INDONESIA Law and Practice Contributed by: Enny Purnomo Widhya, Nugrahani Astiyanti and I Gusti Ngurah Oka Anantajaya, Mochtar Karuwin Komar
1.2.4 Registration, Filing and/or Consent From Government Entities A bill of sale is not subject to any consent from any Indonesian government entity. For aircraft registration purposes, the Directorate General of Civil Aviation (DGCA) will need to be provided with, among others, a copy of the bill of sale (legalised by an Indonesian public notary, seller or the issuing institution) in favour of the aircraft owner. Therefore, delivery of the aircraft should already have occurred before the certificate of registration can be issued by the DGCA. 1.2.5 Taxes/Duties Payable Upon Execution of a Bill of Sale For any tax advice, please consult with an Indonesian tax consultant on this matter. Provisions of the lease concerning only the engine or parts should be recognised and enforceable in Indo - nesia to the extent that they are also recognised and enforceable under the governing law of the lease. 2.1.2 Application of Foreign Laws Law No 1 of 2009 regarding Aviation as amended by Law No 6 of 2023 concerning the Stipulation of Government Regulation In Lieu of Law No 2 of 2022 concerning Job Creation as Law (the “Aviation Law”), which adopts the provisions of the Cape Town Con - vention, provides that a security agreement, title res - ervation agreement, and/or leasing agreement may be entered into based on the law of choice made by the parties to the agreement. However, in practice, courts have been known not to apply the chosen law notwithstanding the fact that the choice of the parties was valid. The court’s reasoning in such circumstances is not always specified. In at least one instance of which the authors are aware, the court held that since it is an Indonesian court and its legal competence is in Indonesian law, it will apply Indonesian law. In another instance the court ruled that it had no jurisdiction since the parties to the transaction had chosen a foreign law. A major part of 2. Aircraft and Engine Leasing 2.1 Overview 2.1.1 Non-Permissible Leases
the reason is the lack of experience in adjudicating disputes governed by a substantive foreign law. The courts are also not used to relying on legal experts or legal opinions in respect of foreign law. 2.1.3 Restrictions Concerning Payments in US Dollars Provisions of the lease relating to rent payments in US dollars should be recognised and enforceable in Indonesia to the extent that they are also recognised and enforceable under the governing law of the lease. 2.1.4 Exchange Controls Indonesia has limited foreign exchange controls. The Indonesian rupiah (which has the acronym IDR) has been, and in general is, freely convertible within or from Indonesia. However, to maintain the stability of the rupiah and to prevent the utilisation of the rupiah for speculative purposes by non-residents, Indone - sia’s Central Bank, Bank Indonesia, has introduced regulations to restrict the movement of the rupiah from banks within Indonesia to: • offshore banks; • an offshore branch of an Indonesian bank; or • any investment denominated in rupiah by foreign parties and/or Indonesian parties domiciled or per - manently residing outside Indonesia, thereby limiting offshore trading of existing sources of liquidity. Pursuant to the regulation of Bank Indonesia con - cerning Transactions in Foreign Exchange Markets, cross-border remittances of rupiah through the Indo - nesian banking system are prohibited. The Regula - tion is intended to achieve and maintain stability of the rupiah by restricting or limiting the ability of local banks (including branches of foreign banks) operating in Indonesia to engage in certain rupiah and foreign currency credit, investment and derivative transac - tions of foreign exchange against the rupiah. In addition, Bank Indonesia has the authority to request information and data concerning the foreign exchange activities of all people and legal entities that are domiciled, or who plan to be domiciled, in Indone - sia for at least one year.
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