subject to reporting obligations. However, it may submit an application to Bank Indonesia so as to be exempted from sanctions for non-reporting provided that sufficient proofs are furnished to warrant such an exemption.