Enforcement of Using Rupiah within the Territory of the Republic of Indonesia
The Central Bank of Indonesia issued Regulation No. 17/3/PBI/2015 on the Obligation to use Rupiah within the territory of the Republic of Indonesia (“Bank Indonesia Regulation“) which regulates several provisions, amongst others, that Rupiah is used to settle financial obligations and other payment transactions conducted in Indonesia, both cash and non-cash transactions. On top of that, business entities should also state the price of goods and/or services only in Rupiah.
Exemptions of Using Rupiah
- certain transactions in relation to implementation of state budgets;
- grant from and for foreign countries;
- international commercial transactions;
- foreign exchange Deposit in Bank;
- international payment transactions.
This Bank Indonesia Regulation is an implementation of provisions in Law No. 7 Year 2011 on Currency (“Indonesian Currency Law”) which imposed the general requirement to use Rupiah for certain transactions in Indonesia.
The Bank Indonesia Regulation required for obligation to use Rupiah for non-cash transactions, which will be effective starting from July 1, 2015.
Any violations on the Regulation:
- Written notice;
- Penalty of 1% (one percent) from the transaction value with maximum of Rp1,000,000,000.00 (one billion Rupiah); and/or
- Prohibition of entering payment transactions.
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