Legal UpdatesPublicationsUsing Domestic Banking Branches Abroad for Overseas Mineral Resources and Coal Sales

On September 5, 2018, the Minister of Energy and Mineral Resources (“MEMR“) issued the Decree of the Minister of Energy and Mineral Resources of the Republic of Indonesia Number 1952 K / 84 / MEM / 2018 concerning the Use of Domestic Banking or Indonesian Banking Branches Abroad for Overseas Mineral and Coal Sales.

In this regulation, MEMR requires holders of Mining Business Permits, Special Mining Business Permits, Contracts of Work, Coal Mining Concession Work Agreements, Special Production Operation Mining Permits for Processing and/or Purification, and Special Production Operation Mining Permits for Transportation and Sales to use payment mechanism called the Letter of Credit and to fully return the proceeds from the sale of minerals and coal to foregin countries into domestic banking accounts or Indonesian banking branches abroad.

Supervision and guidance of this obligation are carried out by the Director General of Mineral and Coal (“DGOMC”). Therefore, if the holders of the permits mentioned above do not carry out their obligations under this Decree, the DGOMC can revoke the recommendation for approval of mineral exports. For holders of the above licenses, except for holders of the Contract of Work, the DGOMC can also issue a recommendation to revoke registered exporters if they do not carry out the obligations stated in this regulation. In the event of revocation of approval recommendation for mineral export or recommendation for revocation of a registered coal exporter, the Work Plan and Budget (“RKAB“) of the holder of the License will be adjusted in the following year. Then, specifically for holders of Special Production Operation Mining Permits for Transportation and Sales who do not carry out the obligation under this regulation, the DGOMC can give sanctions in the form of written warning and temporary suspension of the business activities. (ana)

 


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Dendi Adisuryo
dendi.adisuryo@adcolaw.com

Liza Mashita
liza@adcolaw.com

@2020 ADCO Law. All rights reserved.
This publication has been prepared by Aditya Yudhistira for general informational purposes only to provide clients with information on recent legal developments and is not intended as legal advice or opinion.

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