REGULATION OF THE MINISTER OF FINANCE
No. 88/PMK.06/2009

"Article 1

In this Regulation of the Minister of Finance:

1. State Receivables is an amount of money that must be paid to the State or agencies that either directly or indirectly are controlled by the State based on regulation, agreement or whatsoever.

2. Directorate General is the Directorate General of State Assets.

3. Director General is the Director General of State Assets.

4. Committee is the committee in charge of State Receivables, both at Central and Branch levels.

5. Head Office is the Head Office of the Directorate General.

6. Regional Office is the Regional Office of the Directorate General.

7. Service Office is the Service Office of State Assets and Bid of the Directorate General.

8. Channeling is a fund distribution system from government to public through bank or non bank financing institution where government will take risk if it is not paid.

9. Risk sharing is fund distribution system from government to public through bank or non bank financing institution where government or non bank financing institution share risk if it is not paid.

10. State Receivables Transferor is the Government Agencies, State Institutions or business entities where-in its capital in part or in whole are possessed by the State or by State Owned Business Entities, hereinafter abbreviated as BUMN, or Region Owned Business Entities, hereinafter BUMD, in accordance with provisions of applicable legislations, that transfer the handling of State Receivables.

11. Debtor is the indebted body or person pursuant to a regulation, agreement, or whatsoever including the institution or person guarantying the settlement of all debts of the Debtor.

12. Debt Guarantor is the body or person guarantying the settlement of a part of or all of the debts of the Debtor.

13. Receipt Letter on the Handling of State Receivables, hereinafter SP3N is a letter issued by the Committee containing a statement as having received the transferring of the Handling of State Receivables from the State Receivable Transferor.

14. Joint Statement is an agreement between a Branch Committee and a Debtor on the amount of debt obliged to be settled, methods of settlement, and sanctions.

15. Decision Letter on Stipulation of State Receivables Amount is a decision letter issued by the Committee on the amount of debt obliged to be settled by the Debtor.

16. Prevention is a prohibition to travel outside of the territory of the Republic of Indonesia.

17. Warrant is an order letter issued by the Branch Committee to a Debtor to pay all of its debts all at once within a period of 1 x 24 (one times twenty four) hours accounted for from the date of notification.

18. Sequester is a Government Civil Servant within the Directorate General assigned the duty, authority, and responsibility on Sequestration.

19. Guaranty Goods are assets of a Debtor and/or Debt Insurer delivered as guaranty for the settlement of debts.

20. Other Asses assets of a Debtor not bound as debt guarantee, however based on applicable provisions of legislations constitute a guarantee for debt settlement.

21. internal Assessor is a Government Civil Servant within the Directorate General, appointed by or on the authority of the Finance Minister, assigned the duty, authority, and responsibility to perform assessments

22. Market Value is an estimate of the amount of money on the valuation date, which may be acquired from sale-purchase transactions or yield of a property exchange between a buyer interested to buy and a seller who wanted to sell, in a non-binding transaction where the offering was made reasonably in adequate time, where-in both parties understood the use of the property, acted carefully and without any pressure.

23. Liquidation Value is the value of a property sold in a bid after taking into account the risk of selling it.

24. Limit Value is the lowest value on the release of goods in a bid.

25. Encumbrance Value is the value stated in a mortgage / surety right I fiduciary.

26. Bid is sale in front of the public based on applicable provisions of legislations.

27. Sale without bid is the sale of goods by the Debtor thru an approval of the Branch Committee.

26. Redemption is the payment made by a Debtor to get back Guaranty Goods.

27. Inspection is a series of efforts carried out by an Inspector to get information and/or evidences in the context of State Receivables settlement.

28. Inspector is a Government Civil Servant commissioned by or on the authority of the Finance Minister, assigned the duty, authority, and responsibility to perform inspections.

31. Physical in Duress is a the taking as hostage (gijzeling) as intended in Law No. 49 Prp of 1960, i.e. restraining temporarily the freedom of a Debtor or other parties that based on applicable provisions of legislations is held be responsible.

30. Physical in Duress Place is a certain closed place, having limited facilities, and having an adequate security and control system, used for the performance of Physical in Duress."

"Article 3

(1) In the event the settlement of State Receivables was not successful, the Government Agency as intended in Article 2 is obliged to transfer the handling of State Receivables to a Branch Committee.

(2) Government Agencies as intended in paragraph (1) among others are Central Government Agencies, Regional Government Agencies, State Institutions, Secretariat General of Commissions/State High Institutions, State Owned Business Entities, and Public Service Bodies.

(3) Banking and non banking sector BUMD/BUMD or business entities that major capital is owned by BUMN/BUMD shall delegate processing of unpaid receivables to the Branch Committee in case source of shares by channeling or risk sharing system."

"Article 3A

Non banking sector BUMN/BUMD can delegate processing of unpaid receivables to the Branch Committee."

"Article 24

The Branch Committee will reject the transfer of the handling of State Receivables by issuing a Rejection Letter on the handling of State Receivables in the event:

• a. completeness of the requirements on the transfer of the handling of State Receivables as intended in Article 4 and Article 5 cannot be fulfilled by the State Receivables Transferor, hence cannot prove the existence and amount of State Receivables;
• b. the State Receivables Transferor within one (1) month from the date of the request letter for confirmation as intended in Article 18 paragraph (2), did not give any response; or
• c. the State Receivables Transferor is not from the Government Agency as intended in Article 3 paragraph (1) and paragraph (2) and not from business entities as intended in Article 3 paragraph (3) and Article 3A."

"Article 26

(1) Correction on the amount of State Receivables shall only be made in the event of:

• a. there are unrecorded payments; and/or
• b. calculation errors by the State Receivable Transferor;
• c. other valid reasons.

(2) Correction on the amount of State Receivables shall not be made on the calculation of interest encumbrance, fine and/or other fee/encumbrances exceeding the provisions as intended in Article 15 paragraph (2)."

"Article 102

(1) The Debtors as intended in Article 101 paragraph (1) a are:

• a. persons in a position as debtors in debt bindings or any person who based on applicable provisions of legislations or due to any reason whatsoever are indebted to the State;
• b. Legal entities, represented by:
• 1. board of directors/management of company/cooperative; and/or
• 2. members of board of commissioners/supervisory board of company/　cooperative; or
• c. one of the shareholders or managing shareholder of a business entity if the Debtor is in the form of a partnership firm, commanditaire vennootschap, or civil partnership.

(2) the Debt Insurer as intended in Article 101 paragraph (1) a are:

• a. Guarantor of personal debts (personal guarantee);
• b. Guarantor for the payment of notes payable (avalist); or
• c. management of business entities or legal entities binding itself as guarantor (corporate guarantee).

(3) the shareholders as intended in Article 101 paragraph (1) a are the shareholders who in accordance with provisions of Law concerning Limited Liability Company may be demanded on its personal responsibility."

"Article 106

(1) Investigations shall be performed by Investigators from the Service Office.

(1a) In case Service Office does not have Investigator, Head of Service Office appoint capable Officials to perform Investigation.

(2) Investigations shall be performed by a team consisting of at least two (2) persons."

"Article 120

Protection Objects are:

a. Debtors, they are:

• 1. person who is in position as debtor in lease arrangement, or person based on law or any reason has payable to the state;
• 2. management of legal entity, include foundation according to legal entity notary deed, are represented by:
• 1) board of directors or management of company/foundation/cooperative; and/or
• 2) members of board of commissioners/supervisory board
• 3. one of the shareholders or managing shareholder of a business entity if the Debtor is in the form of a partnership firm, commanditaire vennootschap, or civil partnership.

b. The Debt Insurer, consists of:

• 1. Guarantor of personal debts (personal guarantee);
• 2. Guarantor for the payment of notes payable (avalist); or
• 3. management of business entities or legal entities binding itself as guarantor (corporate guarantee).

c. share holder, in case:

• 1. directly or indirectly use company for private interest;
• 2. involve in the legal violation action in the company; or
• 3. thru law violations, were using assets of the entity causing the entity)s assets to be insufficient to pay back the entity’s debts; and/or

d. heirs who had received inheritance from the Debtor."

"Article 122

(1) Prevention only after issuance of SP3N.

(2) Prevention is conducted by attention to effectively and efficient."

"Article 132

Revocation of Prevention or Prevention period cannot be extended in case:

a. there is a legal change in the company management according to the effective regulations;

b. Prevention object show any good faith by:

• 1. make installment for the settlement; and
• 2. propose clear plan to settle its debt."

"Article 157

In case the Debtor or Debt Insurer is declared bankrupt, State Receivable is processed according to provision in Law on Bankruptcy."

"Article 187

(1) Physical Confinement Order Letter can be issued in the event:

• a. The Debtor did not fulfill the Warrant;
• b. Debt remainder of Debtor is at least Rp 1,000,000,000.00 (one billion Rupiah);
• c. Guarantee goods are not available or insufficient to cover the debt remainder;
• d. Debtor has the ability to settle his debt but did not show any good faith to settle it; and
• e. The Physically Confined Object is not yet 80 (eighty) years old.

(2) In the event information on the provisions as intended in paragraph (1) d and/or e is not available or insufficient, an Investigation may be performed."

"Article 198

(1) Physical Confinement shall be conducted after 14 (fourteen) days after notification of Physical Confinement Order Letter in the event:

• a. Debtor not pay its debt, and
• b. the Physical Confined Object is not yet 80 (eighty) years old.

(2) Excepted from provision as intended in paragraph (1), Physical Confinement can be done before 14 (fourteen) days period and 24 (twenty four) hours after notification of Physical Confinement Order Letter, in case there is written approval from Chief Public Prosecutor with the reason for public interest."

"Article 206

(1) Expenses for the execution of Physical Confinement including living costs of the Physically Confined Object in the Physical Confinement Place shall be stipulated by Regulation of the Minister of Finance.

(2) The expenses as intended in paragraph (1) shall be borne by List of Budget Implementation (DIPA) of the Directorate General, and add sum of payable of Debtor.

(3) Adding of payable as intended in paragraph (2) is Non Tax State Revenue (PNBP) that should be paid to State Treasury according to the regulations and not subject to Administration Cost of State Receivables Processing."

"Article 208

(1) A Physically Confined Object undergoing Physical Confinement may be permitted to leave the Physical Confinement Place in the event the Physically Confined Object wants to:

• a. perform religious services at a religious place;
• b.. attend a proceeding in court;
• c. to participate in a general election at a general election place;
• d. undergo medical checks or medical treatment at a hospital;
• e. attend the burial of parents/spouse and/or children; or
• f. will marry child.

(2) The permit as intended in paragraph (1) shall be granted on the application of the Physically Confined Object."

"Article 211

Term for the exit permit from the Physical Confinement Place is stipulated as of 2 x 24 (twenty four) hours, except for permit for staying medical treatment."

"Article 221

(1) A Physically Confined Object should be released in the event:

• a. State Receivables is declared settled;
• b. The handling of the State Receivables is withdrawn by or returned to the Debt Transferor;
• c. The Physically Confined Object reached the age of 80 (eighty) years old;
• d. The Physically Confined Object suffers heavy mental disturbances, hence will not be fit to commit any legal action; or
• e. The Physical Confinement term expires.

(2) The Physically Confined Object may be released in the event:

• a. there had been a payment of at least 50% (fifty percent) of the debt remainder; or
• b. there is a proposal in writing from the Chief Public Prosecutor for public sake.

(3) In case Debtor not settle rest of payment as intended in paragraph (2) a in decided period, Physically Confined Object shall be restrained for the rest of Physical in Duress period."

"Article 241

(1) Limit Value for the second and following Bids is stipulated:

• a. the lowest shall be as intended in Article 240 and the highest bid shall be the value in the performance of the previous bid;
• b. In accordance with provisions as intended in Article 240, in the event in the previous bid there was no bidding.

(2) The highest bid value in the previous bid shall not be used as basis for the stipulation of Limit Value in the event the bidding is made by a bid winner in default."

"Article 259

(1) Approval to sell not thru a bid is stipulated by the Branch Committee on condition:

• a. It must refer to a valid Assessment Report; and
• b. value of approval must be at least the same as the Market Value;

(2) Approval to sell not thru a bid of shares/obligations sold-purchased in the stock market may be performed without having to be guided by the Assessment Report as intended in paragraph (1) a.

(3) Further provisions on the approval to sell shares! obligations not thru a bid shall be regulated with a Regulation of the Director General.

(4) Excepted from provision in Article 229 and Article 159 paragraph (1), approval to sell not thru a bid with value until Rp50,000,000 (fifty million rupiah) without Valuation first; in case:

• a. Debt Transferor agree, not in objection, or give decision to sell to Branch Committee/Service Office; and
• b. approval value is not less than Tax Object Selling Price (NJOP)."

"Article 272

(1) Exempted from the provisions as intended in Article 271, a Redemption application with a value below the Mortgage/Fiduciary Encumbrance Value may be approved on condition:

• a. Market Value of the goods to be redeemed shall be based on a valid Assessment Report below the value of Mortgage/Fiduciary Encumbrance Value;
• b. Debt Transferor approves, stating it did not object, or delivered all redemption decision to the Branch Committee/Service Office; and
• c. Having received the approval of the Debtor.

(2) Excepted from provision in Article 229 and Article 272 paragraph (1), Redemption until Rp50,000,000 (fifty million rupiah) can be approved without Valuation first, in case:

• a. Debt Transferor approves, stating it did not object, or delivered all redemption decision to the Branch Committee/Service Office; and
• b. get approval from Debtor; and
• c. approval value not less than Tax Object Selling Price (NJOP)."