AmCham Update Vol. 7 #078

Exemptions List from Export Earnings Retention Expands, Indonesia’s Oil Reserve Project Lacks Investors, Febrie Misses AGO Summons, Opening the Door for Dual Citizenship, Tobacco Interests Warn New Rules will hurt the Industry, US FBI Director Returns Looted Artifacts to Indonesia

Jul 24, 2026

Gov't to Expand Export Proceeds Exemptions for Major Economies

The government will expand exemptions under the Natural Resources Export Proceeds (DHE SDA) policy to include exporters trading with the US, China, Canada and Australia.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the exemptions would be granted due to Indonesia’s strong bilateral relations and trade agreements with these countries.

“Several countries will be exempted because we have extensive bilateral relations with them, including the United States, China, Australia, and Canada,” Airlangga told reporters on July 23. Airlangga said they are also members of the World Trade Organization (WTO).

Previously, only the United States was reportedly exempted. While implementation began in June, Airlangga said the government is reviewing the regulation and assessing its effectiveness.

Separately, Finance Minister Purbaya Yudhi Sadewa said the expansion was based on existing bilateral or multilateral agreements, as well as investment ties with Indonesia. “We confirmed which countries will be exempted. We also discussed which banks can receive the export earnings and the technical arrangements for the companies involved,” he said on July 23.

Starting June 1, Government Regulation 21/2026 on Foreign Exchange from Exports (DHE) of Natural Resources (SDA) requires exporters to retain 100 percent of their export proceeds domestically, with non-oil and gas exporters subject to a 12-month retention period and oil and gas exporters to a three-month retention period.

Under the exemption provisions set out in the regulation, eligible exporters are only required to retain 30 percent of mining export proceeds for three months, and the funds may be held outside state-owned banks. The government also set the maximum foreign currency conversion requirement at 50 percent.

Purbaya said the policy is expected to strengthen domestic liquidity and support the rupiah by keeping more export earnings in Indonesia. “The funds will flow back into the country, so the rupiah should strengthen further,” he said.

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Still No Takers to Invest in Indonesian Oil Reserve

Indonesia's plan to establish a 90-day strategic petroleum reserve during a time of war and disruption in the Middle East is having a tough time finding investors.

Experts warn that even if construction begins immediately, which is unlikely, the project could fall short of the government's ambitious three-year deadline.

With the 60-day interim ceasefire between the US and Iran seemingly in tatters, tensions and oil prices are rising. Iran has said a "devastating price" will be paid by countries hosting US military bases if US attacks on Iranian infrastructure continued.

Despite the renewed crisis, Indonesia’s strategic petroleum reserve apparently will not help. The energy ministry’s director general for oil and gas, Laode Sulaeman, has confirmed that the planned oil storage development in Sumatra has yet to break ground.

Speaking to reporters in Jakarta on July 21, Laode offered few details.

“There was a British-Indian investor who intended to collaborate on increasing reserves or stock for Pertamina. So, in addition to collaborating on strengthening Pertamina, they would also collaborate on strengthening its storage,” he explained, without elaborating.

When asked what challenges the government faced in attracting investors, Laode said: "Well… no one [investor] is really serious about doing it quickly.”

Yayan Satyakti, an energy economist at Padjadjaran University, told The Jakarta Post on July 18 that the pledge to increase national oil reserves from 25 days to 90 days mixes two very different tasks: constructing storage tanks and then buying and storing the oil.

“You can't rush tank construction, and you can't rush filling them. Neither happens overnight, and a crisis won't speed it up either,” said Yayan.

According to Yayan, meeting the goal of a 90-day reserve would require about two years to complete.

Yayan urged the government to set realistic expectations, such as a five-to-seven-year program, with an initial 40-to-50-day reserve achievable in about three years.

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Febrie Misses AGO Summons as Hotman Paris Withdraws as Counsel

Indonesia’s former top corruption prosecutor, Febrie Adriansyah, failed to appear for questioning by the Attorney General’s Office (AGO) on July 22, citing health reasons, as prosecutors opened a separate money laundering investigation into assets seized in connection with the case.

Febrie’s celebrity attorney, Hotman Paris Hutapea, subsequently withdrew from the legal team on July 23.

The AGO said Febrie would be summoned again on July 24 by a special nine-prosecutor investigative team formed after the National Police transferred three corruption and money laundering cases involving the former prosecutor earlier this month.

Meanwhile, President Prabowo Subianto has appointed senior prosecutor Kuntadi to replace Febrie as Deputy Attorney General for Special Crimes, according to State Secretary Prasetyo Hadi on July 22.

Kuntadi previously served as the AGO’s Director of Investigations from 2022 to 2024 and most recently headed its Asset Recovery Agency. He has worked closely with Febrie.

The latest investigation order, issued on July 20, focuses on alleged money laundering involving 74 kilograms of gold and foreign currency worth hundreds of billions of rupiah seized from a property in Sentul, West Java.

Febrie has denied wrongdoing, saying the seized assets can be legally accounted for.

The latest order brings the number of investigation orders involving Febrie to four. The earlier investigations concern alleged corruption and money laundering involving state-owned insurer Asabri, Krakatau Steel, and coal procurement for state-owned electricity company PLN. Febrie remains a suspect in the Asabri investigation, while businessman Don Ritto has also been named a suspect in a related money laundering case.

The AGO has invited representatives from the Corruption Eradication Commission (KPK), Judicial Commission, National Police, and Witness and Victim Protection Agency (LPSK) to observe the investigation amid continued scrutiny over the AGO investigating one of its own.

Separately, Hotman cited his ongoing recovery from spinal surgery in Singapore as the reason for his departure from the case.

Hotman had joined the defense only days earlier and subsequently apologized for invoking Subianto while defending Febrie during a July 17 press conference. He also apologized for insulting a journalist during the event, although the Indonesian Journalists Association (PWI) later filed a police report over the remarks.

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Indonesia to Open the Door to Dual Citizenship

Indonesia wants to introduce dual citizenship for highly skilled foreigners and Indonesians living abroad through a proposed revision of the Citizenship Law, Justice Minister Supratman Andi Agtas said on July 23.

The government will formally ask the House of Representatives (DPR) to make the change as it deliberates on the amended Citizenship Law. If approved, the new regulation would let certain individuals gain Indonesian citizenship without giving up their original nationality.

"If the House agrees, the government will propose limited dual citizenship," Supratman was quoted as saying by Kompas.

The policy would be reserved for people with skills that are seen to be strategically important for Indonesia. Supratman said the plan will not apply to the entire diaspora but be limited to individuals with the necessary skills.

On the list of attractive candidates are top-fight nuclear scientists, researchers, chemists, and elite athletes, he said. Applicants must be sponsored by government entities, sports organizations, and other reputable institutions.

"It will not be open to just anyone. It will only apply to people whose expertise is genuinely needed by the country," Supratman said.

Indonesia has long been hampered by very strict immigration laws and policies that prevent some expatriates from feeling welcome. The idea of dual citizenship is a sign of a more relaxed approach to expatriates.

Supratman said President Prabowo Subianto will formally submit the bill to the DPR. The proposed policy should help Indonesia attract world-class talent, including members of the Indonesian diaspora who have acquired foreign citizenship and are reluctant to renounce it.

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Tobacco Industry Warns New Health Rules Will Disrupt Sector

Indonesia is set to implement tighter tobacco manufacturing and marketing rules under Government Regulation 28/2024 on Health. The regulation is to go into effect on July 26. Business groups and industry associations are warning the new rules will have a negative impact on manufacturers, workers and farmers.

"If these rules are implemented, the industry will collapse," said Henry Najoan, chairman of the Federation of Indonesian Cigarette Manufacturers at a joint %u2060press conference alongside officials of tobacco supply bodies on July 23.

Representatives of industry workers and tobacco farmers have threatened to stage a street protest if the government does not drop the plan.

The regulation introduces standardized packaging for cigarettes and e-cigarettes, limits tar content to 10 mg and nicotine to 1 mg per cigarette, and prohibits certain additives in tobacco products.

The Indonesian Employers Association (APINDO), together with several tobacco industry groups, has argued that the measures could disrupt the domestic cigarette industry and put jobs across the supply chain at risk.

APINDO Public Policy Chairman Sutrisno Iwantono said the new requirements are a great concern to the industry.

“The standardization of packaging, limits on tar and nicotine, and prohibition of additives will shut down the legal industry. The impact will be felt by the workforce, while at the same time encouraging the growth of the illegal cigarette market without any proven public health benefits,” Sutrisno said at the press conference on July 23.

The chairman of the Indonesian Tobacco Community Alliance, Edi Sutopo, said the tobacco sector generates around Rp 710 trillion ($39.6 billion) in economic activity and supports roughly 6 million workers and farmers.

Labor groups also warned that the new requirements could trigger further layoffs. Didik Aswandi, Chairman of the Research and Development Division of the Federation of Tobacco, Food and Beverage Workers’, said unions had submitted objections to several ministries, the House of Representatives (DPR), and President Prabowo Subianto but had yet to receive a response.

Traditionally, Indonesia has not regulated smoking as tightly as most other countries, which has led to 70 percent of adult men taking up the habit.

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US FBI Director Patel Returns Papuan Artifacts to Jakarta

The director of the US Federal Bureau of Investigation, Kash Patel, has returned a collection of cultural artifacts from Papua that had been illegally taken to the United States. He presented the artifacts to President Prabowo Subianto, officials said on July 23.

The handover took place the evening of July 22 at Subianto’s residence in Jakarta. Patel arrived after talks with Cambodian Prime Minister Hun Manet on joint efforts to combat international online scam operations.

The four stone artifacts are from the Dani and Asmat tribes and Lake Sentani communities in Papua and they were repatriated through cooperation between Indonesia’s Culture Ministry and the FBI, Culture Minister Fadli Zon said.

“These are very valuable objects because this repatriation process is part of our effort to restore our cultural sovereignty,” Fadli said. The artifacts will be displayed at Indonesia’s National Museum.

The return is the latest in a series of efforts by US authorities to recover and repatriate Southeast Asian cultural property that was trafficked through international antiquities networks, the US Embassy in Jakarta said in a statement.

Earlier this month, US Attorney for the Southern District of New York Jay Clayton announced the return of two bronze Buddhist sculptures from the eighth century, the embassy said.

During a repatriation ceremony at the Indonesian Consulate on July 10, Clayton said the US would continue working with Homeland Security investigators to combat illicit trafficking in cultural property.

The two sculptures were stolen from Indonesia and sold to an American collector by the late antiquities dealer Douglas Latchford. In 2021, the collector voluntarily relinquished numerous pieces after investigators determined they had been looted.

Latchford, a Bangkok-based dealer, was indicted by US authorities in 2019 for allegedly trafficking antiquities looted from Cambodia and other Southeast Asian countries. The case was dismissed following his death, the US embassy said.

Fadli expressed hope that the cooperation with the FBI will continue.

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Update is AmCham’s regular newsletter on developments related to investment, the economy, regulations and issues related to doing business in Indonesia. It comes out three times a week. It is edited by AmCham Managing Director Donna Priadi and written by the AmCham Staff.

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