12
Jul2021

Registration of Electronic System Operators in Indonesia

Introduction

The operation of electronic systems in Indonesia has been comprehensively regulated in several regulations, ranging from Ministerial Regulations, Government Regulations, to the level of Laws. The development of regulations related to operating electronic systems follows the rapid growth of the technology industry in Indonesia that is fast and dynamic.

Currently, Indonesia has clear regulations regarding the obligations and rights of the parties in conducting an electronic transaction. The current discussion will be focusing on one important obligation of the Electronic System Operator, namely to register the Electronic System.

Electronic System Operator Registration

Registration of Electronic System Operators (ESO) in Indonesia has been regulated since the enactment of the Regulation of Minister of Communication and Informatics of the Republic of Indonesia Number 36 of 2014 concerning Procedures for Registration of Electronic System Operators. The Ministerial Regulation was then revoked and replaced by the Regulation of Minister of Communication and Informatics of the Republic of Indonesia Number 5 of 2020 concerning Implementation of Electronic System Operator for Private Scope (MCI Regulation 5/2020). Private Scope ESO in MCI Regulation 5/2020 is defined as Electronic Systems Operator by people, business entities, and the public[1]. Based on the provisions in Article 2 MCI Regulation 5/2020, it is stated that every Private Scope ESO must register[2].

Registration for Private Scope ESO is submitted to the Minister and the application for registration is made through the Online Single Submission Portal (OSS), otherwise stipulated by the provisions of the laws and regulations[3].

The Minister here is the minister who organizes government affairs in the field of communication and informatics.[4] While OSS is Electronically Integrated Business Licensing or business license issued by OSS institutions for and on behalf of ministers, heads of institutions, governors, or regents/mayors to business actors through an integrated electronic system[5].

Application for registration is done by filling out a form containing the correct information about:[6]

  1. overview of the operation of Electronic Systems;
  2. the obligation to ensure information security in accordance with the provisions of the laws and regulations;
  3. the obligation to protect Personal Data in accordance with the provisions of the laws and regulations; and
  4. the obligation to test the reliability of Electronic Systems in accordance with the provisions of the laws and regulations.

The obligation to register also applies to Private Scope ESO established under the laws of other countries or domiciled permanently in other countries but meets the following condition:[7]

  1. provide services within Indonesia;
  2. conduct business in Indonesia; and/or
  3. Electronic System is used and/or offered in The Territory of Indonesia.

Registration for Private Scope ESO above is done by filling out a form containing the information as mentioned above as well as correct information including:[8]

  1. Private Scope ESO identity;
  2. the identity of the head of the company and/or the identity of the person in charge;
  3. domicile certificate of incorporation and/or deed of incorporation;
  4. the number of customers (users) from Indonesia; and
  5. transaction value originating from Indonesia.

 

Issuance of Private Scope ESO Certificate Registration

The Private Scope ESO Certificate Registration (in Bahasa: Tanda Daftar PSE Lingkup Privat) is issued by the Minister after the registration requirements are declared complete in accordance with MCI Regulation 5/2020 and placed in the Private Scope ESO list. The list of Private Scope ESO as above is posted on the website managed by the Ministry[9].

Changes in Private Scope ESO Registration Information

Changes to registration information as mentioned above must be reported to the Minister[10]. If there is a change but the Private Scope ESO does not notify the Minister of changes, then the Minister will be able to impose sanctions on the Private Scope ESO. Sanctions will be explained in the next Point.

Administrative Sanctions

The Minister shall impose administrative sanctions on the Private Scope ESO which: [11]

  1. do not register as referred to in Point 1;
  2. has registered but does not report changes to the registration information as referred to in Point 3;
  3. do not provide registration information correctly.

If the Private Scope ESO does not register as referred to in letter a, the Minister will impose administrative sanctions in the form of Termination of Access to Electronic Systems (access blocking).[12]

In the event that the Private Scope ESO has a Certificate Registration but does not report changes to the registration information as referred to in letter b or does not provide registration information correctly as referred to in letter c, the Minister will impose administrative sanctions in the form of:[13]

  1. a written notice delivered by an electronic mail and/or other electronic media;
  2. temporary suspension of the Private Scope ESO in the event of not heeding the written notice above;
  3. Termination of Access to Electronic System (access blocking) and revocation of Electronic System Operator Certificate Registration in the case of Private Scope ESO does not confirm within 7 (seven) days after temporary termination.

The Minister may also impose administrative sanctions on the Private Scope ESO based on a request from the Ministry or Institution based on the violations of laws and regulations in the field of the Ministry or Institutions that have authority in accordance with the provisions of the laws and regulations[14].

The Provision concerning Registration for Private Scope ESO

Based on Article 47 MCI Regulation 5/2020, Private Scope ESO must register within a period of no later than 6 (six) months since MCI Regulation 5/2020 is enacted[15]. However, since the enactment of the Regulation of Minister of Communication and Informatics of the Republic of Indonesia Number 10 of 2021 concerning Amendments to Regulation of Minister of Communication and Informatics Number 5 of 2020 concerning Implementation of Electronic System Operator for Private Scope (MCI Regulation 10/2021), the provision regarding registration for Private Scope ESO has changed.

Based on Article 1 MCI Regulation 10/2021, the provisions of Article 47 related to the registration deadline for Private Scope ESO in MCI Regulation 5/2020 are amended. Private Scope ESO must register no later than 6 (six) months since the implementation of Risk-Based Business Licensing through the OSS system is effective.[16]

 

Disclaimer

Any information contained in this Article is provided for informational purposes only and should not be construed as legal advice on any subject matter. You should not act or refrain from acting based on any content included in this Legal Update without seeking legal or other professional advice. This document is copyright protected. No part of this document may be disclosed, distributed, reproduced, or transmitted in any form or by any means, including photocopying and recording or stored in retrieval system of any nature without the prior written consent of SIP Law Firm.

For more information, please contact the Authors

Authors / Contributors

 

R. Yudha Triarianto Wasono, S.H., M.H.

Associate

 

Contact:

Mail       : Yudha@siplawfirm.id

Phone    : +62-21 799 7973 / +62-21 799 7975

 

 

M. Ihsan Abdurrahman, S.H.

Associate

 

Contact:

Mail       : Ihsan@siplawfirm.id

Phone    : +62-21 799 7973 / +62-21 799 7975

 

 

 

[1] Article 1 point 6 MCI Regulation 5/2020

[2] Article 2 paragraph (1) MCI Regulation 5/2020

[3] Article 3 paragraph (1) and paragraph (2) MCI Regulation 5/2020

[4] Article 1 point 25 MCI Regulation 5/2020

[5] Article 1 point 14 MCI Regulation 5/2020

[6] Article 3 paragraph (3) MCI Regulation 5/2020

[7] Article 4 paragraph (1) MCI Regulation 5/2020

[8] Article 4 paragraph (2) MCI Regulation 5/2020

[9] Article 6 MCI Regulation 5/2020

[10] Article 5 MCI Regulation 5/2020

[11] Article 7 paragraph (1) MCI Regulation 5/2020

[12] Article 7 paragraph (2) MCI Regulation 5/2020

[13] Article 7 paragraph (3) MCI Regulation 5/2020

[14] Article 8 paragraph (1) MCI Regulation 5/2020

[15] Article 47 MCI Regulation 5/2020

[16] Article 1 MCI Regulation 10/2021

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