Dear Valued Clients and Colleagues,

Budidjaja International Lawyer (BIL) would like to congratulate our Managing Partner Mr Tony Budidjaja for his recent admission as Panel of Arbitrators Member by Singapore Chamber for Maritime Arbitration (SCMA).

We are pleased to learn that Mr Budidjaja is currently the first Indonesian arbitrator on the panel.

Dear Valued Clients and Colleagues,

In the wake of the recent natural disasters affecting the city of Palu and Donggala in Central Sulawesi, Budidjaja International Lawyers (BIL) would like to inform that as a form of our deepest sympathy and support to the disaster victims, the firm has presented a donation to the Habitat for Humanity Indonesia.

Habitat for Humanity Indonesia is a part of Habitat for Humanity International, a non-profit organization focusing on providing decent housing for underprivileged people.
BIL has been actively contributing and raising donations from the members to be distributed through a number of charity organizations involved in the disaster relief.

During our visit to Habitat for Humanity Indonesia office, our members were welcomed by Mr James Leslie Tumbuan, Chairman of Habitat for Humanity Indonesia; and Mr Tommy Pacatang, the organizations Resource Development Director.

Donations received by the organization will be channeled to constructing shelters and housing for the disaster victims in Palu and Donggala.

We hope you would join us to extend all the support and prayers both for the victims of natural disasters Indonesia and all the institutions involved in the post-disaster relief and restoration efforts.

Kind regards,
Budidjaja International Lawyers

Author: Reynalda Basya Ilyas, Randy Hendrika, Fransiskus Xaverius, I Ketut Dharma Putra Yoga

The Government of Indonesia has been consistently trying to optimize foreign exchange from exports and maintain the stability of pricing for natural resources in international markets. As part of this effort, the Indonesian government through the Ministry of Trade (“MoT”) aims to simplify the usage of Letter of Credit (“L/C”) in exporting certain goods through the issuance of MoT Regulation number 94 of 2018 regarding the Provision on the Implementation of L/C in Exporting Certain Goods, as lastly amended by MoT Regulation number 102 of 2018 regarding the amendment of MTR 94/2018 (collectively “MT Regulations”). The MT Regulations came into effect on 7 October 2018.

As a result, a number of previous regulations on the implementation of letter of credit for exporting certain goods will become ineffective, namely (i) MoT Regulation number 67/M-DAG/PER/8/2015 on the Provision of the implementation of L/C for Export Certain Goods and its amendments in MoT Regulation number 04/M-DAG/PER/1/2015; (ii) MoT Regulation number 26/M-DAG/PER/3/2015 regarding the Specific Provisions on the Implementation of L/C to Export Certain Goods.

Terms of Payment

MT Regulations provide that the payment by way of L/C must be made through foreign exchange banks in Indonesia. Other than through a foreign exchange bank, the method of L/C payment may alternatively be received through an export financing institution established by the government by referring to the provision of the Bank Indonesia Regulation regarding Export Foreign Exchange (such as the PT Lembaga Pembiyaan Ekspor Indonesia and PT Indonesian Eximbank). In contrast to the previous regulation, the L/C Regulation also provides that, in absence of price determined by an international market, the price of certain goods in the L/C should also refer to the prices provided by the government.

Types of Certain Goods

From the previous regulation, MTR Regulations reduce the list of certain goods of mineral that are required to use L/C as their payment method in export.

Presently, there are only thirteen (13) types of minerals, seven (7) types of coal and two (2) types of palm oil that are required to use L/C as their export method payment, as follows:

In addition, the provision contained in MT Regulations also introduces several exemptions for the use of L/C as a payment method, for certain goods that are in the form of/used for (i) samples that are not to be traded; (ii) scientific research and development; and (iii) as promotion for exhibition purposes abroad.

An exporter may apply and obtain exemption from the mandatory use of L/C provided that the following cumulative requirements are met:

1. If an agreement, which stipulates payment methods other than the use of L/C, has been entered by and between the Exporter and overseas Purchaser prior to the enactment of MT Regulations; and
2. The ability of the Exporter to adjust the method of payment to the use of L/C within a certain period of time.

The above exemptions shall obtain approval from the Director of Export and Import Facility of MoT.

Implication for Exporters

Under MTR Regulations, the exporters are required to:

1. Provide the L/C payment method in the Export Declaration (Pemberitahuan Ekspor Barang/PEB);
2. Submit a statement letter to the surveyor in accordance with the given format, equipped with a stamp duty; and
3. Submit monthly report on the realization of export of certain goods no later than the 15^th (fifteenth) of every month to the Director General of Foreign Trade Affairs, via online through https://inatrade.kemendag.go.id. 

In the event exporters fail to meet the above requirements, they may be subject to a written warning, temporarily not allowed to export the goods until the completion of the requirement; or in some cases, the export license and/or business license may be revoked.

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Dear Valued Clients and Colleagues,

In the wake of the recent natural disasters affecting the city of Palu and Donggala in Central Sulawesi,
Budidjaja International Lawyers (BIL) would like to extend the deepest sympathy and prayers to all of the victims of disasters and their families.

BIL has been actively contributing and raising donations from the members to be distributed through a number of charity organizations involved in the disaster relief.  As a part of our Community Development initiatives and to further support the relief efforts for the disaster victims, our firm took part in the “Gitaris Indonesia Peduli Negeri: Musik dan Syair Solidaritas” (“Indonesian Guitarist Care for the Nation: Music and Poems of Solidarity”), a charity concert organized by Kompas Gramedia Group at the Bentara Budaya on Thursday, October 11, 2018.

About 50 prominent Indonesian guitar virtuosos, such as Ian Antono, Eross ‘Sheila on 7’, Ridho ‘Slank’, Dewa Budjana, Tohpati, Baron, and Coki ‘NTRL’, supported the event through their music performance.
The event also joined by some of Indonesian famous poets, namely Sapardi Djoko Damono, Joko Pinurbo, Inayah Wahid, Saras Dewi, and Maryam Supraba.

Some of BIL members attended the event to support the cause. During the occasion, Ms Diah Kurniati, the Office Manager of Budidjaja International Lawyers also presented a donation on behalf of the firm to the Dana Kemanusiaan Kompas (“Kompas Humanitarian Fund”). Through the collaborative efforts of people from different walks of life, the charity event has managed to raise a total of IDR 3 Billion (approximately USD 300,000).Budidjaja International Lawyers will continue to make its best efforts to help the communities in Indonesia, especially those in dire need of support and assistance. We hope you would join us to extend all the support and prayers both for the victims of natural disasters Indonesia and all the institutions involved in the post-disaster relief and restoration efforts.

Kind regards,

Author: Selvana Stella Oviona, Fahdli Ramadhan Suriyana

As a follow up to the accession of the Protocol relating to the Madrid Agreement Concerning the International Registration of Marks (“Madrid Protocol”) on 2 October 2017, the Indonesian Government issued Government Regulation No. 22 of 2018 on International Registration of Mark under Madrid Protocol (“GR 22/2018”), which came into effect on 6 June 2018. GR 22/2018 was also issued as the implementing regulation of Article 52 paragraph (4) of Law No. 20 of 2016 on Trademark and Geographical Indications, which serves as a basis to implement the international mark registration system under the Madrid Protocol (“Madrid System”) in Indonesia.

The accession to the Madrid Protocol by the Indonesian Government primarily aims to protect local marks originating from Indonesia in international markets. Implementation of Madrid System by Indonesia also provides benefits for foreign mark holders, when registering/protecting their marks in Indonesia as one of their designated countries.

We set out below the basic requirements and procedures to file an international application for the registration of marks through the Madrid System (“International Application”) in Indonesia.

What are the Basic Requirements?

Pursuant to Article 2 of the Madrid Protocol, in order to be entitled to file an International Application, the applicant shall have a connection with one of the contracting parties of the Madrid Protocol, which is determined by (a) nationality of a contracting party; (b) domicile in a contracting party; or (c) a real and effective industrial and commercial establishment in a contracting party.

After ascertaining that the applicant has a connection with a contracting party, the applicant is also required to already have a “basic mark” in the location of the contracting party before filing an International Application. A “basic mark” refers to the applicant’s mark, which has been filed for registration or has been registered locally with the Intellectual Property Office (“IP Office”) of the contracting party, where the application originated from (IP Office of origin). Therefore, if Indonesian mark holders intend to file an International Application, they need to have already filed for registration (basic application) or have completed registration (basic registration) in the Directorate General of Intellectual Property at the Ministry of Law and Human Rights (“Indonesian IP Office”), as required by Article 5 of GR 22/2018.

What is the Filing Process?

Application to IP Office of Origin

Pursuant to Article 2 of the Madrid Protocol, an International Application shall be filed to the International Bureau of the World Intellectual Property Organization (“WIPO”) through the applicant’s IP Office of origin using Form MM2. The IP Office of origin will then examine whether the International Application corresponds with its basic mark. If cleared, the IP Office of origin will certify and forward it to WIPO.

In Indonesia, under GR 22/2018 an International Application shall be addressed to the Indonesian IP Office, which will examine (a) the completeness and correctness of information contained in the form; (b) conformity between the International Application and its basic mark; and (c) proof of qntlistration fee payment. It is worth noting that the relevant fees for every application filed through the Madrid System is calculated based on the Swiss Franc (CHF) currency.

If it conforms to the above requirements, the Indonesian IP Office will certify the application and forward it to WIPO.

Examination by WIPO

In this phase, WIPO will only examine the formal requirements of the International Application, e.g. the designated country of registration, the names of goods and services in relation to the locations of the international registration of mark classified according to Nice Classification and payment of fees. If the formal requirements are effectively met, the mark will be recorded in the International Register managed by WIPO and published in the WIPO Gazette of International Mark. WIPO will then send a Certificate of International Registration to the mark holder to acknowledge that such formal requirements have been complied. Afterwards, WIPO will notify the IP Office in the countries where the mark holder intends to protect its mark.

Examination by Designated IP Office

The IP Office of the designated country will then conduct substantive examination as to whether protection over the mark can be granted, in accordance with its domestic applicable law approximately within 12 months (under the Madrid Protocol a contracting party may declare this period to be extended to 18 months). In Indonesia, under GR 22/2018, the substantive examination over the International Application shall be conducted at the latest 18 months from the notification of registration date. IIf there is no response from the IP Office within 12 months or 18 months (maximum from the date of filing), such application shall become automatically registered.

Pursuant to the Madrid Protocol, if granted, the designated IP Office will issue a statement of grant for protection with validity for 10 years as of the date of filing and the possibility of renewal for another 10 years.

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Dear Valued Clients and Colleagues,

We are pleased to announce that Budidjaja International Lawyers has been nominated for the Asian Legal Business Indonesia Law Awards 2018. Budidjaja has been nominated in several categories along with other top Indonesian firms. The categories the firm is listed in are as follows:

Firms Categories:
– Labour and Employment Law Firm of the Year
– Maritime Law Firm of the Year
– Dispute Resolution Boutique Law Firm of the Year
– Projects, Energy, and Infrastructure Law Firm of the Year
– Restructuring and Insolvency Law Firm of the Year
– Intellectual Property Law Firm of the Year

Author: Narada Kumara, Michelle Yosefanny

In July 2018, the Chief Justice of Supreme Court of the Republic of Indonesia formally launched an electronic-based case qntlistration for court applications (“E-Court”). This progressive action is part of the implementation of Supreme Court Regulation No. 3 of 2018 on Electronic Based Case Administration in Court (“SCR 3/2018”), which came into effect on 4 April 2018.

We are optimistic that the launching of E-Court will bring game-changing benefits as to how Indonesian courts deal with case qntlistration/management. In the legal sector, it is widely known that Indonesian courts are quite conventional in terms of case management procedures where physical attendance and/or physical submissions of court documents are essential, which of course can be time consuming and costly. The E-Court is designed to streamline the filing, management and delivery of court documents, such as the statement of claim, reply, counter plea, rejoinder and conclusion, via electronic methods. As a result, the court will be able to facilitate simple, fast and low-cost proceedings.

In principle, the E-Court application can be used by the advocate and/or individual registered in the system. Currently, only advocates can access and register the E-Court application. Meanwhile, the usage of E-Court application by individuals is subject to further regulation by the Decree of the Chief Justice of the Supreme Court, which, to date, has not been issued yet.

Following the launch of the E-Court application, the mechanisms to submit a lawsuit through the E-Court system are as follows:

1. User Account Registration

Registration is facilitated through the official website: http://ecourt.mahkamahagung.go.id. After completing all the required information, the user account shall be verified and activated using the applicant’s email.

2. Data Validation

After submitting the relevant information, specifically for advocates such information will be validated by the High Court in the location where the advocate resides. Advocates will be permitted to file a lawsuit/claim to all district courts within the territory of Republic of Indonesia after the data is verified.

3. Online Lawsuit Submission

In registering the case, the advocate will be allowed to submit case documents and other supporting data through the E-Court application. Payments related to the application are made afterwards, through the virtual account. As of 13 July 2018, the payment can be completed through several state-owned banks. During this step, the case registration number will be provided in the E-Court application as well.

4. Consent for Proceedings using E-Court

To enable the submission of court documents through the E-Court system, the legal attorney must first obtain written approval from its principal/client to do so. Further, in case of proceedings using E-Court, the first court summon will be delivered to the Plaintiff through the online system, while the court summons for the defendant(s) will be served manually to their addresses first. During the first proceeding, the defendant will be asked by the Panel of Judges of the case whether the defendant would prefer to use an online or offline system for the court summons, submissions of reply, counter plea and the exchange of other supporting files. If the defendant foregoes the use of the E-Court system, the proceedings will be conducted conventionally.

To date, the submission of online lawsuit through an E-Court application is only available in certain areas. The Supreme Court has decided that the pilot project for the E-Court system shall be implemented by 32 courts in Indonesia (mostly in Java and Sumatera islands), consisting of district courts, religious courts and state qntlistrative courts. The Supreme Court has set a one-year timeline for the E-Court system to be fully implemented by all courts in Indonesia.

It is hoped that implementation of the E-Court application can help all relevant parties have access to simple, fast and low-cost proceedings. Focusing on the benefits of the system, it is expected that expenses will be minimized and the process will be more efficient in terms of time, fees and effort, compared to conventional or traditional court filing methods.

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Author: Budidjaja International Lawyers Shipping Team
In May 2018, the Ministry of Transportation issued Regulation No. 38 of 2018 (“MR 38/2018”) regarding Salvage and/or Underwater Works which amended the previous regulation provided in Ministry Regulation No. 71 of 2013 (“MR 71/2013”) and Ministry Regulation No. 33 of 2016 (“MR 33/2016”).

Below are salient points on the amendment of the regulation regarding Salvage and/or Underwater Works, as regulated under MR 38/2018:

A. Licenses to Conduct Salvage Activity

MR 38/2018 provides a new requirement for a salvor/underwater works company to hold a Business Permit (Izin Usaha) from the Chairman of Indonesian Investment Coordinating Board (“BKPM”) prior to carrying out any salvage activity.

In order to conduct salvage activity in a casualty situation wherein the vessel and/or her cargo are in a sunken state or condition, the salvor must obtain:

1. a Business Permit from the BKPM; and
2. a permit from the Directorate General of Sea and Communication
(“Seacom”) to conduct the particular salvage activity (“Salvage
Permit”).

If the casualty vessel is to be salvaged by way of scrapping method, the following documents are required to be submitted for obtaining a Salvage Permit.

1. deletion certificate of the casualty vessel; and
2. contract with the company storing the scrapped vessel.

[Article 6 paragraph (4) of MR 38/2018]

B. Salvage Activity conducted by Indonesian Shipowners

Pursuant to MR 38/2018, Indonesian shipowners may carry out salvage activity towards their own vessel in case their vessel is grounded and assistance from the salvor company to handle such salvage activity is not required.

If the salvage activity is not carried out by the shipowners of the casualty vessel, a power of attorney from the shipowner shall be required when submitting the application of Salvage Permit.

C. Obligation for the Shipowners to Coordinate with Harbor Master 

MR 38/2018 obliges the shipowners to coordinate with the nearest Harbor Master to supervise the unrecovered/lifted shipwreck and/or its cargo. Any costs related to such obligations shall be borne by the wreck and/or cargo owners.

D. Findings and Possession of Unknown Shipwreck

• Announcement and Coordination Meeting

Previously, under MR 71/2013, the nearest Harbor Master is obliged to
make a series of  announcements (3 times) within 30 calendar days from
the finding of the shipwreck and/or its cargo with unknown ownership or
based on the date of the acceptance of report from the community; and
afterward to remove the shipwreck if no one claims its ownership.

Under MR 38/2018, the obligation to make announcements and to remove
the unknown wrecks is imposed on the Seacom.

In this case, the Seacom should also serve a written notification and
attend coordination meetings with the Coordination Ministry of Maritime
Affairs, Ministry of Education and Culture, Ministry of Marine Affairs and
Fisheries, Ministry of Defense, Ministry of Environment and Forestry, and
the Hydrography and Oceanography Center of Indonesian Navy.

• Appointment of a Salvor and/or Underwater Works Company

In case the foregoing coordination meeting fails to determine the status of
the shipwreck and/or its cargo, the Coordinating Ministry of Maritime
Affairs will provide a recommendation to the Ministry of Transportation to
authorize/appoint a salvor and/or underwater works company
(“Company”) to carry out the salvage.

Under MR 38/2018, the salvor’s operational costs for recovering the
shipwreck and/or its cargo will be calculated from the (auction) result of
the salvaged shipwreck and/or its cargo, deducted with the payment of
Non-Tax State Revenue pursuant to Government Regulation No. 15 of
2016 regarding Type and Tariff of Non-Tax State Revenue at Ministry of
Transportation for supervision of salvage upon shipwreck by a third party
in the sum of IDR 50,000 per tonnage (of the shipwreck).

Conclusion

Upon reviewing MR 38/2018, we noted that the major amendment to MR 71/2013 and MR 33/2016 is related with salvage activity towards the unknown wrecks.

Based on our consultation with the Seacom, MR 38/2018 aims to increase coordination between relevant ministries and institutions to protect and manage the unknown wrecks including to avoid the misuse of the Salvage Permit, e.g. the permit is being used for salvage activity towards shipwreck and/or its cargo that are classified or considered as cultural heritage as well as to prevent the preserved (ancient) shipwreck and/or its cargo from becoming a threat to the safety of marine transportation activities.

Following the issuance of MR 38/2018, the salvor company who is appointed by the Seacom to conduct salvage towards the unknown wrecks must meticulously calculate the value of the unknown wrecks vis a vis their operational cost.

Dear Valued Clients and Colleagues,

Budidjaja International Lawyers is proud to announce that our Managing Partner Mr Tony Budidjaja, has been admitted as a Fellow of the Asian Institute of Alternative Dispute Resolution (AIADR).

Within the AIADR ranks, Fellow is the highest regular class of individual membership that the Institution awards to its members.

As someone who has been among the first to join as a Fellow, Mr Budidjaja is now part of a number of experts in the field of arbitration, hand-picked to be the Fellow ambassadors of the AIADR, which serves an important role in further expanding the Institution.

We believed that this professional achievements is a proof that Budidjaja International Lawyers will always strive for the best in providing high-quality, tailored legal solutions to our clients.

Once again, congratulations for Mr Tony Budidjaja for this prestigious achievement.

Best Regards,

Budidjaja International Lawyers

Dear Valued Clients and Colleagues,

Budidjaja International Lawyers is proud to announce that the firm will be holding a Client Seminar on “The Future of Institutional Arbitration“ with Mr Ilia Putilin from the Asian International Arbitration Centre (AIAC).

The event will be held on 2 August 2018 at Sahid Sudirman Center, Floor 49, Jalan Jenderal Sudirman No. 86, Jakarta.

Author: Selvana Stella Oviona, Fahdli Ramadhan Suriyana

The Ministry of Law and Human Rights (“MOLHR”) has finally issued MOLHR Regulation No. 15 of 2018 on Implementation of Patent by Patent Holders (“MOLHR 15/2018”), which came into effect on 11 July 2018. MOLHR 15/2018 was issued as the implementing regulation of Article 20 of Law No. 13 of 2016 on Patent (“Patent Law”). The regulation requires patent holders to implement the patent, i.e. to either manufacture their patented products or utilize their patented processes in Indonesia in order to support the transfer of technology, investment, and/or job opportunities in Indonesia.

Article 20 of Patent Law remains applicable despite controversy surrounding the provision, especially due to the provision deemed to be burdensome to non-Indonesian patent holders.

There are at least two grounds of objection for this provision. First, the establishment of factory will be economically inefficient because not every patent is capable of being manufactured in Indonesia. Second, the requirement to manufacture the products or utilize the processes in Indonesia arguably contradicts with the non-discrimination principle, as upheld in Article 27 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) which stipulates that patents shall be available and patent rights enjoyable without discrimination over the place of invention, the field of technology and origination of products (local or imported).

As a matter of fact, the provision of Article 20 of Patent Law is not new and was stipulated in the previously replaced Law No. 14 of 2001 on Patent (“Old Patent Law”). The controversy focuses on the removal of ‘exception’ provided by the Old Patent Law, which provides leniency for patents wherein conducting product manufacturing or process utilization is only feasible regionally by filing a request, accompanied with evidences and obtaining prior approval from the Directorate General of Intellectual Property.

In response to the objection, MOLHR argues that the provision of Article 20 of Patent Law is still in accordance with TRIPS by relying on Article 7 of TRIPS, which in essence stipulates that protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology.

MOLHR 15/2018 was enacted in order to provide a reasonable timeframe for patent holders to comply with Article 20 of Patent Law, in which MOLHR allows patent holders to postpone their obligation to either manufacture their patented products or utilize their patented processes in Indonesia.

Pursuant to MOLHR 15/2018, patent holders may file a request to MOLHR to postpone the obligation to manufacture their products or use their processes in Indonesia. If approved by MOLHR, postponement may be granted for a maximum of 5 (five) years with possibility of extension. Based on information we gathered from relevant MOLHR officials, during the postponement period patent holders will still be able to benefit from their exclusive rights, while preparing to comply with Article 20 of Patent Law, among others, by establishing a factory in Indonesia.

However, MOLHR 15/2018 does not provide the requirements and procedures for filing such postponement request in detail. After the request has been reviewed, MOLHR will notify (in writing) the patent holders whether or not the postponement request is granted.

Lastly, it is also worth noting that based on MOLHR 15/2018, the application for postponement must be filed at the latest 3 (three) years from the date the patent was granted.

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