06 Jul 2022
NEWSFLASH: Deadline Looms for Registration of Private Electronic System Operators in Indonesia

In a rather abrupt move that has taken many businesses by surprise, Indonesia’s Ministry of Information and Communications Technology (“MCIT”) has issued a new circular (the “Circular”)[1] that sets a firm deadline of 20 July 2022 by which electronic systems operators (“ESO”) in the private sector (but not the state sector) must register their systems and obtain a registration certificate from MCIT using the Online Single Submission (“OSS”) business licensing system. Failure to register by the deadline will leave an offending private ESO open to administrative sanctions, ranging from written warnings to the blocking of access to the ESO’s electronic system.

The Circular, which is officially dated 14 June 2022, was only published on 22 June 2022, thus giving ESOs less than 30 days to comply.

The registration requirement was originally introduced by Government Regulation No. 71 of 2019 on the Provision of Electronic Systems and Transactions,[2] and MCIT Regulation No. 5 of 2020 on Private ESOs, as amended by MCIT Regulation No. 10 of 2021 (“MR 5/2020”).[3] However, these regulations failed to stipulate a deadline for registration.

Registration of Foreign ESOs Operating in Indonesia

The mandatory registration requirement also extends to a foreign ESO or an ESO that is permanently domiciled outside Indonesia, provided the following conditions are satisfied:

- it provides services within Indonesia;

- it carries on business in Indonesia; and/or

- its electronic system is used, or is offered for use, within Indonesia.

Unfortunately, neither MR 5/2020 nor the Circular specify any thresholds as regards the registration requirement for overseas-based ESOs. The safest interpretation, therefore, would be that all foreign ESOs that satisfy the above conditions must register in Indonesia, regardless of the scale, potential risks or the nature of their activities, and that a failure to comply could leave them liable to having access to their electronic systems blocked in Indonesia.

ABNR Commentary

Given the tight deadline stipulated by the Circular, we would urge all private ESOs to comply with the mandatory registration requirement prior to the deadline in order to avoid the risk of access to their websites, apps or platforms being blocked in Indonesia. It should also be noted that there is likely to be a significant surge in applications for registration as the deadline approaches, which could mean that an application may not be capable of being processed in time. Thus, we would strongly advise clients to register as soon as possible.

By partnersMr. Agung Ahadi Deradjat(aderadjat@abnrlaw.com) andMr. Kevin Sidharta (ksidharta@abnrlaw.com).

This ABNRNewsand its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.