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Updates on Regulation concerning Monitoring of FX Activity for Bank and Customer

By : Agung Santoso

2020-02-13

Bank Indonesia (i.e. the Central Bank of Indonesia – “BI”) has enacted Bank Indonesia Regulation (“PBI”) Nr. 21/15/PBI/2019 concerning Monitoring of FX Activity for Bank and Customer (Pemantauan Kegiatan Lalu Lintas Devisa Bank dan Nasabah) (“PBI Nr. 21/2019”) which comes into effect on 2nd January 2020.

Previously, the monitoring of foreign exchange (FX) activity (lalu lintas devisa – “LLD”) for bank and customer was regulated under PBI Nr. 18/10/PBI/2016. The main update in this PBI Nr. 21/2019 is on the scope of the LLD report (which now includes additional reporting components comprising the Supporting Reports, i.e. DHE, DHE SDA and DPI). 


In order to give a brief summary on PBI Nr. 21/2019, we want to focus on these key points:

I. Scope of LLD Reports 

Banks are required to punctually submit complete and correct LLD reports to BI. Said reports shall encompass the following: 

Transactional Reports: 
Bank and/or Customer transactions that affect the Banks’ foreign financial assets (aset finansial luar negeri - “AFLN”) and/or foreign financial obligations (kewajiban finansial luar negeri – “KFLN”).

Financial Position Reports:
Financial positions and transfers which are completed by all accounts relating to a Bank’s AFLN and/or KFLN.

Supporting Reports*
These shall encompass several reports, namely:

  1. Reports on Export Transactions Details;
  2. Reports on the submission list for required supporting documents for FX export proceeds (devisa hasil ekspor – “DHE”);
  3. Reports on the specific account (Rekening Khusus - “Reksus”) for DHE deriving from exports of natural resources (“DHE SDA”);
  4. Reports on DHE transactions and FX payment transactions for imports (Devisa Pembayaran Impor – “DPI”)**; and
  5. Other reports. 

*) The components of Supporting Documents specified in points (b), (c) and (d) above (i.e. reports of DHE, DHE SDA and DPI) are the new features in PBI Nr. 21/2019.

**) This report shall contain information on DHE receipts and DPI expenses for non-telegraphic transactions (transaksi nontelegrafik - “non-TT”), e.g. Letter of Credit (L/C), Document Collection (D/C), and non-swift.

 

II. LLD Report Procedure 

The LLD reports shall be submitted by the Banks through BI online system on every Report Submission Period (Masa Penyampaian Laporan - MPL):

  1. at the latest on the fifteenth day after the reporting month period (Periode Laporan - PL) for: transaction reports, financial position reports, export transaction detail reports (Laporan Rinci Transaksi Ekspor - RTE), supporting document submission reports (Laporan Daftar Penyampaian Dokumen Pendukung - DPDP), and DHE Reksus report;
  2. at the latest on the fifth day after the PL for: reporting non-TT DHE and DPI transactions.

Note:

  • Banks must still submit nil reports in the absence of any LLD activities or transactions;
  • Technical provisions concerning the scope, submission or correction procedures related to the LLD report have been further regulated (in more details) in the Board of Governors’ Regulations (Peraturan Anggota Dewan Gubernur – PADG) Nr. 21/28/PADG/2019 concerning Monitoring of FX Activity for Bank and Customer. 

 

III. Outgoing Transfers by Customers 

All customers which are seeking to complete outgoing transfers (with Banks) are required to state the purpose of the transaction to the Bank in accordance with the relevant transaction purpose codes (Sandi Tujuan Transaksi – STT), as determined by BI. Bank then must submit the information regarding the purpose of LLD transaction through the Financial Transaction Messaging Systems (FTMS) for each completed transaction. Furthermore, transactions must be reported on an individual (per transaction) basis if their values exceed USD10,000. Meanwhile, any transactions amounting to USD 10,000 or less must be reported on a consolidated basis and categorized based on certain information.

Customers who seek to conduct an outgoing transfer of more than USD100,000 (or equivalent) must also submit supporting documents to the relevant Bank, and the Bank must ensure the completeness of the supporting documents before accepting a fund transfer order.

The above requirement to submit supporting document shall not apply for:

  1. transactions which are conducted by the Bank for its own interest;
  2. transactions which are made for the purpose of transferring money to onshore accounts owned by the same customer. 

 

IV. Sanction

Non-compliance to the provisions under PBI Nr. 21/2019 will be subject to various administrative sanctions imposed by BI in the form of among others:

For Banks

  • any delay in submission of LLD reports to BI will be sanctioned by an administrative penalty of IDR1mio per day of lateness. If the bank does not submit its report before the end of the month, it shall be deemed as a nonperformance of its obligation, then the bank will be subject to administrative penalty of IDR 50mio;
  • any incorrect details in LLD reports to BI will be subject to administrative penalty of IDR25,000 per 1 (one) incorrect field, with maximum administrative penalty of IDR 50mio;
  • for bank that accepted outgoing transfers order of its customers without ensuring the completeness of the supporting documents will be sanctioned by an administrative penalty of IDR5mio per 1 (one) transfer order; 

For Customers

for customers that submitted incorrect details, information and/or supporting documents in relation with their outgoing transfers order will be subject to administrative sanction by BI in the form of (i) admonition letter and/or (ii) administrative penalty of 0.25% from the transaction value, with maximum administrative penalty of IDR 50mio per 1 (one) transfer order.

 

This summary only highlights certain issues under PBI Nr. 21/2019 and may not be complete and comprehensive.
Please visit our website at www.aymp.law for more information about our firm.
For more specific inquiry about this matter or other emerging legal issues in Indonesia, please contact the following lawyers:

- M. Arie Armand (arie@aymp.law)

- Agung Santoso (agung@aymp.law)

 


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