Date : 11 August 2020 Author : IKRAIKRA

In July 2020, President Joko Widodo issued Presidential Regulation No. 82 of 2020 on the Committee for the Corona Virus Disease (COVID-19) Handling and the Recovery of the National Economy (“Presidential Regulation 82/2020”). Several government institutions, including the Offshore Commercial Loan Coordinating Team (“PKLN Team”), are now dissolved by this regulation.  Presidential Regulation 82/2020 also revokes Presidential Decree No. 39 of 1991 on the Coordination of the Management of Offshore Commercial Loans (“Presidential Decree 39/1991”), being the previous regulation which formed the PKLN Team and contained the requirements for obtaining PKLN Team’s approval for certain offshore loans (eg those used for financing government-related projects) and/or for certain borrowers (eg state-owned companies), as well as the reporting obligations to the PKLN Team with respect to offshore loans.  Since the PKLN Team is dissolved and the Presidential Decree 39/1991 is revoked, these requirements and obligations are theoretically no longer in force.

Presidential Regulation 82/2020 further provides that the roles and functions of the PKLN Team will be transferred to the Ministry of Finance (“MOF”), which already have the roles to supervise offshore loans as stipulated under Presidential Decree No. 59 of 1972 on Offshore Loans (“Presidential Decree 59/1972”).  Note that Presidential Decree 59/1972 is still in force, and this decree requires (1) state-owned companies to obtain approval from the MOF for their offshore loans and to make periodical reporting to the MOF, and (2) private companies to make reporting on their offshore loans to the MOF.  Pending further regulations issued by the Indonesian government on this matter, it is still unclear on how the MOF will carry out the roles and functions of the PKLN Team, particularly since such roles and functions are regulated under Presidential Decree 39/1991 (which has now been revoked by Presidential Regulation 82/2020).  We will continue to monitor further updates on this matter.