Ada Pertanyaan? Hubungi Kami 
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Ada Pertanyaan? Hubungi Kami Christina Desy, Fathan Qorib, Abdul Razak Asri
Aiming to strengthen the rupiah’s exchange rate, Bank Indonesia finally issued Regulation No. 17/3/PBI/2005 on Mandatory Use of Rupiah Currency in Indonesian Territory (“Regulation”). While the mandatory use of rupiah is also provided for under the Currency Law, the Regulation sets out more detailed provisions on the types of transactions that must use rupiah.In force since the first of this month, the BI Regulation is having an impact on many business sectors in Indonesia, including law firms that regularly use foreign currencies such as US dollars. Many law firms are known to primarily use USD instead of IDR when charging for their services and also paying the salaries of their employee lawyers.
Commenting on this situation, Mohamad Kadri, a founder and partner of AKSET Law Firm, believes that law firms may still calculate their salary payments in foreign currency but must apply a pre-determined conversion rate and settle payments in rupiah.
In addition to salary payments, Mr. Kadri also highlights the issue of lease payments for law firm offices. With foreign loans often used to fund office building construction, many developers in Indonesia require their tenants to make payments in a foreign currency. Given these existing practices, Mr. Kadri believes it is import to properly consider existing market circumstances for the implementation of this regulation.
Noting that this Regulation has created much anxiety within the business sector, BI has issued some additional official statements. Eko Yulianto, Director General of BI’s Department of Money Management, explained that the mandatory use of rupiah applies to both cash and non-cash transactions. However, the Regulation still provides certain exemptions.
Foreign currency may still be used in certain transactions as provided for under applicable laws and regulations. Such exemptions include transactions for state-budget enforcement, grants from or to foreign countries, or international financing transactions for foreign parties.
In addition, the BI Regulation also provides for savings in foreign currencies as well as foreign exchange transactions by banks and transactions of commercial paper issued by the government.
“Violation of this regulation may result in imprisonment for one year or a maximum penalty of IDR 200 million,” said Mr. Yulianto.
(For more information on the Regulation, see ILB No. 2623)
(hot/kc)
Christina Desy, Fathan Qorib, Abdul Razak Asri
Aiming to strengthen the rupiah’s exchange rate, Bank Indonesia finally issued Regulation No. 17/3/PBI/2005 on Mandatory Use of Rupiah Currency in Indonesian Territory (“Regulation”). While the mandatory use of rupiah is also provided for under the Currency Law, the Regulation sets out more detailed provisions on the types of transactions that must use rupiah.In force since the first of this month, the BI Regulation is having an impact on many business sectors in Indonesia, including law firms that regularly use foreign currencies such as US dollars. Many law firms are known to primarily use USD instead of IDR when charging for their services and also paying the salaries of their employee lawyers.
Commenting on this situation, Mohamad Kadri, a founder and partner of AKSET Law Firm, believes that law firms may still calculate their salary payments in foreign currency but must apply a pre-determined conversion rate and settle payments in rupiah.
In addition to salary payments, Mr. Kadri also highlights the issue of lease payments for law firm offices. With foreign loans often used to fund office building construction, many developers in Indonesia require their tenants to make payments in a foreign currency. Given these existing practices, Mr. Kadri believes it is import to properly consider existing market circumstances for the implementation of this regulation.
Noting that this Regulation has created much anxiety within the business sector, BI has issued some additional official statements. Eko Yulianto, Director General of BI’s Department of Money Management, explained that the mandatory use of rupiah applies to both cash and non-cash transactions. However, the Regulation still provides certain exemptions.
Foreign currency may still be used in certain transactions as provided for under applicable laws and regulations. Such exemptions include transactions for state-budget enforcement, grants from or to foreign countries, or international financing transactions for foreign parties.
In addition, the BI Regulation also provides for savings in foreign currencies as well as foreign exchange transactions by banks and transactions of commercial paper issued by the government.
“Violation of this regulation may result in imprisonment for one year or a maximum penalty of IDR 200 million,” said Mr. Yulianto.
(For more information on the Regulation, see ILB No. 2623)
(hot/kc)