On 19 May 2017, the Minister of Transportation of the Republic of Indonesia (“MoT”) issued Regulation No. PM 39 Year 2017 regarding the Registration and Nationality of Vessel (“MoT Reg 39/2017”). MoT Reg 39/2017 replaces the previous Regulation No. PM 13 Year 2012 by providing comprehensive requirements and timelines for the completion of applications on vessel registration, transfer of ownership, transfer of hypothec over the vessel as well as vessel historical documents.
In this alert, we discuss some of the key highlights of these changes.
1. Restriction on foreign ownership of shares
For vessel registration, MoT Reg 39/2017 requires the foreign ownership of shares for Indonesian joint venture companies to be as follows:
2. Additional documents required for vessel registration and transfer of ownership
MoT Reg 39/2017 requires additional documents to be provided for vessel registration and transfer of ownership as follows:
3. Additional circumstances to prove vessel ownership
MoT Reg 39/2017 also provides for additional circumstances where vessel owners can prove their ownership as follows:
4. Vessel deregistration basis
Vessels may be deregistered by way of an application from the vessel owner that the vessel:
Alternatively, a final and binding court decision may be obtained for the vessel deregistration on grounds that the owner has a criminal conviction.
5. Vessel nationality document required
An Indonesian registered vessel must obtain the Vessel Nationality Document as proof of vessel nationality. The Vessel Nationality Document consists of the following certificates:
The above certificates shall be validated by the Harbour Master/Syahbandar on an annual basis.
The following documents are required for the validation of the Vessel Nationality Document of the Marine Certificate, Large Vessel Pass, and Small Vessel Pass:
For the River and Lake Pass validation as mentioned in item (d) above, MoT Reg. 39/2017 does not stipulate what documents are required.
6. Online document submission
All relevant documents for registration and nationality of vessel must be submitted electronically through Electronic Vessel Registration System/Sistem Pendaftaran Kapal Elektronik ( “SPKE”).
7. Timeframe for application of vessel registration
MoT Reg 39/2017 also provides specific timeframe of vessel registration as follows:
8. Hypothec of vessel
A registered vessel may be used as security for a loan by encumbering the vessel with hypothec. The hypothec security can be done through a hypothec deed made before the registration of the vessel and the hypothec receiver can be, among others:
In conclusion, MoT Reg. 39/2017 provides more certainty to business players in the shipping sector when it comes to registering or applying for licences for their vessels within a specific timeframe. The introduction of the SPKE has facilitated this process further.
This alert is for general information only and is not a substitute for legal advice.