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OBLIGATION TO REPORT ON DRAWDOWNS OF FOREIGN LOANS IN FOREIGN CURRENCY

January 2012 - Finance. Legal Developments by Hanafiah Ponggawa & Partners.

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On 30 September 2011, Bank Indonesia (“BI”) issued BI Regulations concerning foreign exchange, i.e. BI Regulation No.13/20/PBI/2011 concerning Receipt of Export Proceeds in Foreign Currency and Drawdowns of Foreign Loans in Foreign Loans (“PBI 20/2011”) and BI Regulation No.13/22/PBI/2011 concerning Obligation to Report a Drawdowns of Foreign Loans in Foreign Currency (“PBI 22/2011”) both of which came into effect on 2 January 2012.

PBI 20/2011 stipulates among others that the debtor of a foreign currency loan (utang luar negeri or “ULN”) who drawdown the foreign loan in a foreign currency (devisa utang luar negeri or “DULN”) must do so through a Foreign Exchange Bank (Bank Devisa). The obligation is valid for all DULN in the form of cash funds derived from the following: (a) a non-revolving loan agreement which is not used for refinancing; (b) the margin from a facility refinancing previous loan; and (c) debts based on debt securities in the form of bonds, medium term notes, floating rate notes, promissory notes or commercial paper. The accumulated value of the DULN drawdown by the debtor must be the same amount as the commitment value. If it is smaller, then the debtor must deliver a written explanation to BI. PBI 20/2011 further provides that failing to make the report and not delivering the required supporting documents may cause the debtor to be liable to an administrative penalty of IDR 10,000,000 for every DULN drawdown which penalty must be paid to the state treasury account after receiving written notification from BI which comes into effect on 2 July 2012.

BI may verify documents evidencing the debtor’s compliance with DULN drawdown obligations by requesting evidence, records, and other supporting documents with or without involving the relevant institution. An exception given by PBI 20/2011 is that the DULN pursuant to a loan agreement signed before 2 January 2012 need not be drawdown through a Bank Devisa, except where the DULN drawdown derives from an additional ceiling due to the amendment of a loan agreement which is signed after 2 January 2012.

PBI 22/2011 provides that the report must be submitted to BI (by online media, offline media or hardcopy) together with supporting documents (by courier, post, facsimile or other media) between the 1st and the 10th of the following month. It also regulates that if the accumulates value of the DULN drawdown is smaller than the commitment value the debtor must deliver a written explanation to BI at the latest before the expiry of the loan agreement. Failure to do so will make the margin between the commitment and the accumulation of the withdrawal DULN will be deemed to have not been drawn down through a Bank Devisa.

Besides PBIs 20/2011 and 22/2011, BI also issued BI Regulation No.13/21/PBI/2011 concerning Monitoring Bank  Foreign Exchange Traffic Activities (“PBI 21/2011”) which came into effect on 30 September 2011.


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