DSI's Centralised Export Regime: The Gateway For Exporters Of Affected Natural Resources And Smelter Owners

I. Executive Summary

Two separate regimes now govern Indonesian natural resource exports and must be checked on every shipment: the DSI/Export SoE export monopoly under GR 24/2026, which currently covers coal, crude palm oil and ferro-alloy and channels their export exclusively through Export SoE; and DHE SDA, the foreign exchange retention regime that requires most mining, plantation, forestry and fisheries exporters to keep 100% of export proceeds onshore for 12 months (30% for 3 months for oil and gas, or under a qualifying bilateral trade arrangement). Nickel intermediates and refined products are not yet DSI-designated but remain fully subject to DHE SDA.

For smelter owners, DSI/DHE SDA sits on top of separate, pre-existing constraints: the 2020 ban on unprocessed nickel ore exports and the tightened 2026 RKAB mining quota (down roughly 30 to 34% from 2025), plus reported ferronickel-specific export licensing. Intra-group export sales to a foreign parent receive no carve-out from either regime.

For financing, the shift to onshore Special DHE SDA Accounts breaks the conventional offshore proceeds waterfall; account control agreements, security assignments and hedging arrangements need to be re-anchored to the SoE Bank structure, though dividend payments and capital-goods debt service remain permitted uses during retention. For tax, DHE SDA placement income remains eligible for withholding tax facilities, though current rates should be confirmed against MoF regulation. For contracts, offtake, marketing and shareholders' agreements signed before 1 June 2026 face mandatory Export SoE evaluation and should be re-papered with price re-openers and change-of-law clauses addressing both regimes.

II. Introduction

Since mid-2023, Indonesia has been rebuilding the legal architecture governing how natural resource exporters bring their export proceeds home, and since 2026, who is permitted to sell certain commodities abroad at all. Two regimes now sit side by side and interact constantly in practice. The first is the export monopoly regime under Government Regulation (“GR”) No. 24 of 2026 on the Governance of Strategic Natural Resource Commodity Exports ("GR 24/2026"), which channels the export of designated "Strategic Natural Resource Commodities" through a state-owned export enterprise (Badan Usaha Milik Negara (“BUMN”) Ekspor, or "Export SoE") — the entity commonly referred to in the market as Danantara Sumberdaya Indonesia, or "DSI". The second is the foreign exchange retention regime known as “DHE SDA” (Devisa Hasil Ekspor Sumber Daya Alam, or foreign exchange proceeds from natural resource exports), which has been amended three times since 2023 and currently requires most natural resource exporters to keep the bulk of their export proceeds onshore for extended periods.

This guide is addressed to: (i) exporters of coal, crude palm oil ("CPO"), ferro-alloy and other resources that may be designated as Strategic Natural Resource Commodities; (ii) mining, plantation, forestry and fisheries exporters generally, who are subject to DHE SDA regardless of whether their commodity is caught by the DSI monopoly; and (iii) smelter

owners in the nickel value chain, who face a distinct overlay of downstreaming (hilirisasi) obligations and export controls on top of both regimes.

We deal with the two regimes in turn, then work through the overlays that matter most to smelter owners, enforcement architecture, financing implications, tax implications and contractual re-papering.

III. General DHE SDA and DSI Framework: How the Two Regimes Relate

The two regimes are analytically separate, with different legal bases, regulators, and points of intervention, even though, for many exporters, they now apply simultaneously to the same shipment.

DHE SDA is a foreign exchange retention regime applicable to exporters: it does not restrict who may export or to whom, but restricts what an exporter must do with the export proceeds once earned. It operates as a qualification on Article 4 of Law No. 24 of 1999 on Foreign Exchange Traffic and the Exchange Rate System, as amended by Law No. 1 of 2026 on Criminal Adjustment (“Law 1/2026”) (“Foreign Exchange Law”), under which every Indonesian resident may otherwise freely own and use foreign exchange. DHE SDA has existed since 2019 in various forms, predating the DSI monopoly, and was strengthened by GR No. 36 of 2023 on Foreign Exchange Proceeds from Export of Natural Resource Business, Management and/or Processing Activities (“GR 36/2023”), which has since undergone three amendments:

1. GR 8 of 2025 on Amendment to Regulation of GR 36/2023 (“GR 8/2025”);
2. GR 2 of 2026 on The Second Amendment to Regulation of GR 36/2023 (“GR 2/2026”); and
3. GR 21 of 2026 on the Third Amendment to Regulation of GR 36/2023 (“GR 21/2026”).

(together, the “DHE SDA Regulations”)

The DSI/Export SoE monopoly is a market-structure regime. Article 3(1) of GR 24/2026 restricts which entity may act as exporter of the designated Strategic Natural Resource Commodities, whether as owner or sole intermediary, to Export SoE, and Article 3(2) of GR 24/2026 gives Export SoE the authority to set the sale price. This is a new regime: GR 24/2026 was only enacted in 2026, and its scope so far is narrower than the full universe of resources covered by DHE SDA.

For the initial tranche, the Strategic Natural Resource Commodities designated under Article 2(3) of GR 24/2026 are coal, crude palm oil and ferro-alloy (an iron alloy product closely associated with the nickel value chain), with further commodities to be added in stages pursuant to Article 2(4) to (6) of GR 24/2026. Every one of these initial three commodities also falls within DHE SDA's sectoral scope under Article 5(2) of GR 36/2023. Consequently, an exporter of coal, CPO or ferro-alloy from 2026 onward must clear two separate compliance gates on the same transaction: (1) the export itself must go through, or be authorised by, Export SoE under GR 24/2026; and (2) the resulting export proceeds must be brought onshore and retained under the DHE SDA rules described in Section V below. A nickel exporter whose product is not yet within the GR 24/2026 designated list is, for now, only subject to DHE SDA, but should watch for incremental designations under the staged mechanism in Article 2(4) to (6).

IV. The New DSI/Export SoE Framework Under GR 24/2026

Having been effective since 1 June 2026, GR 24/2026 has several key points worth noting for exporters dealing with business operations involving Strategic Natural Resources Commodity:

1. Legal Basis and Rationale

GR 24/2026 is grounded in Article 33 of the 1945 Constitution, which enacts state control of natural resources for the greatest welfare of the people, and Article 38(1) of the Trade Law (Law No. 7 of 2014, as amended by Law Number 6 of 2023), which empowers the Government to set export policy and controls. The preamble recites domestic supply stability, economic resilience, value-added and sustainable development as the policy basis for the regime.

2. General Rules of the New Export SoE Mechanism

1. Role of Export SoE
   
   Article 3(1) and (2) of GR 24/2026 give Export SoE a critical role in managing a designated Strategic Natural Resource Commodity as sole exporter, whether acting as owner of the goods or as the sole intermediary for the transaction, and Export SoE determines the sale price while carrying out the export, not the underlying producer. Export SoE is designated in accordance with BUMN laws and regulations (Article 3(3) of GR 24/2026). Under Article 3(4), Export SoE may also charge a margin, provided it remains within a "reasonable level" (tingkat kewajaran) consistent with applicable law — a standard not further quantified in the regulation and to be watched through Ministry of Trade or sectoral implementing rules.
   
   Export SoE therefore holds specific authority to monopolise the management and use of Strategic Natural Resource Commodities. Business actors operating in the sector should assess whether their activities, transactions and supply arrangements fall within the scope of that authority, and ensure that any applicable requirements for the management, utilisation, procurement or distribution of such commodities are complied with.
   
   
2. Export Controls Beyond Pricing
   
   Article 4(1) of GR 24/2026 allows governance of Strategic Natural Resource Commodity exports to also proceed through export controls (including technical verification or tracing), regulation of export transport and insurance, and other mechanisms under applicable law.
   
   
3. Exemption for Producers With Government Contracts
   
   Article 4(2) and (3) of GR 24/2026 allow Export SoE’s monopoly over a Strategic Natural Resource Commodity to be exempted for business actors holding a contract or agreement with the Government that contains, at minimum, provisions on investment, divestment, and domestic processing and/or refining — an exemption clearly aimed at existing mining Contracts of Work, Coal Concession Agreements and similar government-contract holders in the resources sector who have committed to domestic downstream processing. The exemption is decided at the same type of inter-ministerial coordination meeting used for commodity designation. This exemption channel matters for smelter owners and integrated resource groups, as it is the primary route by which an existing offtake or supply structure might continue to bypass the monopoly, but it requires an affirmative government decision and does not apply automatically.

3. Pricing Benchmark Methodology

GR 24/2026 itself does not prescribe a pricing formula for Export SoE; Article 3(2) simply vests price-setting authority in Export SoE, subject to the "reasonable margin" standard in Article 3(4). Article 5 leaves further technical rules on export governance mechanics to sectoral ministers or agency heads. Exporters should expect the benchmark methodology to emerge through Export SoE's own commercial practice and/or Ministry of Trade implementing regulations, and should build flexibility into pricing clauses in offtake and supply agreements pending that clarity (see Section XI).

4. Transitional Timeline and Impacts to Existing Contracts

Article 7(a) of GR 24/2026 allows Strategic Natural Resource Commodity exports to continue outside Export SoE until 31 December 2026 at the latest. Within three months of the regulation's effective date, an evaluation coordination meeting (chaired by the coordinating minister for economic affairs) will assess progress under Article 7(b), and under Article 7(c), that minister may set an earlier cut-off date than 31 December 2026 based on that evaluation. After the applicable cut-off, only Export SoE may carry out the export, and where the transfer to Export SoE has already occurred fully before the cut-off, the post-cut-off regime applies immediately to that trade flow (Article 7(d) and

(e) of GR 24/2026).

Any existing sales contract signed before 1 June 2026 and still in effect will be evaluated by Export SoE once the regulation takes effect (Article 8 of GR 24/2026). This means long-term offtake and supply agreements executed before that date are not grandfathered outright; they are subject to review, which is a direct trigger for the re-papering exercise addressed in Section XI.

V. Regulatory Chain of DHE SDA: The Foreign Exchange Retention Regime

1. GR 36/2023: The Initial 3-Month Retention of 30% Export Proceeds

GR 36/2023 took effect on 1 August 2023. Article 5(1) and (2) required exporters to bring DHE SDA — export foreign exchange proceeds from natural resource business, management and/or processing activity — into the Indonesian financial system, where the underlying export originates from the mining, plantation, forestry or fisheries sectors. Article 6(2) extends the obligation to place DHE SDA into a Special DHE SDA Account to exporters whose export value on the customs export declaration ("PPE") is at least USD 250,000 or its equivalent, with placement due no later than the end of the third month following the month the PPE was registered (Article 6(3)).

Under Article 7(1) and (2) of GR 36/2023, DHE SDA placed in the Special Account had to remain retained at not less than 30% within the Indonesian financial system for a minimum period of 3 months from the date of placement, placed into one of several qualifying instruments (Article 8(1)) — see Section VI below for the current instrument list. Income from DHE SDA placements can be granted tax facilities under applicable tax law (Article 10(1)).

Non-compliance with these DHE SDA obligations — whether failure to bring DHE SDA into the Special Account, failure to retain the minimum 30% for 3 months, or failure to establish or relocate an escrow account as required — is sanctioned administratively by suspension of export services (Article 16(1) and (2) of GR 36/2023).

2. GR 8/2025: First Amendment Separating Retention Requirements for Oil and Gas Sector

GR 8/2025 was enacted on 17 February 2025 and took effect 1 March 2025. It amended Article 7 and related provisions of GR 36/2023 as follows:

a. Specific Retention Period and Amount for Oil and Gas Sector

GR 8/2025 differentiates the retention period and amount for the oil and gas sector from other sectors. The amended Article 7(1) and (2) now require DHE SDA placed in the Special Account to remain retained at 100% within the Indonesian financial system for a minimum period of 12 months from placement. Under the amended Article 7(2a), DHE SDA originating from the oil and gas mining sub-sector is carved out of this rule and remains at the old 30% minimum for at least 3 months.

b. Expansion of Applicable Qualifying Placement Instruments

The amended Article 8(1), as introduced by GR 8/2025, also widens the qualifying placement instruments to include the Special DHE SDA Account at LPEI or a foreign-currency bank, banking instruments, financial instruments issued by LPEI, and instruments issued by BI.

c. Widened Utilisation of Retained DHE SDA

A new Article 11A, inserted by GR 8/2025, widened permitted uses of retained DHE SDA while still in the Special Account, including conversion to Rupiah (subject to BI rules), payment of tax and other government obligations in foreign currency, dividend payments in foreign currency, payment for goods and services procurement in foreign currency where not (fully) available domestically, and repayment of loans for capital goods procurement in foreign currency. The voluntary-placement chapter previously found at Article 17 of GR 36/2023 (for exporters below the USD 250,000 threshold) was deleted by GR 8/2025.

As for the transition, pursuant to Article II(1) of GR 8/2025, the new retention rule applies to any DHE SDA placed into the Special Account after GR 8/2025 took effect, regardless of whether the underlying PPE predates or postdates the regulation.

3. GR 2/2026: Second Amendment Introducing Institutional Refinements and Reformulated Mining Carve-Out

GR 2/2026 took effect on 26 February 2026 pursuant to its Article II(3). This second amendment introduces new provisions, as follows:

a. SoE Bank as the New DHE SDA Special Account

The amended Article 6(1) of GR 36/2023, as introduced by GR 2/2026, directs placement of DHE SDA in a Special Account specifically to a foreign-currency bank that is a State-owned Enterprise (Badan Usaha Milik Negara, or “SOE” or “BUMN”) ("SoE Bank"), narrowing the earlier LPEI-or-foreign-currency-bank formulation to channel placements through state banks specifically.

b. Article 18A: Bilateral and Reciprocal Trade Arrangements

A new Article 18A, inserted by GR 2/2026, deals with implementation of bilateral trade agreements or other trade understandings. Article 18A(1)(a) to (c) requires DHE SDA from the mining sector under such an arrangement to still be retained at a minimum 30% for a minimum 3 months, but allows placement and Rupiah conversion at a (non-state-owned) foreign-currency bank — a broader carve-out than the oil-and-gas-only version under GR 8/2025, extending to mining generally where a bilateral trade agreement applies.

Placement income continues to be eligible for tax facilities under applicable tax law, and compliant exporters may be designated "reputable exporters" under trade regulations (see Section VI.6).

4. GR 21/2026: Third Amendment, Widened Bilateral/Reciprocal Trade Carve-Out

GR 21/2026 was enacted 6 May 2026 and took effect 1 June 2026. It is a narrow amendment focused solely on Article 18A. The reformulated Article 18A(1) and (2) now applies specifically to bilateral trade agreements concerning reciprocal trade, restating the same substantive carve-out: DHE SDA from the mining sector under such an agreement must be retained at a minimum 30% for a minimum 3 months, placed and converted to Rupiah at a foreign-currency bank designated by Bank Indonesia. Under Article II(1), PPE registered from 1 June 2026 is subject to this version of the rule; PPE registered before that date but still under Bank Indonesia and/or OJK supervision review is deemed to have satisfied its obligations in full.

5. What the DHE SDA Amendments Mean for Strategic Natural Resource Commodities

Coal and CPO exporters — now also DSI-monopoly commodities — sit squarely within the general 100%/12-month rule unless a reciprocal trade agreement carve-out applies to their buyer jurisdiction. Ferro-alloy, closely tied to nickel processing, should be assessed against the same rule.

Across every version of the regulation, the DHE SDA sectors in scope, the USD 250,000 per-PPE threshold, and the placement deadline remain unchanged. Supervision responsibilities are split: Bank Indonesia supervises the placement

obligation while OJK supervises escrow account compliance (Article 13(2) and (3)), with results reported to the ministry responsible for state finance, which imposes and lifts administrative sanctions (Article 14(1) and (2)).

VI. Instruments and Yield

1. Qualifying Onshore Placement Instruments

Article 20(3) of BI Regulation No. 7 of 2023 on Foreign-Exchange Export Proceeds and Foreign-Exchange Import Payments, as amended by BI Regulation No. 5 of 2026 (“BI Reg. 7/2023”), allows exporters to place retained DHE SDA into:

1. the Special DHE SDA Account itself, held in foreign currency at a SoE Bank;
2. a banking instrument in the form of a foreign-currency deposit at a SoE Bank;
3. a BI instrument in the form of a foreign-currency term deposit ("BI Term Deposit Valas DHE SDA");
4. BI foreign-currency securities and foreign-currency sukuk;
5. foreign-currency-denominated government bonds and/or government sharia securities (sovereign sukuk); and
6. any other instrument BI designates.

This is the regulatory basis for the market shorthand "BI Term Deposit Valas DHE SDA, special foreign-currency deposits, sovereign bonds, negotiable certificates of deposit", though the regulation itself does not separately name negotiable certificates of deposit as a distinct instrument category.

2. Use of Instruments as Collateral and Hedging Underlying

Article 20(4) of BI Reg. 7/2023 permits the exporter to use placement instruments as collateral for Rupiah credit from a bank. Under Article 20(5) and (6), the Special DHE SDA Account can serve as the underlying for a foreign exchange swap between the exporter and SoE Bank, and SoE Bank may in turn use the placement as underlying for a hedging swap with Bank Indonesia.

3. Incentives for Compliant Placement

Article 21(1) of BI Reg. 7/2023 allows Bank Indonesia to grant incentives on DHE SDA placed in the Special Account and then placed into a Bank Indonesia foreign-currency term deposit or other designated instrument. Under Article 21(2), funds placed in the BI term deposit are also excluded from the exporter bank's third-party-funds base for minimum reserve requirement, macroprudential intermediation ratio, and sharia macroprudential intermediation ratio calculations.

4. Rupiah Conversion Cap

BI Reg. 7/2023 also regulates the conversion cap applicable to an exporter seeking to convert its foreign exchange proceeds to Rupiah. Under Article 22A(1) of BI Reg. 7/2023, for DHE SDA outside the oil-and-gas mining sub-sector, the exporter may convert DHE SDA to Rupiah via cash transactions (same-day, next-day, or two-day spot settlement) or forward transactions at a SoE Bank, subject to a maximum conversion percentage set under the DHE SDA regulations, calculated under Article

22A(3) on the accumulated DHE SDA placed into the Special Account in the month of placement. This cap traces back to Article 11A(1a) of GR 36/2023, as introduced by GR 2/2026 (the 50% Rupiah-conversion ceiling), and directly limits how quickly an exporter group can access Rupiah liquidity from its retained proceeds. Under Article 22A(4), non-compliance with the conversion cap is separately sanctioned administratively.

5. Yield Differential Versus Offshore Alternatives

Neither the DHE SDA Regulations nor BI Reg. 7/2023 prescribe or guarantee a specific yield on DHE SDA placements relative to offshore USD deposits; pricing is set commercially by the SoE Bank and Bank Indonesia's term deposit rate-setting. The material point for exporters and treasury teams is not the yield itself but the structural constraint: retained DHE SDA cannot leave the Indonesian financial system for 12 months (or 3 months under the mining/reciprocal-trade carve-out). The true cost of the regime should be assessed as the opportunity cost of that lock-up relative to an unrestricted offshore placement, net of the BI/SoE Bank incentive treatment and the tax facility discussed in point 6 below, not simply as a headline interest-rate comparison.

6. Tax Incentives for DHE SDA-Compliant Placements

Article 10(1) of GR 36/2023 has made income from qualifying DHE SDA placements eligible for tax facilities under prevailing tax regulations since the base GR 36/2023, and this eligibility has carried through GR 8/2025 and GR 2/2026 without substantive change to the enabling provision.Separately, pursuant to Article 10(2) of GR 36/2023, an exporter that places DHE SDA in the Special Account may also be designated a "reputable exporter" (eksportir bereputasi baik) under trade regulations — a status that can carry customs and trade-facilitation benefits distinct from the tax treatment of placement income.

VII. Smelter-Owner Specific Issues

This section addresses the overlay of issues specific to nickel-chain smelter owners, who sit at the intersection of DSI/DHE SDA and Indonesia's separate downstreaming (hilirisasi) architecture.

1. Nickel Is Not Yet in the DSI/GR 24/2026 Initial Tranche

As established in Section III, Article 2(3) of GR 24/2026 designates coal, crude palm oil and ferro-alloy as the initial Strategic Natural Resource Commodities. Nickel ore, nickel matte, Mixed Hydroxide Precipitate (“MHP”), High Pressure Acid Leaching (“HPAL”) intermediate, and refined nickel products are not included. Ferro-alloy is the closest adjacency to the nickel chain in the initial tranche, and depending on how "ferro-alloy" is technically defined in Minister of Trade implementing rules, certain nickel pig iron or ferronickel products could conceivably be captured, since GR 24/2026 itself does not define the term beyond the bare word. Smelter owners should treat DSI monopoly exposure for nickel matte, MHP, HPAL intermediate and refined-nickel products as a live regulatory risk to monitor, not a settled position, given the staged-designation mechanism under Article 2(4) to (6) of GR 24/2026.

2. DHE SDA Remains Applicable Regardless of DSI Monopoly Status

Irrespective of whether a given nickel product is caught by GR 24/2026, Article 5(2) of GR 36/2023 places nickel-chain exports within the mining sector for DHE SDA purposes. They are therefore subject to the general 100%/12-month retention rule, unless the narrower carve-outs (oil and gas, or a bilateral reciprocal trade arrangement specific to the buyer country) apply, which will rarely be the case for typical nickel intermediate or refined product sales. Smelter owners financing operations with reserve-based lending or pre-export finance facilities secured against export receivables should assume the 100%/12-month lock-up applies to essentially all of their USD export receivables above the USD 250,000 per-shipment threshold.

3. Intra-Group Exports to a Foreign Parent: No Carve-Out Identified

None of GR 24/2026, the DHE SDA Regulations, or BI Reg. 7/2023 contain an express carve-out for export sales that are, commercially, intra-group transfers to a foreign parent or affiliate. Article 1(6) and (7) of GR 36/2023 defines "Export" and "Exporter" by reference to the customs definition, without any reference to the buyer's corporate relationship to the seller, and Article 3(1) of GR 24/2026 applies the export monopoly to the export of a designated Strategic Natural Resource Commodity as such, again without a related-party exception. The only exemption mechanism identified in GR 24/2026 is the government-contract exemption under Article 4(2), available on the same terms to related-party and third-party sales alike. Smelter-owner groups structuring intra-group offtake to a foreign parent should plan on both regimes applying on the same basis as an arm's-length third-party export.

4. Interaction With the Nickel Ore Export Ban and the RKAB Quota System

Two distinct layers sit on top of DSI/DHE SDA for smelter owners, and both are separate from, and predate, the DSI/DHE SDA architecture.

a. Prohibition on Exporting Unprocessed Nickel Ore

Indonesia's ban on unprocessed nickel ore exports took effect in January 2020, driving rapid growth in domestic Rotary Kiln Electric Furnace (ferronickel/nickel pig iron) and, later, HPAL (MHP)¹ smelting capacity. This ban is a standing minerals and coal (minerba) export prohibition on raw ore, and it continues to apply independently of anything in GR 24/2026 or the DHE SDA regulations.

b. Annual Mining Work Plan and Budget Approval Mechanism

The annual mining work-plan-and-budget approval mechanism (Rencana Kerja dan Anggaran Biaya, or "RKAB") governs the volume of ore individual mining operations may extract each year. In 2025, the Government decided that RKAB approvals, previously issued for three-year periods, would revert to annual issuance starting in 2026, and separately imposed a moratorium on new licences for intermediate nickel smelters (producing ferronickel, nickel pig iron, nickel matte and MHP)² under GR No. 28 of 2025 on The Organization of Risk-Based Business Licensing (“GR 28/2025”), while allowing smelter projects already under construction to proceed.³ A formal supplementary RKAB quota application window ran from 1 to 31 July 2026, allowing miners to apply for additional allocation above the original ceiling.⁴ For 2026, the approved national RKAB quota for nickel ore was set at approximately 260 to 270 million wet metric tonnes, a reduction of roughly 30 to 34% from the 375 to 379 million wet metric tonnes approved in 2025, reported as aimed at rebalancing the value chain towards higher-value downstream processing.⁵ This has caused significant reported operational disruption, including a major nickel operation halting ore production entirely after exhausting its 2026 RKAB allocation before year-end.⁶

A further export-control layer was reported to have been added in July 2026 under a regulation described as Minister of Finance (“MoF”) Decree No. 32/MK/BC/2026 of 2026 on The List of Goods Restricted for Export Pursuant to the Minister of Trade Regulation No. 17 of 2026 on Policies and Regulation on Export of Strategic Ferro Alloy Natural Resource Commodities (“MoF Decree 32/2026”), which reportedly imposes export licensing requirements on ferronickel products containing at least 4% nickel content⁷. This operates as a downstream export control layered on top of the upstream RKAB mining allocation, and is the kind of mechanism a DSI-style monopoly or a DHE SDA sanction could compound if a smelter group's ferronickel product were later designated under GR 24/2026 or found non-compliant with DHE SDA.

The RKAB quota mechanism constrains ore input to smelters, independently of and prior to any DSI/DHE SDA constraint on export proceeds. A smelter group should model several independent layers stacking on the same nickel value chain: (i) RKAB-constrained ore supply and the associated benchmark mineral price upstream; (ii) potential DSI/GR 24/2026 monopoly exposure if the specific product is later designated; (iii) DHE SDA's 100%/12-month retention on export proceeds from the eventual sale; and (iv) the reported ferronickel-specific export licensing layer.

VIII. Circumvention and Enforcement

1. Institutional Coordination

The DHE SDA and DSI regimes are enforced through separate but coordinating channels. For DHE SDA, Bank Indonesia supervises the placement obligation and OJK supervises escrow account compliance (Article 13(2) and (3) of GR 36/2023); both report to the Ministry of Finance, which imposes and lifts administrative sanctions (Article 14(1) and (2)). Article 15 further provides that this supervision runs through an integrated information system shared by the Ministry of Finance, BI, OJK and other relevant agencies.

For DSI under GR 24/2026, Article 6 of GR 24/2026 provides that supervision of Strategic Natural Resource Commodity export governance is carried out by each relevant minister or head of non-ministerial government agency according to their respective authority. In practice, sector regulators — the Ministry of Trade for export administration, the Ministry of Energy and Mineral Resources for mining-sector commodities, the Ministry of Agriculture for CPO — retain primary enforcement responsibility, coordinated at the same inter-ministerial level used for commodity designation and exemption decisions.

2. The Sanction Mechanism

DHE SDA non-compliance carries a single formal administrative sanction across every version of the regulation: under Article 16(1) of GR 36/2023 (as amended), suspension of export services (penangguhan atas pelayanan Ekspor), triggered by failure to bring DHE SDA into the Special Account, failure to meet the applicable retention percentage or period, or failure to establish or relocate a required escrow account, and separately, under Article 22A(4) of BI Reg. 7/2023, failure to observe the Rupiah-conversion cap. Under Article 16(2), this sanction is implemented in accordance with customs regulations, meaning non-compliant exporters can find their export customs clearance blocked — a severe and immediate commercial consequence distinct from a fine.

GR 24/2026 does not prescribe a sanctions regime for non-compliant exporters attempting to bypass Export SoE. Article 5 of GR 24/2026 leaves enforcement mechanics to sectoral implementing regulations, with each minister or non-ministerial agency head issuing further rules within their authority, including supervision under Article 6. Practically, since Export SoE is the only lawful export channel for a designated commodity (absent the government-contract exemption), an exporter attempting to export outside that channel would likely fall foul of ordinary trade and customs licensing requirements administered by the Ministry of Trade, rather than a bespoke GR 24/2026 penalty clause.

3. Interaction With Corporate Criminal Liability Under Law 1/2026

Law 1/2026 is a technical adjustment law, enacted 2 January 2026, that recalibrates criminal penalties across Indonesia's statute book to align with Law No. 1 of 2023 on Criminal Law (“New Criminal Code”), which was enacted 2 January 2023. It is not a free-standing new corporate criminal liability regime, but an implementing and adjustment law for the New Criminal Code, which itself contains the corporate criminal liability framework.

a. Corporate Liability Mechanics

A corporation (Korporasi) is a subject of criminal offences, alongside its management. Article 48 of the New Criminal Code provides that corporate criminal offences occur where committed by management holding a functional position in the corporate structure, or by a person acting for and on behalf of, or in the interest of, the corporation, within the corporation's scope of business. Further, under Article 49 of the New Criminal Code, as it stands after Law 1/2026's adjustments, liability for a corporate offence is imposed on the corporation itself, and may also be imposed on management holding a functional position, the person giving the order, the person in control, and/or the beneficial owner of the corporation.

Article II of Law 1/2026 recalibrates the fines applicable to corporations for offences outside the Criminal Code that previously carried a fixed fine: category VIII (the highest) where committed for financial gain, category V where not. This matters for DHE SDA and DSI purposes because, while neither regulation itself imposes a criminal penalty (their sanction is administrative), the surrounding statutory framework — trade law offences, customs offences under Law Number 10 of 1995 as amended by Law Number 17 of 2006, and the foreign exchange traffic law itself — can carry criminal exposure now assessed against these recalibrated fine categories, where non-compliance escalates from an administrative breach into conduct also captured by those underlying offences (e.g., customs document fraud or deliberate circumvention of the export monopoly through false declarations).

Separately, pursuant to Article 3(2) of Foreign Exchange Law, violation of Bank Indonesia's exchange-rate-system implementing provisions is subject to a fine of at least Rp 250,000,000 — illustrating that the foreign exchange traffic statute underlying DHE SDA does carry its own, pre-existing, non-DHE-SDA-specific criminal fine exposure, now to be read alongside the Law 1/2026 recalibration framework where relevant provisions of that law are engaged.

b. Practical Implications for Compliance Teams

DHE SDA and DSI non-compliance, as drafted, sit primarily in the administrative-sanction lane (suspension of export services). The path to criminal and corporate criminal exposure runs through adjacent statutes (customs, trade, foreign exchange traffic, and potentially anti-money laundering if proceeds are deliberately routed to evade the retention obligation) rather than through a bespoke criminal offence created by the DHE SDA or DSI regulations themselves. Groups should map their DHE SDA and DSI compliance programme to also address these adjacent exposure points, since an aggressive circumvention structure could plausibly trigger customs or trade-law criminal liability layered with the corporate liability and recalibrated fine architecture described above.

IX. Financing Implications

1. Proceeds Waterfalls Now Sit Inside Special DHE SDA Accounts

The structural shift for offshore reserve-based lending and pre-export finance facilities secured against Indonesian natural resource export receivables is significant: under the amended Article 6(1) of GR 36/2023, export proceeds must now flow through a Special DHE SDA Account at a SoE Bank (or, under the bilateral/reciprocal-trade carve-out, a BI-designated foreign-currency bank) rather than an offshore collection account, and 100% of that DHE SDA must remain within the Indonesian financial system for a minimum of 12 months (or 30%/3 months under the applicable carve-out). The conventional pre-export finance and reserve-based lending structure — offshore collection account, offshore waterfall, direct lender control over receivables — is no longer available in its classic form for in-scope natural resource exports.

2. Account Control Agreements and Security Assignments May Need Revision

Because proceeds are statutorily directed to a Special DHE SDA Account rather than a lender-controlled offshore account, account control agreements and security assignments drafted on the assumption of offshore proceeds collection will not achieve their intended security perfection or control mechanics. Lenders will instead need to take security over the Special DHE SDA Account itself, recognising that under Article 20(4) of BI Reg. 7/2023 the placement instrument can be used as collateral for Rupiah credit from a bank. Careful drafting is also needed around the permitted-use carve-outs in Article 11A of GR 36/2023, since DHE SDA in the Special Account can be used, even during retention, for Rupiah conversion (within the cap), tax and government payments, dividend payments, procurement of goods and services in foreign currency, and repayment of loans for capital goods procurement in foreign currency, meaning, debt service on qualifying capital-goods financing can, in principle, be paid from the Special Account without breaching the retention obligation, unlike general working-capital or acquisition debt. Waterfall priority mechanics will need revisiting entirely, since the primary proceeds account now sits onshore rather than with the lender's own security agent.

3. Dividend Blocks and Equity Cash Flow

Article 11A(1)(c) of GR 36/2023, as introduced by GR 8/2025, expressly permits dividend payments in foreign currency as a use of DHE SDA even during the retention period, so a lender-imposed dividend block (a standard reserve-based lending or pre-export finance covenant) remains structurally compatible with DHE SDA. The block must, however, be drafted with express reference to this permitted-use carve-out so it is clear the borrower group can still service permitted dividend flows without triggering a DHE SDA breach, while the lender's block operates as a contractual, not statutory, restriction layered on top.

4. Foreign Exchange Hedging Arrangements

Article 20(5) and (6) of BI Reg. 7/2023 allow the Special DHE SDA Account and other placement instruments to be used as the underlying for foreign exchange swap transactions between the exporter and its SoE Bank, and allow SoE Bank to in turn use the placement as underlying for a hedging swap with BI, supported by a statement letter and, for the BI leg, documentary evidence. This is a meaningful point for treasury and hedging counsel: the retention obligation does not preclude structured foreign exchange hedging referencing the retained balances; it channels that hedging through the SoE Bank and BI ecosystem rather than an offshore hedge counterparty. Financing documents and hedging agreements should be reviewed to ensure hedge counterparty arrangements and any cross-default or cross-acceleration provisions accommodate this onshore-channelled hedging structure, rather than assuming a conventional offshore hedge book against export receivables.

5. Practical Checklist for Financing Exporters and Smelter Projects

In light of the recent development, parties financing exporters and smelter projects subject to the Special DHE SDA Account regime should:

1. Re-map the proceeds waterfall against the Special DHE SDA Account structure and the Article 11A of GR 36/2023 permitted-use list;
2. Confirm whether the borrower's export mix triggers the general 100%/12-month rule, the oil-and-gas carve-out, or the bilateral/reciprocal-trade carve-out (with a live check on which countries currently qualify);
3. Revise account control agreements and security assignments to reflect the SoE Bank or BI-designated bank as account holder, and confirm with local security and perfection counsel whether a security interest over the placement instrument itself (rather than expected offshore proceeds) is achievable and enforceable under Indonesian law, since the mechanics of granting security over a Special DHE SDA Account were not detailed in the regulations reviewed; and
4. Confirm hedging counterparty structuring accommodates the SoE Bank and BI swap-underlying mechanism. For DSI-monopoly-affected commodities (coal, CPO, ferro-alloy), separately confirm that Export SoE's pricing and margin practice does not create a mismatch against fixed-price offtake commitments assumed in the original financing base case (see Section XI).

X. Tax Implications

1. DHE SDA-Linked Withholding Tax Reductions

Article 10(1) of GR 36/2023 has made income from qualifying DHE SDA placements eligible for tax facilities under prevailing tax law across every version of the regulation. The specific final withholding tax rates, and the sliding scale tied to tenor, are set by MoF regulation rather than in the DHE SDA regulations themselves. Because the retention tenor has changed materially (from 3 months under GR 36/2023 to 12 months under GR 8/2025 onward), any MoF rate schedule keyed to the old 3-month tenor should be checked to confirm it has been updated. Specific current rates have not been independently verified for this guide and should be confirmed against the applicable MoF regulation.

2. Tax Holiday Extensions Under BKPM Regulation 5/2025

Article 260(1) of BKPM Regulation Number 5 of 2025 ("BKPM Reg. 5/2025") operationalises the Online Single Submission system for corporate income tax reduction facility (tax holiday) applications, with substantive rates and eligibility governed by the Ministry of Finance's own tax holiday regulation, under which, as at 1 January 2025, the reduction starts at 50% and can extend up to 100%, for a minimum of five and a maximum of twenty years. For downstream investment in nickel, coal, and CPO, smelter and processing groups should confirm their current eligibility under the applicable MoF regulation in force.

3. Reduced Paid-Up Capital Threshold and Its Relevance to Smelter/Exporter Group Structuring

Article 26(6) of BKPM Reg. 5/2025 reduced the PT PMA paid-up and minimum authorised capital requirement to at least Rp 2,500,000,000 per business classification code per location — relevant where a smelter group is establishing or restructuring downstream processing subsidiaries to access tax holiday or tax allowance facilities.

4. Offshore-Financing Thin Capitalisation

None of the DHE SDA or DSI regulations addresses thin capitalisation directly; this is governed by Indonesia's general debt-to-equity ratio rules under income tax regulations. The DHE SDA overlay is indirect but real: because retained DHE SDA can service debt for capital-goods procurement but not general working-capital debt, groups relying heavily on offshore shareholder or related-party debt to fund operations may find it harder to service that debt from onshore-retained proceeds during the retention window — a planning point to run past tax counsel.

XI. Contractual Re-Papering

The combined effect of GR 24/2026 and the DHE SDA retention regime requires active review of the following document categories.

1. Long-Term Offtake and Supply Agreements

a. Mandatory-Purchase and Exclusivity Clauses

Where a DSI-monopoly commodity (coal, CPO, ferro-alloy, and any future designation) is subject to an existing offtake agreement, that agreement now sits in tension with Export SoE's exclusive right to export the commodity under Article 3(1) of GR 24/2026, whether as owner or sole intermediary. Article 8 of GR 24/2026 further provides that existing sales contracts signed before 1 June 2026 and still in effect are subject to evaluation by Export SoE. Offtake agreements should be reviewed now, not after that evaluation occurs, to identify whether the producer counterparty can rely on the government-contract exemption under Article 4(2) (Section IV.2.c) or must restructure the sale to route through Export SoE.

b. Price Adjustment Mechanisms

Given that, under Article 3(2) of GR 24/2026, Export SoE determines the sale price where it exports the commodity, and the underlying pricing benchmark methodology is not yet settled in public regulation (Section IV.3), offtake and supply agreements should include a price re-opener or benchmark-substitution mechanism tied expressly to the Export SoE-determined price, rather than a fixed historical benchmark that may no longer be achievable once Export SoE's pricing practice is confirmed.

c. Force Majeure and Change-of-Law Clauses

Existing force majeure definitions should be reviewed to confirm they capture a change in export mechanism mandated by government regulation (that is, inability to perform an existing delivery obligation because export must now route through Export SoE, or because DHE SDA retention delays access to sale proceeds needed to fund the next production cycle). A dedicated change-of-law clause addressing GR 24/2026 and DHE SDA-driven cost and timing impacts (rather than relying on a generic force majeure definition) is the more robust drafting approach, given these are foreseeable, already-enacted regulatory changes rather than unforeseeable events.

2. Marketing Agreements

Marketing agreements that authorise a third-party marketer or trading arm to sell a DSI-monopoly commodity on the producer's behalf will, for designated commodities, need to be restructured around Export SoE's exclusive export and intermediary role under Article 3(1) of GR 24/2026. Consequently, the marketer's function may need to shift from seller of record to an advisory or logistics-support role feeding into the Export SoE channel, unless the government-contract exemption applies.

3. Shareholders' Agreements

Where a shareholders' agreement contemplates dividend distribution mechanics, capital call obligations, or deadlock and exit provisions premised on offshore cash availability, these should be revisited in light of the DHE SDA retention obligation's effect on the timing and location of distributable cash (Section IX.3 above). Board reserved matters relating to export contract approval should also be reviewed to ensure the board, and any foreign shareholder veto rights, properly capture decisions about Export SoE exemption applications, since securing or failing to secure that exemption is now a material strategic decision affecting the company's ability to export at all.

4. Suggested Re-Papering Priority Order

1. Offtake and supply agreements for coal, CPO and ferro-alloy signed before 1 June 2026, subject to the mandatory Export SoE evaluation under Article 8 of GR 24/2026.
2. Financing documents (account control agreements, security assignments, hedging agreements) for any natural resource exporter above the USD 250,000 per-shipment threshold (see Section IX).
3. Marketing and agency agreements for DSI-monopoly
4. Shareholders' agreements with dividend and cash-management provisions keyed to offshore liquidity.
5. Nickel-chain offtake and intra-group sale agreements, monitored for the risk of future DSI designation (see Section VII).

Footnotes

1. Petromindo, "Indonesia's nickel industry in 2025: From expansion to stabilization" (30 December 2025) https://www.petromindo.com/news/article/indonesia-s-nickel-industry-in-2025-from-expansion-to-stabilization.

2. Petromindo, "Indonesia's nickel industry in 2025: From expansion to stabilization" (30 December 2025), reporting the reversion to annual RKAB issuance from 2026 and the intermediate smelter moratorium under Government Regulation Number 28 of 2025.

3. Discovery Alert, "Indonesia RKAB Revision & Nickel Price Outlook 2026" (10 July 2026), reporting the 1–31 July 2026 supplementary quota application window under Ministerial Regulation Number 17 of 2025.

4. Discovery Alert, "Indonesia RKAB Revision & Nickel Price Outlook 2026" (10 July 2026); Shanghai Metals Market, "SMM Analysis: Indonesian Nickel Initial Outlook in 2026: Navigating the RKAB Quota Crunch."

5. Discovery Alert, "Indonesia RKAB Revision & Nickel Price Outlook 2026" (10 July 2026), reporting PT Weda Bay Nickel's production halt after exhausting its 2026 RKAB allocation.

6. Discovery Alert, "Indonesia RKAB Revision & Nickel Price Outlook 2026" (10 July 2026), reporting PT Weda Bay Nickel's production halt after exhausting its 2026 RKAB allocation.

7. Discovery Alert, "Indonesia RKAB Revision & Nickel Price Outlook 2026" (10 July 2026), reporting the introduction of Finance Minister Regulation Number 32 in July 2026.

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.