JAKARTA (TheInsiderStories) – Bank Indonesia (BI) improves policy regarding foreign exchange (forex) flow. In the new policy, bank and customers who do not report or late report forex flow will be imposed a sanction, the central bank wrote an official statement on Tuesday (12/17).
The policy is regulated on PBI No.21/15/2019 that replaces previous policy, PBI No.18/10/PBI/2016 related to monitoring of bank and customer forex flow. This regulation will be implemented on Jan 2, 2020.
In detail, the rule contains several changes from the previous one. First is adjustment of report coverage by adding supporting report in the form of special account report of natural resources forex earnings and forex payments.
Second is the adjustment of report time in forex earning and forex payment transactions. Last is the obligation to inform the aim of the transaction to be put in the Financial Transaction Messaging System (FTMS).
For the rule breaker, there will be administrative sanctions. BI will impose fee sanction of Rp1 million (US$71.41) for each day of delay to bank which submit reports late. Then, the bank that not report the forex traffic will be imposed fines of Rp50 million.
The fine will also be imposed on the bank that submits an inaccurate report with Rp25 million fine for each of invalid content and the maximum fee sanction is Rp50 million.BI asserted that sanction is imposed to encourage transparency and increase information availability in a forex transaction.
The information in forex traffic is very important to form the monetary policy, financial stability, payment system, and Rupiah management. Besides, BI will also use the data to compose balance of payment, investment position and other statistics.
Earlier, the government issued a regulation that aimed to force exporters to keep their forex revenue from natural resources in Southeast Asia’s largest economy financial system. The rule, which took effect July 1, 2019, is one of the government’s efforts to help the country’s economy refill its declining foreign exchange reserves.
Finance ministerial regulation number 98/PMK.04/2019 on tariffs and administrative punishment imposed fines for exporters who violate the export proceed of natural resources and outlines the procedures for imposing levies.
Under the regulation, an exporter of natural resources who not deposit export earnings in a special bank account within a certain period of time is required to pay 0.5 percent of the total forex earned as a fine.
The regulation derived from Government Regulation Number 1 of 2019 on requirements for exporters to put their earnings from natural resources into Indonesia’s financial system. The commodities include products from mines, plantation, forests and the fisheries.
The government regulates the use of export revenues for a number of types of payments, including import tax, debt, dividend, and others, as stipulated in the investment law. Violators of the regulation are required to pay 0.25 percent of their total export earnings.
For the revenues, an exporter is required to have escrow accounts in an Indonesian bank. If the exporter has an escrow account in another country, it must be transferred to a bank in Indonesia.
In addition, if the exporter does not abide by the regulation, the government will issue further punishment in the form of delaying customs services.
“Regarding sanctions, customs and excise will do, whether the export delays or payment of fines, as required regarding the proceeds from natural resource exports,” said finance minister Sri Mulyani Indrawati recently.
She added, that the customs and excise directorate had cooperated through an information system with BI. With the new way, the flow of export goods can be tracked by customs and excise, while the flow of money can be traced through the banking system, the minister stated.
The government also could identify the name of the company, the number of goods, and the amount of foreign exchange they get from the export activity. Indrawati stressed that the regulation is one of the government’s efforts to ensure that forex returns to Indonesia so that it can improve the current account balance.
In November, the country’s forex reserves stood at $117.3 billion, slightly up compared to October at $115.2 billion, Bank Indonesia data showed.
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