Indonesian authority imposes penalties on parties for lodging merger filings up to eight years late

On 5 April 2021, the Indonesian Competition Commission ("KPPU") imposed fines totalling IDR 3.2 billion (approximately USD 221,000) on one Japanese and two Indonesian companies for failing to notify their respective transactions in a timely fashion.

Key takeaways

• The Indonesian merger regime requires notifiable transactions to be submitted 30 days post-closing.
• Failure to meet filing deadlines could result in fines of at least IDR 1 billion being imposed.
• It is not unusual for the KPPU to commence investigations and impose fines on companies many years after transactions have completed.

On 5 April 2021, the KPPU announced that it had imposed fines on one Japanese company and two Indonesian companies for failing to notify their transactions in a timely fashion.

The merger regime in Indonesia requires notifiable transactions to be lodged with the KPPU within 30 business days after closing.

The table below outlines the names of the relevant companies, details of the transaction, how late the filings were, and the amount of the fine imposed:

As outlined in the table above, filings were lodged by the relevant companies between 975 days to eight years late.  It is not uncommon for the KPPU to impose fines on companies many years after transactions have closed, and there is no express statute of limitations pursuant to the merger regime.  For instance, in 2019, the KPPU issued a fine on PT Citra Prima Sejati, an Indonesian company, for failing to notify the KPPU of its acquisitions of two mining companies over five years after the transactions completed.  However, it is not clear how the fines were determined in the cases above.  Even though each of SIS and DSNG notified the KPPU of their transactions many years after closing, the fines imposed on these companies were not materially more than the fine imposed on Orix Corporation (and, in fact, SIS was given exactly the same fine as Orix Corporation). 

In terms of detection, the KPPU keeps close track of transactions which impact on Indonesia.  The KPPU also scrutinises merger notifications to ascertain whether parties have failed to notify prior transactions - this appears to be how the KPPU identified one of DSNG's prior failure to file cases.

Finally, these decisions are significant because they have been published after the implementation of the Omnibus Law, which made major changes to the penalties regime pursuant to Indonesian competition law (see our article "Clarifications to "Omnibus changes" to Indonesia's Competition Law").  Amongst other changes, the Omnibus Law (along with regulations) mandates that the minimum amount of fines to be imposed for competition law breaches (including failure to file) is set at IDR 1 billion.  In addition, the Omnibus Law also removed the fine cap of IDR 25 billion (approximately USD 1.7 million).