External Debts is one of the sources of domestic economic financing, and requires good management, especially by Non-Bank Corporations. Therefore, Non-Bank Corporations must report their External Debts to Bank Indonesia. Learn more on how to report External Debts, and why should it be reported in our article below.
External Debts (Utang Luar Negeri) of a limited liability company (“PT”) established and domiciled in Indonesia, including foreign investment limited liability company (“PT PMA”) is classified as a part of Foreign Exchange Flow (Lalu Lintas Devisa) activities included in Foreign Currency Liabilities (Kewajiban Finansial Luar Negeri or KFNL).
Pursuant to Bank Indonesia Regulation No. 16/22/PBI/2014 concerning The Implementation of Prudential Principles in Managing External Debt of the Non-Bank Corporation lastly amended by Bank Indonesia Regulation No. 18/4/PBI/2016 (“PBI 16/22/PBI/2014”), Bank Indonesia is authorized to ensure that Non-Bank Corporations manages their External Debts pursuant to Bank Indonesia Regulation concerning prudential principles in managing external debts.
DEFINITION OF EXTERNAL DEBT
Pursuant to Article 1 number 7 of PBI 16/22/PBI/2014, External Debt is defined as Resident’s Debt to Non-Residents in a foreign currency and/or the Rupiah, including financing base on the Sharia principles.
Non-Bank Corporations are required to submit reports of their Foreign Exchange Flow activity, which concerns the following data and information:
It must also be noted that the report includes all Foreign Exchange Flow activities which was done for the interests of the Non-Bank Corporation, or its customers or other parties. Such reports must be accompanied with supporting statements and data concerning Foreign Exchange Flow activities as well as the reporter of the Foreign Exchange Flow.
COMPANY REPORTING OBLIGATION OF EXTERNAL DEBT
Pursuant to Article 4 paragraph 1 and 2 of PBI 16/22/PBI/2014, Foreign Exchange Flow in the form of External Debts must be reported by Non-Bank Corporation to Bank Indonesia in an accurate, truthful, and timely manner. The report is submitted online through Bank Indonesia website.
The Foreign Exchange Flow Report is submitted each month, at the latest on the 15th date of the following month. However, for the report containing the External Debt Plan, the following terms and conditions apply:
PRUDENTIAL PRINCIPLES IN MANAGING EXTERNAL DEBT
Non-Bank Corporation is also required to submit reports to Bank Indonesia in relation to the implementation of prudential principles (Kegiatan Penerapan Prinsip Kehati-hatian or KPPK). The KPPK must be first going through the process of attestation (a procedure done by independent public accountant to give consideration whether an assertion or statement given by reporter is in accordance with the criteria given by Bank Indonesia), information regarding the fulfillment of Credit Rating, and financial report to Bank Indonesia.
Period of KPPK reports are as follows:
The due date of KPPK reporting quarter I year 2015 is on 30 June 2015.
The due date of unaudited KPPK reporting quarter II year 2015 is on 30 September 2015
The submission of information regarding the fulfillment of the Credit Rating and its supplementary documents, such as Credit Rating, date of the rating, and the name of Rating Agency must be conducted at the latest a month after the External Debt is signed or issued.
A corporation signed an External Debt based on loan agreement on 12 February 2016. Hence, the due date to submit the Credit Rating information with its supplementary document is on 31 March 2016.
The submission of KPPK report that has been going through attestation process and audited yearly financial report must be conducted at the latest the end of June after the end of the current year.
The due date to submit KPPK report that has been going through Attestation process year 2015 is 30 June 2016.
The due date to submit audited 2014 financial report is 30 June 2015.
HOW CAN SMART CONSULTING HELP YOU?
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