by Dina Artarini
Bank Indonesia (BI) has recently issued a new circular on the compulsory reporting of offshore loans. Circular No. 6/51/DLN dated 31 December 2004 (Circular) comes into effect from 1 April 2005 and supersedes the existing BI Circular No.2/20/DLN as amended by BI Circular No.3/12/DLN.
The Circular applies to offshore loans of individuals, banks, non-bank institutions including financial institutions and non-financial institutions. An offshore loan of, or exceeding, the amount of US$200,000 (or the equivalent in any other currency) must be reported. Other offshore loans not having any limit must also be reported. However, if the amount of a loan is less than US$200,000, the borrower may report the loan collectively with other offshore loans totalling US$200,000.
Who can submit a report?
The Borrower is responsible for lodging the report, and the Circular provides that the borrower can grant a power of attorney with a right of substitution to any third party, including the lender, to submit the compulsory report on behalf of the borrower.
What kind of loan should be reported?
Any debt of an Indonesian resident to any non-resident made in foreign currency or in Rupiah and deriving from (i) a Loan Agreement; (ii) Debt Securities; (iii) Trade Credits; and (iv) Other Debts are required compulsorily to be reported to BI.
Current accounts, savings accounts and time deposits are exempt from being included in an offshore loan report. Debt securities, trade credits and other debts having a tenor of less than 3 months are also exempt.
The Circular defines a “Debt Security” as any debt acknowledgement letter which is tradable in a domestic or offshore money market or capital market. Commercial paper, promissory notes, medium term notes, floating rate notes, letters of credit for import facilities accepted by a bank, and any money market transactions are included in the expression “Debt Securities”.
Any debt to a supplier of goods and services falls within the definition of “Trade Credits”.
Payment of insurance claims and dividends which are due but not yet paid are included in the category of “Other Debts” which must be reported.
We have sought confirmation from BI as to whether a personal guarantee or a corporate guarantee would fall within the definition of a “Loan”. An official of BI has unofficially advised us that unless the guarantee has become due and payable the guarantor is not obliged to file a report.
When should an offshore loan be reported?
The time limit for reporting an offshore loan has been reduced from 15 working days to 10 days as from the date of signing of the relevant loan document or from the date of issue of the loan or of any changes to it. If the loan is drawn down before signing of the loan document, the loan must be reported no later than 10 days from the date of the first drawdown.
The initial report will include details of the borrower and loan profile as expressly referred to in the Circular. A report should also be submitted if a loan is amended or restructured.
Following the initial report, the borrower or its authorised attorney must file a monthly report relating to the status and realisation of the offshore loan. The monthly report must be filed no later than the 10th day of the following month. Monthly reports are required to be made until the loan is repaid in full.
The borrower may amend a report within 20 days of the date it is submitted.
If the deadline for filing a report falls on a Saturday or public holiday, the report must be submitted on the last business day prior to that deadline.
What happens if the report is late?
A compulsory report is considered to have been filed late if the relevant deadline for submission has expired, and a report is considered not to have been submitted at all if it is not filed within 6 months from the date of expiration of the original deadline.
Sanctions which may be applied by BI for breach of a provision of the Circular include an administrative fine of 100 thousand Rupiah for each day’s delay in the case of a report being filed late and 1 million Rupiah for lodging an inaccurate or incomplete report.
In addition to an administrative fine of 100 thousand Rupiah for each day’s delay, an administrative fine of 0.1% of the total loan is also applied if an offshore loan report is not submitted.
How and where is a compulsory report to be submitted?
The initial report and each subsequent monthly report can be submitted by hand to the following address:
BAGIAN ADMINISTRASI DAN ANALISIS PINJAMAN LUAR NEGERI
Gedung B Lantai 5 Jl. MH. Thamrin No.2 Jakarta
Alternatively, a report can be made on line through the following link:
http://www.bi.go.id/siulweb/backendenweb or http://www.bi.go.id/siulweb/backenwes
