This note is an update of a previous note on applicable regulations.
Regulatory regime of the electronic system operator (ESO)
The principal legislation/regulations relevant to Electronic System Operators (“ESO”) are:
This note is applicable to ESOs in the private sector, which is defined in Article 1(6) of GR 71/2019 (read with Article 1(1) GR 71/2019) and Article 1(6) of MOCI 5/2020.
Article 1(6) GR 71/2019
Electronic System Provider in the Private Sector is the organization of an Electronic System by a Person, Business Entity, and public.
Article 1(6) of MOCI 5/2020
Electronic System Provider (Penyelenggara Sistem Elektronik) in the Private Sector, from this point onward, is referred to as PSE in the Private Sector, is the organization of Electronic Systems by a person, business entity, and community.
Article 1(1) GR 71/2019
Electronic System is a series of devices and electronic procedures which function to prepare, collect, process, analyze, store, display, announce, transmit, and/or disseminate Electronic Information.
Reference to ESOs includes digital services such as social media platforms, electronic commerce providers and OTT (i.e., over-the-top media) services.
The key requirements are:
Registration of ESO with the Ministry of Communication and Informatics (“MOCI”)
ESOs, including foreign-based ones, that provide web services in Indonesia are required to register with the MOCI. (Article 4(1) of MOCI 5/2020)
This Ministerial Regulation is meant to implement GR71.
Sanctions for failing to register is provided in Article 7(2) of MOCI 5/2020, which includes access blocking:
“In the event that PSE in the Private Sector do not register as referred to in paragraph (1)(a), the Minister shall impose an administrative sanction in the form of Electronic System Access Blocking.”
Setting up a local representative office
Where the number of trade transactions exceeds 1000 per year, or more than 1000 deliveries have been made per year, the Foreign Trade Operators through Electronic Systems (“PPMSE”) must set up a local representative office.
This is based on Article 15 (1) and (2) of MOT 50/2020, which states:
Other pertinent regulatory requirements to meet consumer protection laws under MOT 50/2020:
Article 26 (3)(f) on provisions to forward contact details to representatives of foreign electronic trade operators:
Article 26 (5) explains the purpose of the above requirements - for the foreign trader to::
In the event of the termination of an existing representative office, a replacement should be appointed within 14 days. Article 30 of MOT 50/2020 stipulates:
“In the event of a unilateral termination of representation, foreign PPMSEs are required to appoint a new representative within a maximum period of 14 (fourteen) calendar days after one of the parties declared the termination concerned in writing”
The sanction for failing to appoint a representative office
Article 46 of MOT 50/2020 stipulates sanctions that shall be imposed on foreign PPMSEs which fulfil the criteria stipulated in Article 15 but do not appoint its representative in Indonesia. The sanction will be in the form of written warnings that will be given up to 3 (three) times with a maximum of 14 (fourteen) calendar days grace period between each warning. Failure to comply within the period will result in the foreign PPMSE being put on a blacklist and temporary suspension of the foreign PPMSE’s services by the authorized relevant agency.
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Other related articles:
2022 Indonesian Data Protection Law
Electronic Contract Best Practices: Indonesia
Data Controller responsibility in the event of data breach – Indonesia