Bank Indonesia Lowers the Foreign Exchange Transfer Threshold and Mandates Transaction Supporting Documents under Regulation of a Member of the Board of Governors of Bank Indonesia Number 8 of 2026

Introduction

On March 30, 2026, Bank Indonesia issued Regulation of the Member of the Board of Governors Number 8 of 2026 on the Third Amendment to Regulation of the Member of the Board of Governors Number 21/28/PADG/2019 on the Monitoring of Bank and Customer Foreign Exchange Flow Activities (“PADG 8/2026”), which took effect on April 1, 2026. PADG 8/2026 adjusts the value threshold for outbound fund transfers in foreign exchange by lowering the threshold at which Customers are required to submit supporting documents to the Bank. In the recitals, Bank Indonesia states that the monitoring of foreign exchange flows serves to ensure that foreign exchange transactions are based on real economic activities.

Comparison

PADG 8/2026 adjusts the transaction value threshold for outbound fund transfers in foreign exchange that require the submission of supporting documents. These provisions were previously governed in Regulation of the Member of the Board of Governors Number 21/28/PADG/2019 on the Monitoring of Bank and Customer Foreign Exchange Flow Activities (“PADG 21/2019”) as last amended by Regulation of the Member of the Board of Governors Number 5 of 2023 on the Second Amendment to Regulation of the Member of the Board of Governors Number 21/28/PADG/2019 on the Monitoring of Bank and Customer Foreign Exchange Flow Activities (“PADG 5/2023”). The following is the comparison between PADG 8/2026 and PADG 21/2019 as last amended by PADG 5/2023:

Key Provisions

Obligation to Submit Transaction Supporting Documents

PADG 8/2026 amends the provisions of Article 27 paragraph (1) by adjusting the transaction value threshold for outbound fund transfers in foreign exchange, which requires Customers to submit Outbound Fund Transfer Supporting Documents to the Bank for transactions with an equivalent value above USD 50,000.00 (fifty thousand United States dollars). This provision also applies to Natural Resources (Sumber Daya Alam, “SDA”) Exporters conducting outbound fund transfers through Natural Resources Export Proceeds (Devisa Hasil Ekspor, “DHE”) Special Accounts as referred to in Article 27 paragraph (2). The Bank ensures the completeness of the Outbound Fund Transfer Supporting Documents prior to accepting the Fund Transfer Order.

Types of Proof Documents for Real Economic Activities

Under the Elucidation of Article 27 paragraph (1), Outbound Fund Transfer Supporting Documents take the form of documents indicating the existence of an underlying transaction for the outbound fund transfer in foreign exchange. These documents include, among others:

1. Bills or invoices from sellers of goods and services abroad;

2. Loan contracts or other documents indicating the obligation to pay loan interest and/or principal;

3. Contracts or other documents indicating the obligation to pay royalties or other intellectual property rights;

4. General Meeting of Shareholders (Rapat Umum Pemegang Saham, “RUPS”) documents indicating the obligation to distribute dividends to shareholders abroad;

5. Employment agreements or other personnel documents indicating the obligation to pay salaries or other income;

6. Liquidation documents of domestic assets representing the rights of overseas parties; and/or

7. Exemption or deferral documents for the obligation to use Rupiah for domestic foreign exchange transactions.

The Use of Statement Letters as Alternative Documents

The provisions of Article 29 paragraph (2) continue to allow Customers to submit documents other than those listed in Annex II of PADG 21/2019, provided they are accompanied by a statement letter according to the format in Annex III of PADG 21/2019, signed by the authorized party. PADG 8/2026 amends the provisions of paragraph (5) regarding the reuse of evidence or documents previously submitted to the Bank, and refines the Elucidation of paragraph (6), which affirms that the Bank must receive the supporting documents before the execution of transaction settlement. Article 29 paragraph (7) asserts that Customers are responsible for the accuracy of the documents and statement letters submitted to the Bank.

Exemption of Supporting Document Requirements (Cash Management)

PADG 8/2026 merely refines the Elucidation of Article 27 paragraph (5) by providing additional operational examples. The provisions exempting the obligation to submit Outbound Fund Transfer Supporting Documents for deposit transfer transactions by the same Customer domestically remain applicable as in the previous regulation. This exemption also applies to specific transactions conducted by the Bank for its operational purposes.

Administrative Sanction Reporting Mechanism

The administrative sanction reporting mechanism fundamentally remains applicable as under the previous provisions. PADG 8/2026 only adjusts the nomenclature in Article 40 letter b, ensuring that the delivery of sanction information for corporate Customers in the form of State-Owned Enterprises (SOEs) is now specifically addressed to the government agency responsible for SOEs regulation, in addition to being forwarded to the Financial Services Authority (Otoritas Jasa Keuangan, “OJK”) and the Indonesia Stock Exchange (Bursa Efek Indonesia, “BEI”).

Transitional Provisions

Article II of PADG 8/2026 introduces transitional provisions governing the submission of Outbound Fund Transfer Supporting Documents during the initial period in which the provisions take effect. For outbound fund transfer transactions in foreign exchange with a value above USD 50,000.00 up to USD 100,000.00 conducted between April 1, 2026, and April 30, 2026, Customers may submit an official letter containing the date, nominal value, and reason for the transfer as a temporary document. Customers are then required to complete the Outbound Fund Transfer Supporting Documents in accordance with Annex II of PADG 21/2019 no later than July 31, 2026.

Closing

PADG 8/2026 lowers the threshold for the obligation to submit Outbound Fund Transfer Supporting Documents from above USD 100,000.00 to above USD 50,000.00, meaning that more foreign exchange transactions now require documents demonstrating an underlying transaction or a statement letter in accordance with the provisions before the Bank processes the transfer, with an exemption for fund transfers between accounts owned by the same Customer domestically. During the initial implementation period, transitional provisions apply for transactions valued above USD 50,000.00 up to USD 100,000.00 from April 1, 2026, to April 30, 2026, which may use an official letter as a temporary document, with the obligation to complete the documents according to Annex II of PADG 21/2019 by July 31, 2026. Furthermore, Bank Indonesia submits administrative sanction information to relevant authorities, meaning that incomplete or non-compliant documents could potentially hinder the transfer process and trigger reporting to the Financial Services Authority, ministries or agencies, and/or the Indonesia Stock Exchange, ultimately requiring Customers to ensure document readiness and adjust internal processes so that transactions can continue smoothly.