In 2020, the Ministry of Communications and Information (MOCI) issued Regulation No. 5 of 2020 which required the registration of electronic systems providers, including commercial websites and online services.
The mandatory registration is stipulated in Ministry of Communications and Information (MOCI) Regulation No. 5 of 2020 concerning Electronic System Providers in the Private Sector. The relevant provision from this regulation is as follows:
Article 2 paragraph (1):
“Every PSE in Private Sector is required to register.”
PSE refers to Penyelenggara Sistem Elektronik (Electronic System Provider).
Citing a failure to comply with the registration requirement, on 30 July 2022, MOCI blocked access to the following online services/websites:
Although there are numerous other foreign websites that have not fulfilled the registration requirement, it is believed that the reason these websites were targeted was because of their popularity.
It is reported that this action resulted in public backlash because users of these online services were caught off guard.
PayPal users in Indonesia with unsettled accounts felt stranded because they could no longer access their accounts with the service provider. MOCI has therefore reportedly lifted the blockade on PayPal temporarily for Indonesian users to have their PayPal accounts settled before the blockade is reinstated.
What foreign websites should do?
It is important to consider registration with MOCI if your online services are also serving the residents in Indonesia. It is also necessary to consider Ministry of Trade (MOT) regulation No. 50 of 2020 concerning Provisions on Business Licensing, Advertising, Guidance and Supervision of Businesses in Trade through Electronic System where transactions exceed 1000 each year. Where this is the case, it will also be necessary to comply with this regulation, including setting up a representative office in Indonesia.
Note: The above does not constitute legal advice. Please seek professional guidance on your specific situation.
For more information on the above please contact SCOLegal@rouse.com.