Registry of Trusts to open this month

JAKARTA (JP): The Registry of Trusts in Jakarta, the first of its kind in the country, will open for business on Oct. 30.

Minister of Justice and Human Rights Affairs Yusril Ihza Mahendra, who announced the opening on Thursday, said other provincial capitals would eventually have their own registries for fiduciary deals in their own areas.

Presidential Decree No. 139/2000 signed this month calls for the establishment of registries of trusts throughout the country within the next six months in compliance with the 1999 law on fiduciary assurance.

At the provincial level, they are part of the ministry's regional office (Kanwil). Their activities will be supervised by the Directorate General of Public Legal Administrations of the ministry.

A fiduciary agreement is a loan arrangement in which the title of the accompanying collateral remains in the hands of the debtor instead of it being passed to the creditor.

Director General of Public Legal Administration Ramli Atmasasmita cited the example of a person who put up his car as security for a loan without giving up its ownership.

The Registry of Trusts charges Rp 50,000 (about US$6) for a certificate which gives legal protection to such business transactions and recourse for the creditor in the event that the borrower fails to repay the loan.

Under the law, a person who neglects his obligation is liable to a maximum five years in jail or a Rp 10 million fine.

Transactions not covered by the fiduciary law are those related to land and buildings, for hypothecates in the purchase of ships weighing more than 20 metric tons and of planes of all kinds, and pawn deals. (01)