17 February 2020 (closed)
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The Indonesian Ministry of Law and Human Rights is currently preparing a new Law on Limitation of Cash Transactions (Draft Law). The aim of the Draft Law is to promote cashless transactions in Indonesia. This is done by setting restrictions to cash transactions in Indonesia. It is expected the Draft Law will enter into force somewhere in 2016. In this column we discuss the most important points regulated in the Draft Law. Since the law is currently a draft, its provisions are still subject to changes.
Limitation Cash Transactions
Based on article 3 of the Draft Law, anyone who in one day wishes to conduct cash transactions of 100 million rupiah (or its foreign currency equivalent) or more is required to use non-cash transactions. Examples of transactions are sales transactions, withdrawals, disbursements and payments.
Exceptions to the Limitation
There are certain transactions which are exempted from the above mentioned limitation to cash transactions. The cash transactions which still may amount more than 100 million rupiah (or its foreign currency equivalent) are amongst others cash transactions:
• that take place between financial service providers for business purposes;
• related to payments of salary or pension;
• which the court requires to pay a party;
• in the event of natural disasters;
• which are determined by the head of PPATK (Financial Transactions Center)
Any person who is violating article 3 of the Draft Law, can be subject to the following administrative sanctions:
1. a written warning letter;
2. a public announcement stating the violation or sanctions; and/or
3. administrative fines up to 40% of the transferred amount
Similar sanctions also apply to financial service providers and service providers of goods and services. The exact percentage of administrative fine is however not yet set in the Draft Law.
This column is provided by PNB Law Firm Jakarta