On 25 October 2024, the Ministry of Finance (“MoF”) enacted MoF Regulation No. 86 of 2024 on Auction Minutes (“MoFR 86/2024”), to effectively implement the provisions of Article 104 paragraph 2 of MoFR No. 122 of 2023 on Guideline for the Implementation of Auctions (“MoFR 122/2023”). This regulation came into effect as of 1 January 2025.
With the issuance of this regulation, MoF has set out various requirements on drafting the guidelines for auction minutes, which refer to the minutes of executed auctions drafted by auction officials to be used as authentic deeds that hold perfect evidentiary power (Article 1 paragraph 4 of MoFR 86/2024). An auction minutes is a mandatory document that summarizes the sale of objects during an auction (Article 2 of MoFR 86/2024).
In light of the above, we provide herein, the key takeaways of OJK Reg. 12/2024, particularly the (i) Procedure for Preparing Auction Minutes, (ii) Format of Auction Minutes, (iii) Internet Based Auction, (iv) Important Information, and (v) Concluding remarks.
Procedure for Preparing Auction Minutes: Auction minutes must be prepared by the auction officials of an auction involving multiple parties consisting of more than one Sellers, Buyers, or Debtors, as well as multiple goods.
However, the requirement for an auction official to prepare a single set of auction minutes does not apply under the following circumstances:
| No. | Type of Auction | Auction Minutes |
|---|---|---|
| 1. | The auction involves debtors of bankruptcy or mortgage proceedings | Separate auction minutes must be prepared for each of the debtors |
| 2. | The auction is a result of the execution of confiscated goods obtained through court proceedings | The minutes of auction must be made for each case |
| 3. | The auction is conducted of items confiscated due to tax obligation | The minutes of auction must be made for each of the debtors |
| 4. | The auction involves unclaimed “lost and found” goods, or goods no longer under ownership | The Minute of auction is made on a case-per-case basis |
| 5. | Scheduled Auction | The minutes of auction must be prepared daily. |
(Article 7 of MoFR 86/2024)
Mandatory use of Bahasa Indonesia and Format of Auction Minutes: Please be informed that for any Auction, the Minutes prepared by the auction officials or other relevant parties must be drafted in Bahasa Indonesia. The requirement to use Bahasa Indonesia as a standard format for the Auction Minutes is aligned with the mandatory provision that any document used for state documents must be prepared in Bahasa Indonesia as regulated under Law No. 24 of 2009 on National Flag, Language, Symbol, and National Anthem.
Further, the Auction Minutes must be divided into three main sections: (a) the head section, (b) the body section, and (c) the footer section (Article 4(2) of MoFR 86/2024). To facilitate understanding, we have prepared the following table illustrating the information that must be included in each section.
| No. | Section | Content |
|---|---|---|
| 1. | Heading |
(Article 5 (1) of MoFR 86/2024) |
| 2. | Body | According to Article 5(3) of MoFR 86/2024, the body section of the Auction Minutes must contain: (i) the buyer's identity, (ii) a statement specifying that the buyer is acting on behalf of another party if the buyer is a financial services company acting as a creditor, (iii) the auction price, and (iv) a description of the auctioned object. |
| 3. | Footer |
(Article 5(4) of MoFR 86/2024) |
New provision on Auction Minutes in Internet-Based Auctions: With the issuance of Ministry of Finance Regulation No. 122 of 2023 on Guideline for Auction Implementation (“MoEFR 122/2023”), Indonesia has officially recognized the concept of Non-Presence Internet-Based Auctions (“Internet-Based Auctions”).
During the implementation of an Internet-Based Auction, participants are not required to sign the Auction Minutes. Instead, the Auction Official will provide a note indicating that the auction was conducted using an Internet-Based Auction. This note will serve as the participant's signature, as stipulated under Article 11 of MoEFR 86/2024.
Important Information: Under MoFR 86/2024, any significant information that arises during the auction, particularly after its closing, must be recorded in the Auction Minutes along with a description of the information. The Auction Official must sign the entry to ensure its validity. According to Article 14 paragraphs (1) and (2) of MoFR 86/2024, such information includes that on:
- dissenting auction results;
- the buyer is in default;
- one or more buyers did not sign the Auction Minutes or were not physically present at its closing;
- issuance of replacement documents related to the Auction Minutes;
- one or more sellers did not sign the Auction Minutes or were not physically present at its closing;
- discovery of a court decision with permanent legal force related to the auction;
- a buyer is appointed by a financial services company as a creditor to purchase their own collateral; and/or
- correction of editorial errors in the Auction Minutes
Concluding Remarks: The new provisions under MoFR 86/2024 mandate specific details that must be included in the auction minutes to ensure greater transparency and accountability in auction proceedings. This regulation enables both buyers and sellers to carefully review the auction minutes at the conclusion of the sale, ensuring they accurately reflect the transaction and protect the interests of all parties involved. By setting clear standards for the preparation and content of auction minutes, MoFR 86/2024 reinforces the importance of accuracy, completeness, and compliance with procedural requirements. Ultimately, this regulation helps to build trust in the auction process and provides buyers and sellers with reliable documentation that holds legal evidentiary power.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
