In the beginning of the year 2024, on 2 January 2024, Law No. 1 of 2024 regarding the Second Amendment to Law No. 11 of 2008 regarding Electronic Information and Transactions (“Law 1/2024”) has been officially promulgated. The Government aims to maintain a safe digital space from misuse of electronic information and documents, technology, and/or electronic transactions.
A key takeaway from the promulgation of Law 1/2024 provides that there has been a total of 18 (eighteen) changes in the ITE Law. This article will discuss the amendment which mainly affects the electronic certification, electronic system, electronic transaction security, international contract, and the authority of civil servant investigator(s), as the comparison matrix presented below:
| Subject | ITE Law | *Law 1/2024* | Remarks | |||
| Electronic Certification | Legal Status a. The Electronic Certification Organizer (Penyelenggara Sertifikasi Elektronik, or “PSrE”) includes: (i) Indonesian PSrE; and (ii) Foreign PSrE. b. Foreign Electronic Certification Organizer that operates in Indonesia shall be registered in Indonesia. | Legal Status a. PSrE which operate in Indonesia must be Indonesian legal entities and must be domiciled in Indonesia. b. However, the above provisions are excluded if the implementation of E-Certificates services is not yet available in Indonesia. | Mutual recognition to recognize E-Certificate between countries is based on a cooperation agreement. Based on the Elucidation of Law 1/2024, such cooperation agreement includes: · agreement between PSrE; and · agreement between Governments whose PSrE will carry out mutual recognition, both bilaterally and multilaterally. | |||
| Scope of Services PSrE is a legal entity which provides and audits an E-Certificate. E-Certificate is an electronic certificate containing E-Signature and the identity, which is then further issued by PSrE. | Scope of Services Apart from services regulated under ITE Law, the PSrE may organize the services below: · E-Seal; · E-Timestamp; · recorded electronic delivery service; · website authentication; · preservation of E-Signature and/or E-Seal; · digital identity; and/or · other services that use E-Certificate. | Other than the ‘digital identity’ service, for your information, PSrE services in Law 1/2024 is the same as outlined under Minister of Communication and Informatics Regulation No. 11 of 2022. | ||||
| Electronic System | Child Protection N/A | Child Protection An Electronic System Operator (“PSE”) must provide protection for children who use or access the Electronic System. In providing such protections, PSE must provide: · information on the age restrictions; · verification mechanism for child users; and · reporting mechanisms for misuse of products, services, and features that violate or potentially violate children’s rights. | Failure to implement child protections will result in the imposition of administrative sanctions, ranging from written reprimands, administrative fines, temporary suspensions; and/or access termination. | |||
| Electronic Transaction Security | Utilization of E-Signature N/A | Utilization of E-Signature High-risk electronic transactions use E-Signature secured by E-Certificate. | Referring to the Elucidation of Law 1/2024, an example of “high-risk electronic transactions” includes financial transactions that are carried out without physical presence/online. Other than the possibility of technical security issues, we do not see any from of sanction being imposed for the incompliance of this provision. | |||
| International Electronic Contract | Governing Law N/A | Governing Law International Electronic Contracts that use standard clauses (klausula baku) made by PSE should be governed by the Indonesian law and drafted in Indonesian if: · PSE service users, as one of the Electronic Transaction contracting parties, are from Indonesia and provides its consent from or within the jurisdiction of Indonesia; · the contract is implemented within the territory of Indonesia; and/or · PSE has its establishment or conducts business activities within the territory of Indonesia. | Elucidation of Law 1/2024 stipulates that this new provision is targeted for agreements containing standard clauses (klausula baku) intended for Indonesian citizens in general in using services or products provided by the PSE. While we do not see any sanctioned imposed for the incompliance with this provision, we envisage that it could trigger an establishment of a brand new PSE’s obligation resulting in the alteration of PSE’s service and products terms and conditions that being used by Indonesian users or used in Indonesia. | |||
| Civil Servant Investigator (Penyidik Pegawai Negeri Sipil) | Authority As stipulated under Article 43 paragraph (5) letters (a) – (k). | Authority Adding one new authority, i.e. Article 43 paragraph (5) letter l: “Ordering PSE to conduct temporary suspension of access to social media accounts, bank accounts, electronic money, and/or digital assets.” | Access termination includes ordering the Electronic System Operator to block social media accounts, bank accounts, electronic money, domain names, internet protocol addresses (IP addresses), and/or digital assets. The period of “temporary” shall be interpreted as long as necessary for the law enforcement process. |
Following the above, we foresee that several implementing regulations will also be enacted in the near future to accommodate framework changes introduced in Law 1/2024. This yet again portrays the continual demonstration by the government to further strengthen the laws and introduce sanctions surrounding the misuse of electronic information, documents, and electronic transactions to ensure a safe cyber space for the ever-growing digital era.
Should there be any queries related to this regulation or to find out if this affects your business or personal interest, please do not hesitate to contact us.
