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Tips on Vessel Sale And Purchase in Indonesia
Setyawati Fitrianggraeni, Agnes Wulandari, Marcel Raharja
INTRODUCTION
Indonesia, as a large archipelago, still relies heavily on ships as transportation and distribution of goods. Marine vessels have important roles in the economy and business in Indonesia. However, there is still minimal information regarding the stages and process of the sale and purchase of ships under Indonesian law. The stages of buying and selling vessels in Indonesia should be transparent to minimize the risks arising both from the object of the transaction, namely the vessel, as well as the risk of missing the procedures that need to be completed in buying and selling vessels(rendering a transfer of ownership ineffective). This article will explain in general the stages that are usually carried out in buying and selling ships in Indonesia, these stages are as follows:
Tip/Step 1
VESSEL SALE AND PURCHASE DUE DILIGENCE
Due diligence is a thorough examination of a transaction object (in this case a vessel) to obtain information or material facts to enable a description of the condition of a transaction object and minimize the risks inherent in the transaction object. There are several aspects that need to be checked regarding the background of the vessel to minimize the risks. Some of the aspects that must be checked are as follows:
- Identity of the Previous Ship Owner (Seller)
- Proof of Ship Ownership and Ship Designation
- Ship Free of Mortgage and Encumbrance
The deed of transfer of ship name can only be made if according to the records in the master list, the ship is not encumbered by mortgages and/or other guarantees and is free from all forms of encumbrances.[1]
- The absence of a court decision that has permanent legal force on a lawsuit from a third party against property rights to the ship.[2]
- For vessels that have been registered abroad, the following documents should be requested as reference:
- Proof of receipt of money / receipt / bill of sale legalized by a Notary who witnessed the signing of the bill of sale or an authorized Government Official from the flag country of origin of the ship.
- The protocol of delivery and acceptance of the vessel.
- Certificate of removal from the ship register provided by the flag state of origin of the ship.
In purchasing a vessel, due diligence is needed to examine and minimize the risk of the vessel to be purchased. Therefore, the matters mentioned above are some of the aspects that need to be checked before purchasing a vessel.
Tip/Step 2
STAGES OF THE VESSEL PURCHASE AND TRANSFER PROCESS
After the Vessel Due Diligence has been completed, the ship sale stage begins which consists of two sub-stages, namely:
- Signing of the deed of sale and purchase before a Notary
The sale and purchase of a vessel is carried out by an authentic deed made and signed by the seller and buyer in the presence of a notary.
- The name transfer application process is carried out online through the Electronic Ship Registration System (“SPKE”), namely through the website https://kapal.dephub.go.id
After the sale and purchase is made, online registration is carried out to transfer the name of ownership of the purchased vessel.
The period and time taken to process name transfer will depend on the completeness of the documents provided by the ship owner.
Tip/Step 3
TRANSFER OF TITLE
Transfer of vessel title is the transfer of ownership from the seller of the vessel to the buyer of the vessel after the transfer process. For every transfer of title to a registered vessel, the new title holder must submit an application for the deed and recording of the transfer of the vessel’s name to the Registrar and Recorder of Vessels[3] at the place where the vessel is registered.[4] The application for transfer of name must be completed with:[5]
- Evidence of transfer of ownership rights over the ship
Evidence of transfer of ownership rights over the ship is in the form of a deed of sale and purchase made before a notary.[6] The transfer of the ship’s name is carried out by the Registrar and Recorder by making a deed of transfer of the ship’s name and recorded in the master register of the ship concerned.[7]
- The identity of the owner is in the form of an identity card for individuals and the articles of association of the company for Indonesian Legal Entities.
- Taxpayer Identification Number (NPWP).
- Letter of measurement, in the event that the vessel has obtained a new letter of measurement
- Grosse deed of ship registration or grosee deed of ship renaming.
CONCLUSION
A sale and purchase of a ship in Indonesia must follow procedures in accordance with existing regulations to ensure compliance and the continued development of the shipping industry in Indonesia. In general, the sale and purchase of ships is conducted in 3 stages, namely:
- Conduct of the Due Diligence on the Vessel to be purchased;
- The Vessel Purchase And Transfer Process;
- The Transfer of vessel title (ownership of the vessel).
REFERENCES
Law Number 17 of 2008 on Shipping as amended by Government Regulation in Lieu of Law of the Republic of Indonesia Number 2 Year 2022 (“Law 17/2008”).
Government Regulation Number 51 of 2002 concerning Shipping as amended by Government Regulation of the Republic of Indonesia Number 31 of 2022 (“GR 31/2022”).
Minister of Transportation Regulation Number PM 39 of 2017 concerning Ship Registration and Nationality (“MOTR 39/2017”).
Minister of Trade Regulation of the Republic of Indonesia No. 20 of 2021 on Import Policy and Regulation as amended by Regulation of the Minister of Trade of the Republic of Indonesia No. 25 of 2022 (“MOT 25/2022”).
[1] Article 18 paragraph (5) of MOTR 39/2017
[2] Article 8 of MOTR 39/2017
[3] Article 1 number 2 of MOTR 39/2017 states that “The Registrar and Recorder of Ship Names is a Government Official authorized to carry out ship registration in accordance with the provisions of laws and regulations.”
[4] Article 99 of GR 31/2021
[5] Article 18 paragraph (2) of MOTR 39/2017
[6] Article 18 paragraph (3) letter a of MOTR 39/2017
[7] Article 18 paragraph (4) of MOTR 39/2017
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