Overview of Legal Framework

The sale and purchase of vessels in Indonesia are governed by a comprehensive framework of maritime laws. Key regulations include Law No. 17 of 2008 on Shipping (as amended by Law No. 6 of 2023 on Job Creation), Government Regulation No. 31 of 2021, and Minister of Transportation Regulation No. 39 of 2017 on Vessel Registration and Nationality. These laws classify vessels into sea-going, fishing, and inland waterway categories.

Pre-Operational Legal Process

Before a vessel is permitted to operate, it must undergo three legal processes that conducted by Directorate General of Sea Transportation: (i) measurement, (ii) registration, and (iii) nationality determination. These steps ensure compliance with national safety and legal standards.

Measurement is conducted using one of three methods: domestic, international, or special. Domestic measurements apply to vessels under 24 meters, international methods follow global conventions, and special measurements are used for specific routes, such as the Suez or Panama canals. Vessels meeting the minimum gross tonnage of 7 GT are eligible for registration. Upon completion, the Directorate General of Sea Transportation issues the Measurement Certificate (Surat Ukur).

Once measured, the vessel may be registered through the Electronic Vessel Registration System (“SPKE”). Ownership must first be documented through a notarial deed of sale, and registration is only available to Indonesian citizens, Indonesian legal entities, or joint ventures with majority Indonesian ownership. Successful registration results in the issuance of the Grosse Akta Pendaftaran, serving as legal proof of ownership.

Ownership Transfer and Deregistration

Ownership transfer must be registered through a change of ownership application submitted via SPKE to the Vessel Registrar at the port where the vessel is registered. This must be completed no later than three months from the date of transfer and requires documents such as a deed of sale, inheritance certificate, or auction report over the relevant vessel. Vessels subject to mortgages or seizures cannot be transferred until the mortgage or the seizure has been formally released.

In Indonesia, the sale and purchase of vessels is a legal process deeply intertwined with vessel registration, nationality determination, and strict compliance with maritime safety standards. Proper documentation, timely registration, and clearance of any encumbrances are essential to ensure lawful transfer of ownership and continued eligibility to sail under the Indonesian flag.

If a vessel is decommissioned, destroyed, or sold to a foreign entity, the vessel’s owner must request its deregistration from the port authority. It is important to note that deregistration is an administrative process related solely to a vessel’s eligibility to operate under the Indonesian flag and does not in itself constitute a transfer of ownership. Re-registration is permitted provided the vessel has not been registered in a foreign registry.

Certificate of Nationality and Marking Requirements

To operate under an Indonesian flag, a vessel must obtain a Certificate of Nationality (Surat Tanda Kebangsaan Kapal) issued by Directorate General of Sea Transportation. Vessels bearing hull markings must clearly display their registration and tonnage data. These rules apply uniformly to all registered vessels to uphold legal clarity and operational transparency.

International Standards and BIMCO Contracts

Indonesia aligns with global maritime standards through cooperation with the Baltic and International Maritime Council (“BIMCO”). BIMCO provides standard contracts for vessel sale and purchase of vessels, including the Shipsale 22, which is widely used in international transactions for its standardized terms that offer certainty and enforceability for buyers and sellers. BIMCO contracts complement Indonesia’s domestic regulations, which emphasize due diligence and proper documentation. Shipsale 22 builds on previous models like Saleform 2012 and is updated to reflect best practices. This harmonization of local and international standards supports secure and efficient vessel transactions under Indonesian jurisdiction.

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NOTE

This article provides general information and does not constitute legal advice. Readers should seek specific legal counsel for their circumstances.