According to Presidential Regulation No. 13 of 2018 regarding the Implementation of the Principles of Recognizing Beneficial Ownership of Corporations to Prevent and Eradicate the Criminal Acts of Money Laundering and Terrorism Financing (“PR 13/2018”), each corporation is required to determine the Beneficial Ownership (“BO”) of the corporation. A corporation is an organized group of people and/or assets, a legal entity or a non-legal entity, which includes a limited company, foundation, association, cooperative, limited partnership, firm, and other forms of corporations. Furthermore, the beneficiary is an individual, whether an Indonesian citizen or foreigner, who can appoint or dismiss directors, commissioners, administrators or supervisors in the corporation, has the ability to control the corporation, is entitled to and/or receives benefits from the corporation whether directly or indirectly, is the owner of the funds or shares of the corporation and/or meets the criteria as referred to in the PR 13/2018 and the applicable regulation in Indonesia.
The detailed requirements of BO criteria for a limited company as governed in Article 4(1) PR 13/2018, are:
- owns more than 25% of shares in a limited liability company as stated in its articles of association;
- owns voting rights of more than 25% in limited liability companies as stated in its articles of association;
- receive a profit of more than 25% of the annual profits earned by the limited liability company;
- possess the authority to appoint, replace, or dismiss members of the board of directors and members of the board of commissioners;
- possess the authority or power to influence or control a limited liability company without having to obtain authorization from any party;
- receive benefits from a limited liability company; and/or
- is the actual owner of the funds for the ownership of limited liability company shares.
Aside from determining its BO as stated in Article 3 PR 13/2018, a corporation is also obligated to:
- Appoint its employee(s) to implement the principles of recognizing its BO and to provide relevant information regarding the BO to the authorized institution (Article 14).
- Provide the authorized institution with the accurate information about the BO accompanied by a statement letter by the corporation indicating that the information is correct (Article 18).
- Update the information regarding the BO on an annual basis (Article 21).
- Administer documents related to the BO within a minimum period of five years from the corporation's date of establishment (Article 22).
By failing to fulfill these obligations, a corporation is subject to sanctions under the provisions of the laws and regulations, as governed by Article 24 PR 13/2018. As for now, the only apparent penalty is, according to the Directorate General of Public Legal Administration (Direktorat Jenderal Administrasi Hukum Umum/Ditjen AHU), a corporation that has not provided its BO data is subject to temporary access blockage to the Legal Entity Administration System (Sistem Administrasi Badan Hukum) until the corporation fills in its BO data through the website https://bo.ahu.go.id/site/login.
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Author: Dewi Susanti