Further tightening of Indonesia's natural resources export proceeds retention regime

Introduction

Following our earlier client alert on Government Regulation Number 8 of 2025 ("GR 8/2025") and its significant changes to the retention requirements for foreign exchange export proceeds derived from natural resources activities (Devisa Hasil Ekspor dari Barang Ekspor Sumber Daya Alam, "DHE SDA"),¹ the Indonesian Government has introduced two further amendments to Government Regulation Number 36 of 2023 on Export Proceeds from Business, Management and/or Processing Activities of Natural Resources ("GR 36/2023"):

i. Government Regulation Number 2 of 2026 ("GR 2/2026"), which was enacted on 14 January 2026 and effective from 26 February 2026; and

ii. Government Regulation Number 21 of 2026 ("GR 21/2026"), which was enacted on 6 May 2026 and effective from 1 June 2026.

GR 2/2026 represents one of the most significant amendments to the DHE SDA framework since GR 36/2023 was first enacted. Its key features include: (a) a mandatory requirement to deposit and place DHE SDA (including in the form of financial instruments) at state-owned enterprise banks ("SOE Banks"), except for bilateral trade arrangements with Indonesia's partner countries; and² (b) an express cap of 50% on the conversion of DHE SDA into Indonesian Rupiah ("IDR")³.

Notably, whilst GR 2/2026 was enacted on 14 January 2026, the official text of GR 2/2026 was only made publicly available to market participants at a considerably later date, notwithstanding that its provisions purport to apply from 26 February 2026. This timing gap may give rise to questions regarding legal certainty for affected parties who were required to comply with provisions that were not yet accessible during the relevant period.

Building on GR 2/2026, GR 21/2026 broadens the bilateral trade exception to encompass a wider range of inter-governmental trade arrangements.⁴ To implement these changes, Bank Indonesia has issued Bank Indonesia Regulation Number 5 of 2026 ("PBI 5/2026"),⁵ the second amendment to Bank Indonesia Regulation Number 7 of 2023 on Export Proceeds and Import Payments ("PBI 7/2023") and Regulation of the Member of the Board of Governors Number 16 of 2026 concerning the Third Amendment to Regulation of the Member of the Board of Governors Number 4 of 2023 concerning Export Proceeds Foreign Exchange and Import Payment Foreign Exchange ("PADG 16/2026"). This client alert provides an overview of the key changes introduced by GR 2/2026, GR 21/2026, PBI 5/2026 and PADG 16/2026.

1. Key changes under GR 2/2026

A. Mandatory placement at SOE Banks

Under the previous regime, exporters could place their DHE SDA into the DHE SDA Special Account⁶ at Lembaga Pembiayaan Ekspor Indonesia ("Indonesia Eximbank") and/or any bank conducting business activities in foreign exchange ("FX Bank").⁷ GR 2/2026 significantly changes this position: all DHE SDA must now be deposited in a DHE SDA Special Account at an FX Bank that is an SOE Bank.⁸

This appears to represent a significant narrowing of permissible depository institutions. The amended Article 1 (4) of GR 36/2023 explicitly excludes Indonesia Eximbank from the revised definition of the "DHE SDA Special Account", and the elucidation of GR 2/2026 confirms that this amendment is intended to strengthen the administration and supervision of both the placement and utilisation of DHE SDA.⁹

B. Expanded eligible deposit instruments, but only at SOE Banks

GR 2/2026 revises the list of eligible deposit instruments in which DHE SDA may be placed. DHE SDA must now be placed in one or more of the following:

i. the DHE SDA Special Account at an SOE Bank;

ii. banking instruments issued by an SOE Bank;

iii. instruments issued by Bank Indonesia; and/or

iv. government bonds (surat utang negara) and/or government sharia securities (surat berharga syariah negara) denominated in foreign currency.

The inclusion of government bonds (surat utang negara) and government sharia securities (surat berharga syariah negara) in foreign currency as eligible placement instruments is new under GR 2/2026. According to the elucidation, this forms part of the government's effort to expand placement options through liquid and competitive investment instruments, whilst optimising the economic value of DHE SDA.¹⁰

Government bonds (surat utang negara) and government sharia securities (surat berharga syariah negara) are, however, subject to several restrictions. Government bonds (surat utang negara) and/or government sharia securities (surat berharga syariah negara) denominated in foreign currency may not be withdrawn prior to expiry of the placement period prescribed under Article 7 of GR 36/2023 as amended by GR 8/2025 (namely, 12 months for DHE SDA originating from the mining sector (excluding oil and gas), as well as the plantation, forestry, and fisheries sectors ("Non-Oil and Gas Sectors"), and 3 months for DHE SDA derived from the oil and gas subsector within the mining industry ("Oil and Gas Sector")).¹¹ These instruments may also be subject to a holding period during which the holder is prohibited from transferring ownership.¹² Where such a holding period applies, withdrawal is permitted only after it has lapsed and must be effected through secondary market transactions.

PBI 5/2026 provides further detail on the utilisation of these placement instruments. Under the revised Article 20 of PBI 7/2023 (as amended by PBI 5/2026), placement instruments may be utilised by natural resources exporters as collateral for Rupiah-denominated loans from banks. Creditors should note, however, that even where a valid security interest has been established over the DHE SDA Special Account, enforcement does not guarantee unrestricted access to the funds held therein. Upon enforcement, the disbursement and utilisation of funds from the DHE SDA Special Account remain subject to the prevailing regulatory framework, including the mandatory minimum placement period prescribed under GR 36/2023 (as amended) and its implementing regulations.

C. The 50% cap on IDR conversion

GR 2/2026 introduces an express cap on the conversion of DHE SDA into IDR for the Non-Oil and Gas Sectors. Exporters in these sectors must now ensure that the maximum amount of DHE SDA converted to IDR does not exceed 50% of the export value stated on the Export Customs Declaration (Pemberitahuan Pabean Ekspor, "PPE").¹³

The 50% cap is calculated on the basis of accumulated DHE SDA deposited into the DHE SDA Special Account in the relevant month of deposit. Where the actual conversion is below 50%, the unconverted balance may still be used for permitted foreign-currency payments (as further elaborated in paragraph 1(D) below).

The remaining 50% balance in the DHE SDA Special Account must be retained in the DHE SDA Special Account and/or other eligible foreign-currency placement instruments at an SOE Bank for the full retention period (12 months for the Non-Oil and Gas Sectors).¹⁴

The elucidation of Article 11A (1a) of GR 36/2023 as amended by GR 2/2026 provides the following illustration: an exporter placing USD10,000,000 of DHE SDA may convert a maximum of USD5,000,000 to IDR, whilst the remaining USD5,000,000 must be retained in the DHE SDA Special Account and/or other eligible instruments for the applicable retention period.

Non-compliance with the 50% conversion cap is now expressly listed as a ground for administrative sanctions in the form of suspension of export services.¹⁵

At the implementing level, PBI 5/2026 operationalises the IDR conversion cap through the insertion of a new Article 22A into PBI 7/2023. Article 22A (1) specifies that the IDR conversion entitlement applies only to DHE SDA from Non-Oil and Gas Sectors. Conversion may be effected through cash-based transactions (transaksi yang bersifat tunai) (today (TOD), tomorrow (TOM), and spot transaction) and forward transactions at SOE Banks.¹⁶ The maximum conversion percentage is determined in accordance with the applicable government regulations, and the calculation is based on accumulated DHE SDA deposited into the DHE SDA Special Account in the relevant month of deposit.¹⁷ Bank Indonesia’s supervision now expressly extends to monitoring compliance with the conversion percentage limit.¹⁸

Building on PBI 5/2026, PADG 16/2026 inserts a new Article 38A into PADG 4/2023, which confirms the operational mechanics of the 50% IDR conversion cap. Under Article 38A, conversion may be effected through cash transactions (transaksi tunai) and forward transactions with SOE Banks. The maximum amount convertible to IDR remains 50% of the export value stated in the PPE, calculated on an accumulated basis by reference to DHE SDA deposited into the DHE SDA Special Account in the relevant month of deposit. Exporters remain responsible for ensuring that conversions do not exceed the 50% threshold, and a breach is expressly subject to administrative sanctions under the prevailing laws and regulations.

PADG 16/2026 also introduces a new Article 40A to address potential compliance shortfalls. Under this provision, a natural resources exporter that does not hold sufficient foreign currency to fund (i) a shortfall in its placement obligations under Article 25, or (ii) the return of amounts converted to IDR in excess of the 50% cap under Article 38A, may purchase the required foreign currency from an SOE Bank. The purchase must be supported by underlying documentation from the competent authority confirming the relevant shortfall or excess conversion, is capped at the amount of that shortfall or excess, and must otherwise comply with Bank Indonesia’s foreign exchange market transaction rules.

D. Revised permitted uses of DHE SDA

GR 2/2026 revises the list of permitted uses of DHE SDA while it remains in the DHE SDA Special Account. Under the revised Article 11A of GR 36/2023 as amended by GR 2/2026, the permitted uses are now as follows:

i. foreign-currency payment of tax obligations, non-tax state revenue, and other government obligations;

ii. foreign-currency dividend payments;

iii. foreign-currency payment for procurement of raw materials, auxiliary materials, or capital goods and services;

iv. repayment of loans for capital goods procurement and working capital in foreign currency; and/or

v. conversion to IDR at an SOE Bank, subject to the 50% cap and Bank Indonesia regulations.

The scope of permitted loan repayments under item (iv) has been expanded from GR 8/2025 to include working capital loans in addition to capital goods financing. Under the previous regime, the regulation only specified loans for the “procurement of capital goods” (pengadaan barang modal), a term that was not clearly defined and left room for interpretive uncertainty, as flagged in our earlier client alert on GR 8/2025. The express inclusion of working capital loans (modal kerja) under GR 2/2026 appears to address this ambiguity, allowing exporters to use their DHE SDA for general operational financing without needing to tie the facility to specific capital asset procurement.

In addition, foreign currency payments for the procurement of raw materials, auxiliary materials, or capital goods and services under item (iii) are no longer expressly restricted to goods that are not yet available, unavailable, only partially available, or available but do not meet the required specifications domestically. Under GR 8/2025, exporters were required to demonstrate that the relevant goods or services could not be sourced locally before utilising their DHE SDA for such procurement. GR 2/2026 no longer includes this domestic availability condition, thereby affording exporters greater flexibility in their procurement decisions and reducing the administrative burden of establishing local unavailability.

E. Bilateral reciprocal trade exception

GR 2/2026 introduces a new Article 18A which provides a specific exception for the implementation of bilateral reciprocal trade agreements (perjanjian bilateral mengenai perdagangan resiprokal). For mining-sector DHE SDA covered by this exception:

i. the minimum placement percentage is reduced from 100% to 30% for at least 3 months;

ii. placement may be made at any FX Bank (not limited to SOE Banks); and

iii. conversion to IDR may be made at any FX Bank.

2. GR 21/2026: Expansion of the bilateral trade exception

GR 21/2026 amends Article 18A to expand the bilateral trade exception introduced by GR 2/2026. Whereas GR 2/2026 limited the exception to "bilateral agreements on reciprocal trade" (perdagangan resiprokal), GR 21/2026 broadens the scope to cover any "bilateral agreement on trade or understanding or other agreement on trade" (perjanjian bilateral mengenai perdagangan atau kesepahaman atau kesepakatan lainnya mengenai perdagangan).

Under this expanded exception, for mining-sector DHE SDA:

i. the minimum placement remains 30% for at least 3 months;

ii. placement may be made at any Bank Indonesia-designated FX Bank (not limited to SOE Banks); and

iii. conversion to IDR may be made at any Bank Indonesia-designated FX Bank.

Bank Indonesia is authorised to designate which FX Banks qualify under this exception. The elucidation of GR 21/2026 explains that this expansion responds to significant shifts in global trade and geopolitics following the enactment of GR 2/2026. The concept of openness (keterbukaan) previously limited to reciprocal trade arrangements now extends to all partner countries that have bilateral trade agreements, understandings, or other arrangements with Indonesia, reflecting the principle of equal treatment amongst all trade partners (prinsip fairness atau perlakuan setara bagi seluruh mitra).¹⁹

At the implementing level, PBI 5/2026 gives effect to this expanded bilateral trade exception through the insertion of a new Article 47A into PBI 7/2023. Under this provision, Bank Indonesia is authorised to designate specific banks for the purposes of implementing the special provisions relating to bilateral trade agreements, understandings, or other trade arrangements.²⁰ PADG 16/2026 sets out the designation criteria under new Articles 68A and 68B, which include: (a) general criteria (bank size, interconnectedness, and complexity); (b) specific criteria (transaction volume, competence, risk management, and infrastructure); and (c) other specific criteria (notably, Indonesian branch offices of foreign banks headquartered in countries with bilateral trade arrangements with Indonesia). Once designated, such banks are expected to be placed on the same regulatory footing as SOE Banks for purposes of handling DHE SDA under this exception. However, the specific designated bank list remains to be published, and exporters and banks should monitor Bank Indonesia’s announcements.

Notwithstanding these developments, significant interpretive and practical questions remain. Neither GR 2/2026 nor GR 21/2026 expressly defines the term “bilateral agreement on trade” (perjanjian bilateral mengenai perdagangan) or specifies the types of arrangements that would qualify under Article 18A. However, Article 68A (6) (a) of PADG 16/2026 provides some contextual guidance by referring to “a bank that is a branch of a bank domiciled abroad from a country that has a bilateral agreement on trade, or other memoranda or understandings on trade,” suggesting that the relevant criterion is the existence of such an arrangement at the country-to-country level. Further implementing regulations or official guidance from Bank Indonesia may be necessary to provide greater clarity on this point.

Several key questions therefore remain open:

• Does eligibility turn on the destination country of the exported goods?
• Is the nationality or domicile of the buyer relevant?
• Is the exemption limited to specific commodities covered by the applicable trade arrangement?
• Now that PADG 16/2026 has set out the criteria for designating eligible FX Banks, when will Bank Indonesia publish the actual list of designated banks?
• Will governmental designation or confirmation from other authorities (such as the Ministry of Finance or Ministry of Trade) be required before exporters may rely on the exemption?

3. Application of GR 2/2026

GR 2/2026 was enacted on 14 January 2026, yet states that it takes effect from 26 February 2026.²¹ The official text of the regulation, however, was only made publicly available at a considerably later date.

The transitional provisions under Article II of GR 2/2026 stipulate that:

i. for PPEs issued from 26 February 2026 onwards, the full provisions of GR 2/2026 apply; and

ii. for PPEs issued before 26 February 2026 that are still under supervision by Bank Indonesia and/or the Financial Services Authority (Otoritas Jasa Keuangan, or "OJK"), the relevant exporters are deemed to have satisfied all their obligations.

The apparent practical effect is that exporters who issued PPEs on or after 26 February 2026, and who may have structured their DHE SDA management in reliance on the then-publicly available regulatory framework, may now be subject to the more restrictive requirements of GR 2/2026, including the SOE Bank-only placement requirement and the 50% IDR conversion cap.

Similarly, GR 21/2026 applies the same transitional approach: PPEs issued from 1 June 2026 are subject to the new provisions, while exporters with PPEs issued before that date and under ongoing supervision are deemed compliant.

4. Key takeaways and recommended actions

Whilst GR 2/2026, GR 21/2026, PBI 5/2026 and PADG 16/2026 introduce certain developments that may benefit exporters, including an expanded scope of permitted uses (notably the inclusion of working capital loan repayments and the removal of the domestic availability condition for procurement payments) and additional eligible placement instruments (such as foreign currency-denominated government bonds and sharia securities), the cumulative effect of these regulations, building upon the already stricter requirements of GR 8/2025, appears to be a more restrictive DHE SDA retention regime.

Natural resources exporters in Indonesia should review their DHE SDA management structures, banking arrangements, and internal compliance procedures in light of these amendments and their implementing regulations. In particular, exporters should consider: transitioning their DHE SDA Special Accounts to SOE Banks (if not already done); recalibrating their treasury models to accommodate the 50% IDR conversion cap; monitoring Bank Indonesia’s forthcoming designation of eligible banks under the bilateral trade exception criteria set out in PADG 16/2026; and assessing any potential compliance gaps from 26 February 2026.

The DHE SDA retention regime continues to operate on a self-assessment basis. Compliance obligations, and the attendant risks of non-compliance, generally rest with the exporter rather than the depository bank. In the context of financing transactions where DHE SDA or DHE SDA Special Accounts are offered as security, lenders should be aware that any regulatory breach by the exporter-borrower (such as failure to meet placement requirements or exceeding the IDR conversion cap) may adversely affect the value or accessibility of the collateral, with the risk of such non-compliance generally borne by the exporter rather than the financing bank.

Should you have any questions regarding the impact of these regulations on your operations, or require assistance in reviewing your compliance arrangements, please contact your usual Ashurst Perkins Coie OSP contact.

Authors: Rizaldy Tauhid, Partner; Chandra Setyabrata, Senior Associate; Fernanda Dharmawan, Associate; Liana Azirul, Associate and Nabitha Karunia, Junior Associate.

Want to know more?

• Recent Developments in Indonesia's Natural Resources Export Proceeds Retention Regime (24 April 2025)