In early March 2018, President Joko Widodo issued Presidential Regulation No.13 of 2018 on the Implementation of the Know Your Beneficial Owner Principle for the Prevention and Eradication of Criminal Acts of Money Laundering and Terrorism Financing (“Regulation 13/2018”). Regulation 13/2018 sets out the rule that requires Indonesian corporations to state and disclose their beneficial owner(s) (“BO”) to the relevant authority (“Authorized Authority”) and to update this disclosure at least once every year. The information on the disclosed BO is open to the public upon request.
The rule on BO is not exactly novel under the Indonesian financial regulatory framework. Financial service companies are subject to the anti-money laundering requirements that require them to do customer due diligence (CDD) on their customers, and to a certain extent, the beneficial owners of the customers. Also in practice, the Financial Services Authority (Otoritas Jasa Keuangan or “OJK”) requires any publicly listed company to disclose its BO in the disclosure documents (e.g. prospectus) each time such company undertakes a corporate action.
However, Regulation 13/2018 is considered a breakthrough for imposing rules to all types of corporations, be it a limited liability company or any other form of corporations (including non-profit associations and limited liability partnerships), regardless of whether the corporation is publicly listed or privately held. The regulation is expected to have far-reaching coverage and effect on the business operations of corporations. From the Government’s perspective, in addition to its original objective of ensuring anti-money laundering compliance, this regulation can also serve as an instrument to ensure tax compliance.