Recent developments in Indonesia's natural resources export proceeds retention regime

Introduction

In response to increasingly challenging global macroeconomic outlook and mounting pressure on Indonesia's currency, the Indonesian Rupiah ("IDR"), the Indonesian Government recently issued Government Regulation Number 8 of 2025 ("GR 8/2025"), amending the previously applicable Government Regulation Number 36 of 2023 on Export Proceeds from Business, Management and/or Processing Activities of Natural Resources ("GR 36/2023")¹.

GR 8/2025 introduces significant changes to the percentage and timing requirements for the retention of foreign exchange export proceeds derived from business activities, management and/or processing of certain natural resources products in the mining, plantation, forestry and fishery sectors (Devisa Hasil Ekspor dari Barang Ekspor Sumber Daya Alam or "DHE SDA").² Whereas the previous regime provided for a retention onshore of 30% of the foreign exchange export proceeds for a period of no less than 3 months, the new regime raises substantially those requirements to 100% and 12 months respectively. This represents a significant policy shift aiming at stimulating foreign exchange inflows, reinforcing Indonesia’s foreign reserve holdings, and underpinning the government’s mandate to maintain IDR exchange rate stability.

Importantly, the new requirements do not apply to proceeds from oil and gas (which remain subject to the previous retention percentage and timing regime under GR 36/2023), and GR 8/2025 also provides for certain permitted utilization of DHE SDA during the new retention period allowing for some leeway from the new stricter requirements.

In addition, GR 8/2025 expands Bank Indonesia's supervisory authority by enhancing its role in monitoring compliance of the onshoring requirements through inspections of the Indonesia Eximbank (Lembaga Pembiayaan Ekspor Indonesia – "LPEI") and banks authorised to conduct foreign exchange-related activities ("FX Banks")³.

In tandem with the promulgation of GR 8/2025, Bank Indonesia has issued a separate implementing regulation to ensure consistency of its regulatory instruments with the updated export proceeds regime (“BI Regulation 3/2025”⁴).

This article provides an overview of the new requirements and the key differences from the previously applicable DHE SDA retention regime, and insights on the implementation and anticipated enforcement of the new policy, as well as, critically, how this may affect natural resources exporters (such as mining and minerals or plantation operations).

1. General Requirement of DHE SDA Onshore Retention

Previous regime under GR 36/2023

Since the enactment in July 2023 of GR 36/2023, DHE SDA with an export value of USD 250,000 and above⁵ shall firstly be deposited into the Indonesian financial system (sistem keuangan Indonesia) in a designated Natural Resources Export Proceeds Special Account (Rekening Khusus Devisa Hasil Ekspor Sumber Daya Alam – "DHE Special Account") at LPEI and/or FX Banks⁶. This threshold is calculated based on the export value stated in the Exports Custom Notification (Pemberitahuan Pabean Ekspor – "PPE") for the relevant exported natural resources.⁷

The retention requirement mandated that no less than 30% of the DHE SDA was required to be retained in a DHE Special Account for a minimum of 3 months from the date of its initial placement.

Once deposited into the DHE Special Account and during the retention period, the retained amount had to remain within the Indonesian financial system in the form of:

2. Key Changes to the DHE SDA Retention Regime

With the issuance of GR 8/2025 and the related Bank Indonesia regulations, the following key changes to the DHE SDA retention requirements are being introduced:

A. Distinction of DHE SDA Based on Sector-Specific Criteria

Contrary to the provisions of GR 36/2023 which applied generally, the new regime introduces a more refined sectoral classification of the DHE SDA, specifically: (i) 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 (ii) DHE SDA derived from the oil and gas subsector within the mining industry ("Oil and Gas Sector").

In addition to this general classification under GR 8/2025, Minister of Finance (“MOF”) Decree No. 2/KM.4/2025 on the Types of Natural Resource Exported Goods Required to Repatriate Export Proceeds into the Indonesian Financial System provides a detailed list of exported natural goods - classified by Harmonized System (HS) Codes - that determines the origin of the relevant DHE SDA and the applicability of the retention requirement under GR 36/2023 (as amended by GR 8/2025).

This sector-based distinction will be applied substantively in the context of the newly introduced retention provisions under GR 8/2025.

B. Minimum Retention Amount and Period

While the general DHE SDA retention requirement under GR 36/2023 remains unchanged, GR 8/2025 introduces updated retention percentages and timelines, imposing the following obligations on exporters:

in Eligible Deposit Instruments⁸, as further discussed in paragraph (C) below.

PADG 4/2025 further stipulates that the amount of DHE SDA deposits shall be calculated using the prevailing United States Dollar middle rate as published by Bank Indonesia, or, in the absence thereof, the exchange rate published by Reuters or any designated successor ⁹.

C. Eligible Deposit Instruments

While GR 8/2025 does not alter the general types of Eligible Deposit Instruments provided under GR 36/2023, BI Regulation 3/2025 elaborates further on the form of Eligible Deposit Instruments as follows:

In addition, GR 8/2025 introduces a critical refinement: in instances where exporters choose to retain their DHE SDA in Eligible Deposit Instruments other than a DHE Special Account (collectively, "Non-Special Account Deposit Instruments"), they are expressly prohibited from withdrawing the funds before the maturity date of the respective Non-Special Account Deposit Instruments.¹⁰ 

Meanwhile, PADG 4/2025 also introduces the following specific provisions regarding the 'maturity date' of Non-Special Account Deposit Instruments.

Notwithstanding the distinctions in the 'maturity date' provisions above, PADG 4/2025 stipulates that any DHE SDA funds deposited in Non-Special Account Deposit Instruments must be returned to their originating DHE Special Account at the end of the maturity of such instruments before being available to the exporter for further utilization (including for the purpose of repatriation).

D. Permitted Uses of DHE SDA Funds in the DHE Special Account

DHE SDA originating from the Non-Oil and Gas Sectors

Notwithstanding the significant increase in retention percentage and timeline for DHE SDA originating from the Non-Oil and Gas Sectors, GR 8/2025 thankfully provides a certain degree of flexibility for exporters in these sectors by allowing the use of retained DHE SDA funds in the DHE Special Account (but not in other Eligible Deposit Instruments), during the retention period, for the following purposes ("Permitted Uses"):¹³

GR 8/2025 further states that amounts used for any Permitted Uses may be deducted from the retained DHE SDA amounts.¹⁵ In practice, this means that the relevant exporters are not required to 'top up' or 'refund' the DHE SDA funds used for Permitted Uses to the DHE Special Account, during the retention period.

When utilising the DHE SDA funds in the DHE Special Account for any of the Permitted Uses (other than for the conversion to IDR), exporters must submit the following documents (as applicable) to LPEI and/or the FX Bank where the DHE Special Account is held:¹⁶

The above list of Permitted Uses will be of critical importance to exporters in terms of their cash management and foreign currency loan repayment obligations. From an economic standpoint, the Permitted Uses plays a key role in how exporters can manage liquidity, hedge against currency risks, and meet operational financing needs. Ensuring alignment with the Permitted Uses will be essential for maintaining exporters' efficient treasury operations and avoiding disruptions in working capital cycles.

From a legal standpoint, the new regime is based on self-assessment where exporters are meant to determine whether certain types of utilization of their retained DHE SDA are in line with the list of the Permitted Uses. If the proposed utilization does not clearly fit with any of the permitted items, importers may want to seek advice and/or check with Bank Indonesia and other regulators (such as the Coordinating Ministry for Economic Affairs) to obtain formal clarification or guidance and seek to mitigate compliance risks.

DHE SDA originating from the Oil and Gas Sector

On the other hand, no similar flexibility is granted under GR 8/2025 for DHE SDA originating from the Oil and Gas Sector with regards to which at least 30% must be retained onshore in an eligible instrument for no less than 3 months.

E. Supervisory and Sanctions

GR 8/2025 stipulates that non-compliance with the DHE SDA retention obligations, including the percentage and timing requirements (as applicable), will be subject to administrative sanctions, including potentially the suspension of export services¹⁷ through blocking of (both electronic and manual) access to export services by the Indonesian Directorate General of Customs and Excise.¹⁸

The supervisory roles of the MOF, Bank Indonesia and OJK remain the same as under the previous regime of GR 36/2023, where Bank Indonesia has the authority to supervise compliance with the requirements through inspections of LPEI and FX Banks.¹⁹ The results of Bank Indonesia's supervision and inspections will form the basis for imposing and revoking sanctions.²⁰

3. Key Takeaways

From a macroeconomic standpoint, the newly introduced regulatory regime under GR 8/2025 is ostensibly crafted to reinforce Indonesia’s financial stability and stimulate domestic economic activity by promoting greater circulation of proceeds from the export of natural resources (DHE SDA) within the local financial system. However, the significant increase in retention percentages, coupled with the extension of the mandatory retention period, may impose substantial constraints on business actors operating in the relevant commodities sectors in Indonesia—particularly those whose operating models are heavily reliant on export-driven revenue streams and the timely repatriation of export proceeds.

A key area of focus from the perspective of market participants concerns the scope of the Permitted Uses which may provide ways to soften the impact of the new requirements on corporate cashflow management. Two notable permitted uses which exporters will look to rely on and optimize are:

Exporters are also encouraged to engage with their FX Banks to seek to identify compliant financial strategies and implementation pathways under this new regime. Such forward-looking approach should help preserve operational stability while ensuring adherence to the new regulatory expectations.

Authors: Rizaldy Tauhid, Managing Partner; Frédéric Draps, Partner / Foreign Legal Consultant; Chandra Setyabrata, Senior Associate and Hakim Anantaputra, Associate.