EODB INDONESIA 2018 - 2019 - Getting Credit Handbook

EODB 2019 Handbook for Getting Credit Indicator
The Getting Credit - Legal Rights indicator measures the legal framework for secured transactions by
examining whether collateral and bankruptcy laws for movable assets facilitate lending.
IMPORTANT: This questionnaire is divided into four sections: Section 1 focuses on reform updates, Section 2 on
the secured transactions system in general, Section 3 on the case study assumptions, and Section 4 on non-
possessory security interests in movable property.
Section 1. Reform Updates
Reforms of secured transactions and insolvency laws
a. Have there been any reforms or amendments of secured transactions law(s) or regulations in your
economy between June 1, 2016, and now? (Please describe in detail, including the date of adoption, the date of
official publication in the official gazette if this is required, and the date of entry into force. We would greatly
appreciate it if you could also send us an electronic copy of the law.)
Yes.
1. For insolvency regulation - On 25 April 2016 the Supreme Court issued Circular Letter of the
Supreme Court No.2 of 2016 on the Improvement of Efficiency and Transparency of Bankruptcy
and Suspension of Payments in Courts.
2. Issuance of Bank Indonesia Regulation No.18/21/PBI 2016 on Debtor Information System to
establish a robust debtor information system, that involves the Credit Information Management
Institution (LPIP) that would allow swift debtor’s data sharing to enable efficient credit activities in
Indonesia.
b. Are you aware of any plans to change the secured transactions and insolvency law(s) by June 1, 2017, or
in the near future? (Please describe in detail, providing dates when possible.)
Yes. Reform on the fiducia security website allows the public to access the security register
IMPORTANT: This section of the questionnaire focuses on the secured transactions system as a whole in
reference to both incorporated and non-incorporated entities. (Debtors that are incorporated entities are understood
as separate legal entities incorporated through a registration process established through legislation. Non-
incorporated entities are considered non-registered partnerships, sole proprietorships and individuals).
Section 2. Secured Transactions System
Integrated and functional approach to secured transactions
(Secured transactions are here understood as all transactions that create a right in any type of asset meant to
secure the performance of an obligation. For the purposes of our study the focus is on non-possessory security
interests, fiduciary transfer of title, financial leases, assignment of receivables and sales with reservation of title.)
For both incorporated and non-
incorporated debtors
Last year's answers
For both incorporated and non-
incorporated debtors
This year's answers
a. Which regulation, if any,
covers fiduciary transfer of
title? (Fiduciary transfer is
understood here as transfer of
ownership for security purposes
until the debt is extinguished.
The debtor may retain
possession of the assets. An
Law 42/1999 1. Law No.42/1999 on Fiduciary
Transfer Security,
2. Government Regulation No.21 of
2015 on Fiduciary Transfer Security
Registration Procedures and Costs to
make a Fiduciary Transfer Security
Deed;

example: Company/individual
“A” transfers the title of
machine “B” to bank “C” as
security for the loan and expects
to retrieve ownership following
payment of the debt.)
3. Minister of Law and Human
Rights Regulation No.8 of 2013 on
Delegation for Signing of Fiduciary
Transfer Security Certificate;
Application of Electronic Fiduciary
Transfer Security Registration; and
Procedures for Electronic Fiduciary
Transfer Security Registration.
b. Do fiduciary transfers of
title have to be registered to be
enforceable against third
parties? If yes, please specify
the name of the registry.
Yes, fiduciary transfer of title shall
be registered at the Fiducia
Registration Office online by any
interested party.
Same as last year
c. Which regulation, if any,
covers financial lease
agreements? (An example:
Company/individual “A” agrees
to lease machine “B” from
company “C”. The lease
agreement guarantees the use of
the vehicle and guarantees that
“C” receives regular payments
from “A” for a specified period
of time. Both “A” and “C” must
uphold the terms of the contract
for the lease to remain valid.)
Minister of Finance Regulation No
84/PMK.012/2006 on Financing
Company and OJK Regulation No.
29/POJK.05/2014
Financial Services Authority (OJK)
Regulation No.29/POJK.05/2014
concerning Operations of Financing
Company Business
d. Do financial leases have to
be registered to be enforceable
against third parties? If yes,
please specify the name of the
registry.
No No
e. Which regulation, if any,
covers assignment of
receivables and outright
transfer of receivables?
(Assignment of receivables is
understood here as the creation
of a security right in a receivable
that secures the performance of
an obligation. Although outright
transfers of receivables are
transfers not intended to secure
an obligation, for convenience of
reference the term is included in
the assignment of receivables.
An example:
Company/individual "A" assigns
its accounts receivable "B" to
lending company "C" in return
for a loan. Company "C" gets
the right to collect the
receivables if "A" fails to repay
the loan in time.)
Assignment of receivables for the
security purpose is in the form of
fiducia. It is regulated under Law
42/1999. The outright transfer of
receivables is governed in Article
613 of Indonesian Civil Code.
Assignment of receivables for the
security purpose is conducted in the
form of fiduciary transfer security
under Law No.42 of 1999. The
outright transfer of receivables is
governed in Article 613 of the
Indonesian Civil Code. Assignment
of receivables for financing
company in the form of factoring
company is regulated under
Financial Services Authority (OJK)
Regulation No.29/POJK.05/2014
concerning Operations of Financing
Company Business
f. Do assignments of
receivables and outright
transfers of receivables have to
be registered to be enforceable
against third parties? If yes,
Yes. Fiduciary security over
account receivable shall be
registered. Meanwhile, outright
transfer of receivables shall be
notified to or be acknowledged by
Yes. Fiduciary transfer security over
accounts receivable shall be
registered. Outright transfer of
receivables shall be notified to or be

please specify the steps of the
notification process or the
name of the registry.
the related third party. Steps of
fiducia online registration process
are: a. Completing the application
form; b. Printing the application
evidence; c. Paying the application
fee to the bank appointed by the
Ministry of Law and Human Right.
Following the above, a fiduciary
certificate will be issued.
acknowledged by the initial debtor.
Steps of fiduciary transfer security
are: (a) completing the application
form; (b) printing the application
evidence; (c) paying the application
fee to the bank appointed by the
Ministry of Law and Human Rights.
Following the above, a fiduciary
transfer security certificate will be
issued.
g. Which regulation, if any,
covers retention-of-title
sales?(An example: The title of
inventory remains vested with
seller “A” until the purchase
price has been paid in full by
buyer company/individual “B”.)
Not Applicable Book III of the Indonesian Civil
Code on Contracts adopts the
freedom of contract principle (in
article 1338) so technically parties to
an agreement is able to agree to put
in a provision on retention-of-title
sales. In order to avoid ambiguity of
the retention-of-title provision in
relation to the provision of Article
1458 and 1459 of the Civil Code a
Seller should also put in place
fiduciary transfer security protection
in addition to the retention-of-title
provision. Article 1458 of the Civil
Code provides that a sale of goods is
considered has been taken place if
the seller and buyer have agreed on
the goods and price of such goods
even if the goods have not been
delivered to the buyer. Article 1459
of the Civil Code provides that the
title over goods shall not be
transferred to the buyer unless upon
delivery of such goods to the buyer.
h. Do retention-of-title sales
have to be registered to be
enforceable against third
parties? If yes, please specify
the name of the registry.
Not Applicable This retention-of-title sales does not
need to be registered
i. Does the law allow for
women’s personal property to
be given as a collateral for a
loan taken for commercial
activities?
New question. Please provide an
answer
Yes. The fiduciary transfer security
Law No.42/1999 does not
differentiate between men and
women's personal property that can
be given as a collateral for a loan
taken for commercial activities
j. If yes, can such personal
property as:
(i) jewelry;
(ii) household appliances; and
(iii) furniture be given as a
collateral?
Please provide the article of
law.
New question. Please provide an
answer
Yes. Based on Article 1.4 of Law
No.42/1999 a property is defined as
any goods that can be owned and
transferred , either tangible or
intangible, either registered or not
registered, either movable or
immovable that cannot be
encumbered with a mortgage (hak
tanggungan).
Did you make any changes from last year’s answers?
Yes

If yes, please indicate whether the changes reflect a correction (specify when the relevant provision was put into
place) or a reform (specify the date of entry into effect) and explain.
Correction
Comments:
Last year's answer does not reflect the provision of Book III of the Indonesian Civil Code that adopts the freedom of
contracts principle that technically allows for a Seller and Buyer to agree on the retention-of-title provision.

Section 3. Case Study Assumptions
REMINDER: For the following sections, please base your answers on non-possessory security interests in movable
property—or, if these are not allowed in your economy, on fiduciary transfer-of-title arrangements.
CASE STUDY
ABC (the Debtor):
1. Is a Perseroan Terbatas (PT). The company has 50–100 employees and is an incorporated entity.
2. Is 100% domestically owned.
3. Has its registered office and only base of operations in Jakarta.
BizBank (the Creditor):
• Is a commercial bank that is 100% domestically owned.
SCENARIOS
Note: Please consider Scenario A or B (as indicated) when completing section 4 on non-possessory security
interests. This will allow us to measure the flexibility of your economy’s secured transactions system.
Scenario A: Security interest in ONE
CATEGORY of movable assets
Scenario B: Security interest in the company’s
COMBINED movable assets
• As collateral for a loan ABC grants BizBank
a non-possessory security interest in one
category of revolving movable assets, for
example its accounts receivable or inventory.
• ABC keeps ownership and possession of the
assets.
• ABC grants BizBank a business charge,
enterprise charge, floating charge or any other
charge that gives a security interest over
ABC’s combined assets.
• ABC keeps ownership and possession of the
assets.

Section 4. Non-possessory Security Interests
Please update the data, taking into account the assumptions of the case study. For your convenience, last year’s
answers are included in this part of the questionnaire. They represent a unified answer based on the inputs we
received from various contributors last year.
1. Assets and their description
1.1 Please answer the following questions based on Scenario A: Security interest in ONE CATEGORY of
movable assets
Last year's answer This year's answer
a. Can ABC (the Debtor)
grant BizBank (the Secured
Creditor) a non-possessory
security interest over only
its accounts receivable (e.g.,
the amounts that ABC expects
to receive from third-party
buyers for goods or services
that ABC sold to them) or
the outstanding debts owed
to ABC by third parties?
Yes, based on Art.9 (1) of
Fiduciary Law.
Yes
Based on Article 9(1) of Law No.42/1999 on the
Fiduciary Transfer Security
a. 1. According to the law,
can the accounts receivable
or outstanding debts be
described in general terms
(e.g., “all accounts
receivable”) both in the
security agreement and
when the security interest is
registered, or do they need
to be specified with
particularity?
Article 9 of Law No. 42/1999
and its elucidation allows for
a general such a general
description.
Yes
Article 9(1) of Law No.42/1999 on the Fiduciary
Transfer Security allows for such a general
description
b. Can ABC (the Debtor)
its inventory?
Yes, based on Art.9 (1) of
Fiduciary Law.
Yes
Based on Article 9(1) of Law No.42/1999 on the
Fiduciary Transfer Security
b. 1. Are there any major
restrictions or requirements
prescribed by law when
using inventory as security?
(e.g., preserving the
stipulated value of inventory,
specifically describing the
storage location, updating
lists)
No, the deed of Fiduciary
security shall contain the
details of the type, brand and
quality of such inventory
(elucidation Art.6.c of
Fiduciary Law).
No
The deed of fiduciary transfer security shall
contain details of the type, brand and quality of
such inventory (elucidation of Article 6.c. of Law
No.42/1999 on Fiduciary Transfer Security
b. 2. According to the law,
can the inventory be
described in general terms
(e.g., “all laptop inventories”
rather than “PXS laptop,
serial number 3278632,
metal-colored, 14-inch
screen”) both in the security
agreement and when the
description.
Yes
Transfer Security and its elucidation allows for
such a general description

security interest is
registered?
c. Can ABC (the Debtor)
its tangible movable
property? (e.g., machinery,
furniture, livestock, crops,
etc.)
Yes Yes
such matter
c. 1. According to the law,
can tangible movable
property be described in
general terms (e.g., “300
head of Hereford cattle”
rather than “Roger Prime
Blue Ribbon Hereford bull,
tattoo #125, breeding registry
#456”) both in the security
registered?
description.
Yes
such a general description
No
place) or a reform (specify the date of entry into effect) and explain
-Click to Select-
Comments:
Not applicable

1.2 Please answer the following questions based on Scenario B: Security interests in a COMBINED
CATEGORY of movable assets
a. According to the law, can
ABC (the Debtor) grant
BizBank (the Secured
Creditor) a security interest
in a combined category of
assets (e.g. a floating charge
or an enterprise charge)?
No Yes
In Indonesia security interest in a combined
category of assets is also provided by using the
fiduciary transfer security for movable assets
based on Article 9(1) of Law No.42/1999 on the
Fiduciary Transfer Security or by using mortgage
or Hak Tanggungan under Law No.4 of 1996 on
Mortgage over Land and Land-associated
Objects (Hak Tanggungan)
b. According to the law, is
there a limitation on the
assets that can be included
in this security interest?
(e.g., collateral is accessory
to a mortgage, specific
description of location of
movables, updating of lists of
collateral upon change, limit
in value)
Non-applicable No
fiduciary transfer security can be put on
movable objects and contractual objects
including receivables while Hak Tanggungan is
used to put security interests over immovable
objects including land and building
c. According to the law, can
this collateral be described
in general terms (e.g., “all
combined assets of the
enterprise”) both in the
security agreement and
when the security interest is
registered?
Non-applicable Yes
such a general description for movable and
contractual assets while Article 11 of Law
No.4/1996 on Hak Tanggungan requires clear
description of the immovable property that
becomes the security object
Yes
Correction
Comments:
Last year's answer does not take into account possibility of having security interests over combined company's
assets both movable and immovable assets through fiduciary transfer security for movable and contractual assets
and Hak Tanggungan for immovable assets.

1.3 Can ABC (the Debtor) use the following movable assets to secure a loan?
a. Can ABC (the Debtor)
use the following movable
assets to secure a loan:
future assets (e.g., ABC
knows that it will receive a
fleet of trucks in the future
and uses them as collateral)
and after-acquired property
(e.g., property that it has not
yet acquired and that it may
never acquire, or present and
future inventory)?
Yes, to both types of assets,
based on Art.9 (1) of
Fiduciary Law.
Yes
Yes, to both types of assets based on Art.9(1) of
Law No.42/1999 on Fiduciary Transfer Security
b. By law, does the security
interest automatically
extend to “products,
proceeds and replacements”
of the original collateral?
Does it apply to Scenarios A
and B? (An example: If the
original collateral is a pile of
lumber, the products of this
asset could be the wooden
furniture made from it; the
proceeds could be the money
received from selling the
furniture or the lumber; and
the replacements could be
another pile of lumber given
in replacement after the
original pile of lumber was
destroyed.)
Yes. Article 10 of Law No.
42/1999 stipulates that except
otherwise agreed fiduciary
security includes profits from
the collateral. “Profits from
the Collateral” means
anything and everything
obtained from the Collateral
which includes products,
proceeds and replacements of
the original collateral.
Yes
Article 10 of Law No.42/1999 stipulates that
except otherwise agreed fiduciary transfer
security includes profits from the collateral.
"Profits from the collateral" means anything and
everything obtained from the collateral which
includes products, proceeds and replacement of
the original collateral.
No
-Click to Select-
Comments:
Not applicable

2. Debts and Obligations
a. Can present and future
debts and obligations be
secured in Scenario A and
Scenario B?
Yes, for Scenario A, as long
as the debts and obligations
has a monetary value. Not
applicable for Scenario B.
Yes
Present and future debts and obligations can be
secured in scenario A and Scenario B.
b. Can all types of
conditional, monetary and
non-monetary debts and
obligations be secured in
Scenario A and Scenario B?
Only monetary debts and
obligation and only
applicable for Scenario A.
Yes
All types of obligations are able to be secured by
fiduciary transfer security in scenario A and B
under Law No.42/1999
c. By law, can the
obligations be described in
general terms (e.g., “all
obligations between the
parties,” or “obligations of a
debt of up to US$1,000,000
[as in a line of credit]; the
obligations will fluctuate
under that threshold without
requiring a new agreement
every time a new obligation is
created”) in the security
registered? If no, please
indicate what the
description requirements
are.
Yes Yes
Article 13 of Law No.42/1999 only provides that
fiduciary transfer security registration shall
identify agreement that is secured by the
fiduciary transfer security as well as the secured
value. In this regard, the secured obligations can
be described in general terms.
Yes
Correction
Comments:
Last year's answer did not take into account the possibility of fiduciary transfer security to be applied for both
scenario A and B.

3. Collateral Registry
3.1 Please provide the following information on the collateral registry if applicable.
a. Please name the
registry (or registries)
where BizBank’s security
interest would be
registered in Scenario A
and Scenario B.
The Minister of Law and
Human Rights of the
Republic of Indonesia
Same as last year
b. Please provide the
website address and
phone number for the
main collateral registry
for movable property.
The Minister of Law and
Human Rights of the
c.q. The Fiduciary
Registration Office
The Regional Office of The
Department of Law and
Human Rights of the
Jl. MT Haryono No. 24
Jakarta Timur
The regional office can be
found in every capital city
of each province in
Indonesia, according
Presidential Decree No.
139 of 2000 on the
Establishment of Fiducia
Registration Office in
Every Provincial Capital
City within the Territory of
Republic of Indonesia.
Now the registration shall
be done by notary through
an online registration
system.
Same as last year but the registration can be
conducted online by: (a) a notary; (b) bank or
finance company; and (c) retail (including
company, individual, CV, firm, partnership,
etc). The website address for online
registration is at: https://fidusia.ahu.go.id/
3.2 What are the features of the collateral registry?
a. Must BizBank register its
non-possessory security
interest for the security
interest to be valid? Must it
do so for the security
interest to be enforceable
against third parties?
Yes Yes
b. Is the registry in
operation?
Yes,c the online registration
system can be accessed at
Yes

http://fidusia.ahu.go.id/
https://fidusia.ahu.go.id/
c. Is this a notice-based
registry? (That is, no
documents, such as a copy of
the contract, need to be
submitted and the registry
does not verify the legality of
the transactions.)
The notary public needs to
complete the information
about the fiduciary agreement
online but the office doesn't
check what is written in the
agreement. And the actual
notarized fiduciary agreement
is kept with the notary.
Yes
The public notary needs to complete
information about the fiduciary transfer security
agreement online but the registry office doesn’t
check what is written in the agreement and the
actual notarised fiduciary transfer security
agreement is kept with the notary.
d. Who can perform the
registration? (e.g., the
secured creditor, its
representatives)
The notary appointed by the
Debtor and Creditor.
Yes
The registration can be conducted online by: (a)
a notary; (b) bank or finance company; and (c)
retail party (including company, individual, CV,
firm, partnership, etc).
e. When is a new
registration reflected and
retrievable in the database?
Please provide an estimate
(e.g., within 1 hour, 24 hours,
3 business days, etc.).
The notary public can access
it any time after the
registration. The system is
updated real-time.
Yes
The public notary or the interested applicant is
able to access the database any time after the
registration. The system is updated real-time.
f. Does the registry cover all
types of security interests in
movable assets (other than
vehicles, ships, aircraft or
intellectual property)?
No. The registry does not
cover money in bank accounts
which, in practice, are
commonly subject to pledge.
Note, however, that the
effectiveness of a pledge over
bank accounts is still unclear
under Indonesian law, if the
pledgor is permitted to retain
control over the bank
accounts except in an event of
default, as this may be
deemed inconsistent with the
nature of a pledge under
Indonesian law.
Yes
The registry maintains registration of all types of
security interests in movable and contractual
assets
g. Is the collateral registry
limited to security interests
granted by certain types of
borrowers or creditors?
(e.g., incorporated entities,
only individuals, commercial
banks)
No No
the registry is open to registrations from all
types of borrowers or creditors.
h. Can everyone access the
data in the registry without
restriction from any
geographic location in the
economy?
No. The registry is only
accessible to the notary as a
legitimate party to register
the fiduciary security.
Yes
Currently the public is able to access the registry
i. Is the collateral registry
(the database) either
centralized geographically
for the entire economy or
linked among different
geographic regions within
Online database Yes
he collateral registry database is online and
linked different registry offices in Indonesia

the economy?
j. Does the collateral
registry have an online
system for registrations,
amendments, renewals,
cancellations and searches
of security interests?
Yes. Online system is
available for registrations,
amendments, renewals and
cancellations.
Yes
The online system is available for registrations,
amendments, renewals and cancellations.
k. Does the registry have an
electronic database
searchable online by
debtor’s name?
Yes Yes
https://fidusia.ahu.go.id/
Yes
Correction
Comments:
Correction is made on the last year's information to clarify that currently any party can register fiduciary transfer
security to the fiduciary registration office through online system.

4. Priority of Claims Outside of Insolvency or Bankruptcy
Assumption: ABC has defaulted on its loan but has not entered any kind of formal insolvency or bankruptcy
procedure.
a. Does BizBank have
absolute priority over all
other creditor claims that
were never registered or
that were registered
afterward in both Scenarios
A and B before any court
proceedings are initiated?
(In other words, is the
secured creditor with a
pledge paid before any other
possible creditor claim, such
as labor wages or state
taxes?)
No Yes
The last year's answer is not accurate because it
is clear that ABC has not entered in any kind of
formal insolvency or bankruptcy procedure so
BizBank shall have absolute priority over all
other ceditor claims that were never registered
or that were registered afterward in both
scenario A and B.
b. If not, please provide the
priority rankings of
different types of creditor
claims. (Please note that
since the debtor is outside
any insolvency or bankruptcy
procedure, the relevant
articles might be found in
different laws, such as the
labor code or tax law.)
Labor claims and general tax
claims have super-priority
over secured creditors. Art.
28 of the Fiduciary Law, a
preference right is granted to
a creditor whoever registered
the object first, except
priority of debts as stipulated
in Art.1139 and Art.1149 ICC
such as court charges, state
taxes and labor wages.
Yes
Since ABC has not entered into any formal
insolvency or reorganisation proceeding then
the priority rankings of different types of
creditor claims should be: (1) secured creditors
(the ones having fiduciary transfer security in
place); and (2) unsecured creditors (including tax
office and labor wages).
Yes
Correction
Comments:
Correction is made to last year's answer to clarify that ABC has not entered into any formal insolvency and
reorganisation proceedings so BizBank shall have priority right over the other creditors to enforce the security and
apply its proceeds to recover the loan.

5. Priority Rules within Insolvency or Bankruptcy Proceedings
Assumption: ABC is now in a formal insolvency or bankruptcy procedure and creditors have been invited to file
claims.
a. Does BizBank’s secured
claim have absolute priority
over the claims of all other
creditors, including the
state and employees, in both
Scenarios A and B? (In
other words, is the secured
creditor paid before any other
possible creditors with
claims?)
No, Article 1137 Indonesian
Civil Code determines the
priority of state tax debts
which shall be paid first.
Yes
BizBank secured claim shall have priority over
the claims of all other creditors because it has
obtained security over particular assets of ABC.
BizBank shall only wait for a 90-day stay period
under Article 56 of Law No.37 of 2004 on
Bankruptcy and Suspension of Payment before it
is able to enforce the security
b. Do labor claims (e.g.,
wages) have priority over
BizBank’s secured claim
even if they were never
registered or were
registered afterward?
Yes, art. 39 par. 2 of the
Bankruptcy Law 37/2004: As
from the date of the
bankruptcy declaration
becoming effective, the
remunerations of the
employees which become
outstanding before or after
the bankruptcy declaration
becoming effective shall
become a debt of bankruptcy
estate.
No
BizBank as a secured creditor is well protected
under Law No.37 of 2004 on Bankruptcy and
Suspension of Payment meaning that they have
priority right over the other unsecured creditors
including labor claims and they have the right to
enforce the collateral once the 90-day stay
period has ended.
c. Do state claims (e.g.,
taxes) have priority over
BizBank’s secured claim
even if they were never
registered or were
registered afterward?
Yes, based on Art.1137 ICC
and Art.21 Law No 16/2009
on General Conditions and
Procedures for Taxation.
No
BizBank as a secured creditor is well protected
under Law No.37 of 2004 on Bankruptcy and
Suspension of Payment meaning that they have
priority right over the other unsecured creditors
including state's tax claims and they have the
right to enforce the collateral once the 90-day
stay period has ended.
d. Does the law provide for
an actual ranking of claims
during a bankruptcy
procedure (e.g., 1.
bankruptcy costs; 2. labor
claims; 3. tax claims; 4.
secured creditors; 5.
judgment claims)? If yes,
please provide the rankings.
There are no specific law and
regulation governing an
actual ranking of claims
during a bankruptcy
procedures. However,
classification of creditors in
bankruptcy based on Article
1139 to 1149 ICC Law No.
37/2004 on Bankruptcy and
Suspension of Payment Law
No. 16/2009 on General
Conditions and Procedures
for Taxation determine the
following rankings :
1. tax claim and
remuneration of employees
from remunerations of the
employees as from the date of
No
Law No.37 of 2004 on Bankruptcy and
Suspension of Payment does not provide actual
ranking of claims during the bankruptcy
procedure but the law clearly differentiates
between secured creditors who is able to
enforce their security at will (under article 55)
subject to the 90-day stay period under article
56 and the unsecured creditors.

the bankruptcy declaration
becoming effective
2. claims from secured
creditors hold pledge, fiducia,
security right, and mortgage;
3. debts of bankruptcy estate
(i.e bankruptcy cost, curator
cost, labor claims; rent)
4. Claims from the special
preferred creditor (article
1139 ICC) and from the
general preferred creditor
(article 1149 ICC);
5. claims from unsecured
creditors (concurrent
creditors)
Yes
Correction
Comments:
Correction is made on the last year's answer to clarify that BizBank as a secured creditor also has priority right in
bankruptcy and suspension of payment scenario although they are still subject to the 90-day stay period under
Article 56 of Law No.37 of 2004.

6. Secured Creditors’ Exemption from Automatic Stays in Reorganization
a. Is a judicial
reorganization procedure
available, either within a
general insolvency or
bankruptcy procedure or as
a separate process? (Please
do not consider informal
workouts. If there is no
judicial reorganization
procedure available, consider
only a general insolvency or
bankruptcy procedure.)
Yes Yes
b. If there is more than one
available, please indicate
which would be the most
commonly used in your
jurisdiction, taking into
account the assumptions of
our case study.
Suspension of payment of
debts.
No
There is only one reorganisation procedure
called suspension of payment process
c. Are enforcement actions
by secured creditors subject
to an automatic stay (or an
automatic suspension,
moratorium, etc.) in
reorganization (or in
bankruptcy if a
reorganization procedure is
not available)?
Yes. Yes
d. Is there a time limit
prescribed by law on the
automatic stay imposed on
the secured claims in the
(or bankruptcy if
reorganization is not
available)? If yes, what is
the time limit?
Yes. The bankruptcy
proceedings creates a stay of
proceedings for 90 days
before creditors are allowed
to enforce claims and execute
their security rights.
Suspension of payment
proceedings creates a stay of
proceedings for a maximum
of 270 days before creditors
are allowed to enforce claims
and execute their security
rights
Yes
same as last year
e. Does the law stipulate
that secured creditors may
apply for a relief of the stay
when the collateral is not
needed for the
reorganization or sale of the
business as a going
concern?
Yes. Concerning grounds for
application of relief, Article
57 of the Bankruptcy Law
further rules that creditors or
third parties whose rights
have been stayed may file a
petition to the curator for the
lifting of the stay or to amend
the conditions of such stay.
Based on the application,
Supervisory Judge shall take
into consideration: a. the
length of the stay period
Yes
same as last year

which has already elapsed; b.
the protection of the interest
of the creditor and related
third party; c. the possibility
of reconciliation; d. the
impact of such stay on the
survival and management of
the debtor's business and the
settlement of bankruptcy
estate.
f. Does the law stipulate
that secured creditors can
apply for a relief of the stay
in reorganization (or
bankruptcy if
reorganization is not
available) when the stay
poses a great risk to the
existence of the collateral
(e.g., perishable goods)?
Concerning grounds for
application of relief, the
elucidation of the Bankruptcy
Law further rules that the
Supervisory Judge may
consider other reasons to the
extent it is necessary to
safeguard and optimize the
value of the bankruptcy
estate. According to the
Bankruptcy Law the
Supervisor y Judge may lift
the stay period under general
statements which may be
interpreted under the light of
the UNCITRAL Legislative
Guide on insolvency law
Yes
same as last year
No
-Click to Select-
Comments:
Not applicable

7. Enforcement of Security Interests
a. Does the law allow parties
to a security agreement, at
the time a security interest is
created, to agree to enforce
the security interest outside
of court if the debtor
defaults in both Scenario A
and Scenario B? (That is,
upon default, may the secured
party (i) take possession of the
collateral or (ii) sell,
exchange, convert into money
or otherwise enforce against
the collateral privately or by
auction?)
No. Seizure of assets by
creditors must always be
implemented through court
proceedings.
Yes
Enforcement of assets is allowed without the
involvement of courts under Law No.42 of 1999
on Fiduciary Transfer Security
b. Can a sale of the asset take
place through a public or
private auction (or both)? (A
public auction is understood
here as a method of selling
assets in a public forum
through open and competitive
bidding and under the
authority of a court or a
government agency. It
contrasts with a private
auction, in which the buyer’s
and seller’s identities are not
disclosed and the procedure
may not be monitored by a
government agency.)
Sale of an asset can be done
through private auction if it
obtains the highest price and
provide benefit for the
parties.
Yes
A sale of the asset can take place through a
public or private auctions.
c. Is a “pactum
commissorium” possible in
your economy? (That is, may
the secured creditor
automatically appropriate the
encumbered asset upon default
of the debtor?) Is the creditor
allowed to acquire the asset
as a full or partial
repayment of the debt by
agreement?
No No
Currently Indonesian law requires a creditor to
sell the secured assets and prohibited them to
acquire the assets.
Yes
Correction
Comments:
Correction is made to last year's answer to clarify that a creditor is able to enforce the collateral without any
involvement of courts if the debtor is in default of its obligations through public or private auctions or even a
private sale.

EODB INDONESIA 2018 - 2019 - Getting Credit Handbook

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