The Indonesian Financial Transaction Reports and Analysis Centre has recently issued Decision No. 3/9/KEP.PPATK/ 2004 on Cash Transactions Exempt from Compulsory Reporting (the “Decision” or “PPATK 3/9/2004”). This Decision has been issued to facilitate compliance with the compulsory reporting procedures contained in Law No. 15 of 2002 as amended by Law No. 25 of 2003 on the Criminal Act of Money Laundering (the “Money Laundering Law”), specifically with respect to Article 13(5) and exempted cash transactions.

Cash transactions are generally defined as any single or a series of transactions in one day with a cumulative total of IDR 500 million or any foreign currency equivalent. Article 3 stipulates those transactions that are exempt from the compulsory reporting procedures for cash transactions; namely, inter-bank transactions, government transactions, Central Bank (Bank Indonesia) transactions, salary payments, pension payments, and any other transaction stated by the Chairperson of the Indonesian Financial Transaction Reports and Analysis Centre (the “PPATK”).

Article 8 of the decision details the procedures to be conducted by requesting party. Exemption application process will require the requesting party to identify the relevant transactions, submit the relevant accounts highlighting a consistent trend of cash transactions exceeding the cash transaction limit, and the reasons considered in requesting the exemption.

The current list of additional exempted transactions is contained in the Attachment to this Decision. The following types of businesses are currently exempted from the compulsory reporting procedures: Toll way providers; supermarkets, hypermarkets, department stores and equivalent types of business; parking providers; service stations; the International Air Transport Association (“IATA”); foreign consular representatives; international organizations (such as the United Nations, World Bank, IMF, and the ADB among others); formal education providers; telecommunications providers; hospitals; and electricity providers.

This Decision is expected to facilitate continued compliance with the provisions of the Money Laundering Law, particularly with respect to compulsory reporting procedures. It is important to note that compulsory reporting of cash transactions is a fundamental tenet of the Government’s program to eradicate money-laundering activities.