Registry of Trusts to open this month

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)