PSE Regulation Update: 3 Things Leading to Sanctions

Introduction

Following National Regulation No. 71 of 2019, the Indonesian Government had previously issued a PSE regulation (or Penyelenggara Sistem Elektronik or Electronic System Provider). However, these government regulations still require an extensive and detailed specification on how private entities should organise their electronic systems and obtain PSE certificates. Most of the electronic system is operated by private entities, due to the popularity of online business in Indonesia.

The Ministry of Communications and IT (Menkominfo) issued Regulation No 5 of 2020, which repeals and replaces Regulation No 19 of 2014 concerning internet web management websites and Regulation No 36 of 2014 concerning the registration of electronic systems providers. This article will discuss the changes in Regulation No 5 of 2020 concerning privately-owned electronic systems providers or known as the privately-owned PSE in Indonesia.

Who should register for the certificate?

The regulation states that private PSE which fulfil the following categories must register for the PSE certificate via the Online Single Submission (OSS) system:

1. Private PSE regulated or supervised by Menkominfo or government bodies based on the boards of laws and regulations; 
2. Private PSE that own portals, sites, or network applications on the internet used to;
   • provide, manage, and/or offer commercial goods and/or services;
   • provide, manage, and/or conduct financial activity services;
   • send materials or paid digital content to the Electronic Systems User’s device via data networks, either by downloading through portals or sites, sending via email, or using other applications;
   • provide, manage, and/or operate communications systems comprising but not limited to short messages, voice calls, video calls, electronic mails, and network conversations in the form of a digital platform, network services and social media;
   • search engine services, the services of electronic information provider in the form of texts, audio, images, animation, music, video, films and games, or combinations thereof in part and/or entirety; and/or
   • process the personal information for public service operational activities involving electronic transactions.

What are the sanctions for not complying to PSE regulation?

Menkominfo may inflict administrative sanctions such as access blocking under the following conditions:

• Private PSE who do not register for the PSE certificate
  This registration obligation applies not only to local private PSEs but also to all foreign private PSEs that are located overseas and established according to other foreign laws and regulations, which fulfil the following criteria:
  • providing services within the territory of Indonesia;
  • doing business in Indonesia; and/or
  • the electronic system is used and/or offered in Indonesian territory.

• Registered Private PSE who do not report any changes in the following registration data
  • Electronic System Name
  • Electronic System Sector
  • URL of website
  • Domain name system and/or IP server
  • Business model description
  • Short description of the electronic system function and electronic system business process
  • Location where electronic system and electronic data are managed, processed and/or stored
  • a statement stating that Private PSE guarantees and implements the obligation to provide access to electronic system and electronic data
  • A statement of obligation to ensure the information security
  • A statement of obligation to protect user personal data
  • A statement of obligation to perform feasibility test of electronic system
  • Information about names, address, and form of legal entity, also deed of company and last amendment deed.
  • Tax Identification Number or Nomor Pokok Wajib Pajak (NPWP)
  • Names, Citizen Number or Nomor Induk Kependudukan (NIK), Phone Number and;
  • a statement stating that Private PSE has legality in carrying out business activities from the related  Ministry or other government entities.
  • Identity of Private PSE
  • Identity of head of the company or person in charge
  • Letter of domicile and/or certificate of incorporation
  • Number of users from Indonesia
  • Transactions value from Indonesia

• Registered Private PSE who do not report any changes in the following registration dataThe correct information should consist of the same criteria as point Number 2 above. Note Regulation 5 of 2020 also requires all privately-owned PSE to enrol their electronic system prior to any utilisation of their electronic services by users. 

Conclusion – PSE Regulation Update

Due to the updated PSE Regulation, applying for a private PSE certificate could be a time-consuming task. However, you can save your time by hiring a trusted legal service consultant to do the hard work. If you want to minimize the risk of making unnecessary mistakes, Permitindo is the right consultant for your consideration and will guide you throughout the whole process. Feel free to contact us by filling this form, or sending an email to anita@permitindo.com. Our team will get back to you shortly.

Photo by Usman Yousaf

Any questions? Contact us!