The Circular Letter of Bank Indonesia No. 17/11/DKSP (“BI Circular Letter No. 17/11/DKSP“) has been issued by Bank Indonesia, which has come into force on June 1, 2015 based on the the mandate of article 22 of Bank Indonesia Regulation No. 17/3/PBI/2015 concerning the Mandatory Use of Rupiah in the territory of the Republic of Indonesia (“BI Regulation No. 17/3/PBI/2015“) which states that further provisions of BI Regulation No. 17/3/PBI/2015 are stipulated under this BI Circular Letter.
This Circular Letter governs provision on the implementation of Bank Indonesia Regulation No. 17/3/PBI/2015 which basically has been described in such regulation. ¬†There are however further provisions along with its elucidations that are set out as follows:
A. General Provision
B. Obligation to Price Label on Goods and/or Services in Rupiah
C. Implementation of Mandatory Use of Rupiah For A Written Agreement of Strategic Infrastructure Project
– the application of an exception with respect to the mandatory use of Rupiah shall be filed by a party who requests such exemption while the purpose in using foreign currency in a payment transaction or the settlement of obligation shall also be disclosed.
D. Implementation on the Mandatory Use of Rupiah in Non Cash Transaction for Businessmen with Certain Characteristic
In addition to the above considerations, the compliance of businessmen to Bank Indonesia provisions on the obligation to accept foreign exchange earnings from export activity and the application of the precautionary principle in the management of the foreign debt of non-bank corporation are also deemed as considerations that should be taken into account by Bank Indonesia.
E. Supervision on the Compliance of the Use of Rupiah in the Territory of the Republic of Indonesia
Bank Indonesia has its authority in requesting for report, statement, and/or data towards any party with respect to the implementation of the mandatory use of Rupiah which is therefore making the party responsible to submit report, statement, and/or data mentioned to Bank Indonesia if requested. For this reason, the submission of report or mail shall be submitted to Bank Indonesia in Indonesian language to:
Departemen Kebijakan dan Pengawasan Sistem Pembayaran Kompleks Perkantoran Bank Indonesia Gedung D lantai 5 Jl. M.H. Thamrin No. 2, Jakarta 10350.
G. Other provisions
H. Transitional Provisions
With respect to the exception on the prohibition to refuse the acceptance of Rupiah towards any party, as regulated under PBI¬† No. 17/3/PBI/2015 or BI Circular letter, it is said that such exception only applies to the written agreement of payment or settlement of obligation in foreign currency in which its payment method is settled through a non cash transaction. In terms of this, besides the enforceability of PBI¬† No. 17/3/PBI/2015, the mandatory use of rupiah for non cash transaction is about to become effective on 1 July 2015.
Therefore, a written agreement concerning payment or settlement of obligation in foreign currency made prior to 1 July2015 shall remain valid until the expiration of such written agreement.
The written agreement, a derivative or implementation of a master agreement made from1 July 2015, which is treated as a stand-alone agreement shall be subject to the provisions concerning mandatory use of Rupiah in Indonesia.
Furthermore, the extension of the period and/or amendment to the written agreement made from 1 July 2015 shall be subject to the provisions regarding the obligation to use Rupiah in Indonesia.
Such amendment include changes regarding parties to the agreement, price of the goods and/or services, and/or object of the agreement.