Indonesian Law on Aviation - Law Number 15 of 1992


Get listed Get Updates	Advertise your services...

Indonesian Law on Aviation - Law Number 15 of 1992
Author: Achmad S. Kartohadiprodjo
Date: October 2008

Introduction
Aviation matters in Indonesia are regulated by Law Number 15 of 1992. Matters that are dealt with in this law include commercial aircraft and engine transactions and APU leasing agreements. Among the provisions of note are those of its Article 9, as follows:

All aircrafts operated in Indonesia must have a registration certificate
Civil aircrafts eligible for an Indonesian registration certificate are those which are not registered in another country and which meet one of the following conditions:

Owned by an Indonesian citizen or an Indonesian legal entity
Owned by a foreign citizen or a foreign legal entity and operated by an Indonesian citizen on an Indonesian legal entity for a minimum usage period of two years continuously based on a leasing agreement, business lease agreement or any other form of agreement
Owned by a Government institution
Owned by a particular institution permitted by the Government

The provisions on the registration of civil aircrafts as meant in paragraph (2) and the registration of the aircrafts of the Armed Forces of the Republic of Indonesia will be further regulated under a Government Regulation

Aircraft Leasing
The leasing of aircrafts is regulated by Article 9 of Law Number 15 of 1992. The leasing of aircraft engines and Auxiliary Power Units (APUs) is regulated by Article 1548 of the Indonesian Civil Code, which is a general law.

The leasing of an aircraft can be made by way of an agreement. In Indonesia an agreement can be made in a contractual form or a notary deed. A notary deed is a perfect agreement before the Indonesian court. It serves as complete evidence and is fully enforceable.

The Indonesian registration of a foreign aircraft must be conducted by its Indonesian operator. The Indonesian operator is to submit an application for the registration by enclosing the leasing agreement to the Director General of Air Communication. The Director General of Air Communication will examine the application and issue an Approval Letter. This Approval Letter is then shown to the Aircraft Registration Agency which is to issue the Indonesian Certificate of Registration. The Approval Letter is also required to be submitted to the Customs Authority in the processing of the Import License.

Mortgage
Aircraft mortgage is regulated by Article 12 of the Law Number 12 of the year 1992 , which stipulates as follows:

Aircrafts or helicopters that have a registration certificate and Indonesian identification may be pledged as security under a mortgage
Aircraft and helicopter mortgages as meant in paragraph (1) above must be registered
The provisions as meant in paragraph (2) above will be further regulated under a Government Regulation

The fact that Article 12 of Law Number 15 of 1992 stipulates that an aircraft may be pledged under a mortgage means that an aircraft is considered as an immovable good, whereas aircraft engines and APUs are movable goods. This article 12 cannot as yet be implemented because the Government Regulation has not been issued (paragraph 3). The Government Regulation is to regulate, among others, on the person who is to issue the aircraft mortgage deed, the Air Authority or the Public Notary. Where in land matters a notary can issue a land mortgage deed, in ship matters it is the Maritime Authority that has the authority to issue a ship mortgage.

The Indonesian Government on 20 February 2007 ratified the Cape Town, South Africa Convention on International Interest in Mobile Equipment with Protocol to the Convention on International Interest in Mobile Equipment on Matters Specific to Aircraft Equipment, dated 16 November 2001. Nevertheless the provisions of this Convention cannot as yet be implemented for the reason that the implementation regulation has not been issued.

An aircraft's foreign mortgage may be recorded in the Aircraft Registry, but the recordation only serves as an information and none of the rights can be executed in Indonesia.

Repossession of Aircrafts
Law Number 15 of 1992 is silent on the repossession of an aircraft in the event the lessee is in default and where the lessee has the obligation to return the aircraft to the lessor. In the absence of such a remedial provision, a legal advisor will usually suggest the creation of an instrument called Power of Attorney to Repossess Aircraft to be issued by the lessor in favor of the lessee.

Taxes and other charges
For cross-border transactions, the taxes are regulated by Double Tax Treaty Conventions. The tax rates vary between 15% to 20%; however, for transactions with French parties the rate is 0%. The government of Indonesia imposes a stamp duty of IDR 6,000.00 on every agreement. The stamp duty is required in the event that the agreement is used in court proceedings.

Foreign Exchange Flow and Exchange Rate System
Indonesian Law No.24 of 1999 dated May 17, 1999 concerning Foreign Exchange Flow and Exchange Rate System provides that a person is free to own and use foreign currencies. However, the transfer of foreign currencies to and from abroad is subject to a reporting obligation as stated in Regulation No. 1/9/PBI/1999 dated October 28, 1999 concerning the Monitoring of Foreign Exchange Flow and Activities.

Recognition of Foreign Laws
Indonesian courts recognize foreign laws, but not foreign court judgments. As a result, all foreign court judgments must be retried in an Indonesian court.

There are three court levels in the Indonesian judicial system, respectively the District Court or the Court of First Instance, the High Court or the Court of Appeal, and the Supreme Court. The time frame for the proceedings in each court level is six month.

About us
News
Contact