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GOVERNMENT REGULATION
No. 46/2007

CONCERNING
BATAM FREE TRADE AND FREE PORT AREA

BY THE GRACE OF ALMIGHTY GOD
THE PRESIDENT OF THE REPUBLIC OF INDONESIA,

Considering:

• a. that Batam territory and surrounding isles met the criteria for a free trade and port area;
• b. that in order to better maximize the implementation of development as well as guaranteeing business activities in the economic sectors, covering trade, maritime, industry, transportation, banking, tourism and other fields in the area as described in a, it is necessary to stipulate the area to become a free trade and port area;
• c. that based on Article 4 of Government Regulation in Lieu of Law No. 1/2007 concerning Amendment to Law No. 36/2000 concerning Stipulation of Government Regulation in Lieu of Law No. 1/2000 concerning Free Trade and Port Areas to become a law, the establishment of free trade and port areas is stipulated by a government regulation;
• d. that based on consideration as intended in a, b and c above, it is necessary to stipulate Government Regulation concerning Batam Free Trade and Free Port Area;

In view of:

• 1. Article 5 paragraph (2) and Article 33 of the Constitution of 1945;
• 2. Law No. 11/1995 concerning Excise (Statute Book of 1995 No. 76, Supplement to Statute Book 3613);
• 3. Law No. 53/1999 concerning the Establishment of Pelalawan Regency, Rokan Hulu Regency, Rokan Hilir Regency, Siak Regency, Karimun Regency, Natuna Regency, Kuantan Singingi Regency and Batam City (Statute Book of 1999 No. 151, Supplement to Statute Book No. 3902);
• 4. Law No. 36/2000 concerning Stipulation of Government Regulation in Lieu of Law No. 1/2000 concerning Free Trade and Port Areas to become a law (Statute Book of 2000 No. 251, Supplement to Statute Book No. 4053);
• 5. Law No. 17/2003 concerning State Finance (Statute Book of 2003 No. 47, Supplement to Statute Book No. 4286);
• 6. Law No. 32/2004 on Regional Administration (Statute Book of 2004 No. 125, Supplement to Statute Book No. 4437) as has already been amended by Law No. 8/2005 concerning Stipulation of Government Regulation in Lieu of Law No. 3/2005 concerning the Amendment to Law No. 32/2004 concerning Regional Administration to become a law (Statute Book of 2005 No. 108, Supplement to Statute Book No. 4548);
• 7. Law No. 10/1995 concerning Customs Affair (Statute Book of 1995 No. 75, Supplement to Statute Book No. 3612) as has already been amended by Law No. 17/2006 concerning the Amendment To Law No. 10/1995 concerning Customs Affair (Statute Book of 2006 No. 93, Supplement to Statute Book No. 4661);
• 8. Law No. 26/2007 concerning Spatial Layout (Statute Book of 2007 No. 68, Supplement to Statute Book No. 4725);

HAS DECIDED:

To stipulate:

THE GOVERNMENT REGULATION CONCERNING BATAM FREE TRADE AND FREE PORT AREA

CHAPTER I
THE ESTABLIHMENT OF BATAM FREE TRADE AND PORT AREA

Article 1

(1) By this government regulation, Batam shall be stipulated as a free trade and port area for 70 (seventy) years as from the date of enforcement of this government regulation.

(2) The Batam Free Trade and Port Area as intended in paragraph (1) shall cover Batam Island, Tonton Island, Setokok Island, Nipah Island, Rempang Island, Galang Island and Galang Baru Island.

(3) The fixed border and coordinate point of the territory as intended in paragraph (1) shall be as contained in the enclosed map inseparable from this Government Regulation.

Article 2

(1) In the Batam Free Trade and Port Area, activities in the economic sectors, such as trade, maritime, industry, transportation, banking, tourism and other sectors shall be executed.

(2) The other sectors as intended in paragraph (1) shall be stipulated by a special Government Regulation.

(3) Development of activities in the economic sectors in the free trade and port area as intended in Article 1 paragraph (2) shall be in accordance with the Batam City Layout Plan.

CHAPTER II
TRANSITIONAL PROVISION

Article 3

(1) All assets of Batam Industrial Development Authorities shall be transferred to become assets of the Management Board of the Batam Free Trade and Free Port Area, excluding assets already transferred to the Batam Municipal Government, in accordance with legislation.

(2) Employees of Batam Industrial Development Authorities shall be transferred to become employee of the Management Board of the Batam Free Trade and Free Port Area.

Article 4

(1) The right to manage land becoming authority of the Batam Industrial Development Authorities and right to manage land becoming authority of the Batam City Government in the Batam Free Trade and Free Port Area as intended in Article 1 paragraph (2) shall shift to the Management Board of the Batam Free Trade and Free Port Area in accordance with legislation.

(2)The existing rights on the rights to manage the land as intended in paragraph (1) shall remain effective until the validity period expires.

(3) The extension/renewal of the rights as intended in paragraph (2) after expiring shall be done in accordance with legislation.

CHAPTER III
CONCLUSION

Article 5

With the enforcement of this government regulation, all agreements, commitments or cooperation as well as licenses or facilities granted by the Batam Industrial Development Authorities and Batam City Government shall be declared to remain effective until expiring.

Article 6

(1) The Management Board of the Batam Free Trade and Free Port Area shall be stipulated in not later than December 31, 2008.

(2) Before the Management Board of the Batam Free Trade and Free Port Area is established, the tasks and authority of the board shall be executed jointly by the Batam Municipal Government and Batam Industrial Region Development Authorities in accordance with their respective basic tasks and functions.

Article 7

The government regulation shall come into force as from the date of promulgation.

For public cognizance, the government regulation shall be promulgated by placing it in Statute Book of the Republic of Indonesia.

Stipulated in Jakarta
On August 20, 2007
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
Signed
DR. H. SUSILO.BAMBANG YUDHOYONO

Promulgated in Jakarta
On August 20, 2007
THE MINISTER OF LAW AND HUMAN RIGHTS.
Signed
ANDI MATTALATTA

STATUTE BOOK OF THE REPUBLIC OF INDONESIA YEAR 2007 No. 107

Elucidation to GOVERNMENT REGULATION
No. 46/2007