The Law No. 1 of 2023 of the Criminal Code (the New Criminal Code) provides amendments to many provisions, including the legal subject that now includes corporations. Unlike the former Criminal Code that only recognizes individuals as the legal subject, the element of “any person” will now also include corporations.
The parties that can be held liable for corporate crimes
The corporations as regulated in the New Criminal Code, include1:
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a limited liability company;
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a foundation;
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a cooperation (perkumpulan);
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a state-owned enterprise;
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a regionally-owned enterprise or the equivalent;
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an association (both incorporated and unincorporated);
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business entities in the form of a firm; or
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limited partnership or the equivalent in accordance with the provisions of laws and regulations.
The New Criminal Code also imposes criminal liability on the following parties – within and/or outside the corporation2:
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Any party in the management who holds a functional position;
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Any party with authority to give orders to the corporation;
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The controller of the corporation; and/ or
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The beneficial owner of the corporation;
Relevant Notable Changes
Prior to the inclusion of corporate crime under the New Criminal Code, the Supreme Court introduced the Supreme Court Regulation No. 13 of 2016 on Case Handling Procedures for Corporate Crimes (Supreme Court Regulation) to assist law enforcement agencies in prosecuting corporations. We note that there are several notable differences between the Supreme Court Regulation and the New Criminal Code. These include, amongst others:
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Supreme Court Regulation
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New Criminal Code
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Definition of corporate crime
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Criminal acts committed by3:
- persons based on employment relations; or
- persons based on other relationships;
both on their own and jointly, who are acting for and on behalf of the corporations within or outside of the corporation’s environment.
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Criminal acts committed by4:
- management who have functional positions within the corporation’s organizational structure;
- persons based on work relationships; or
- persons based on other relationships
acting for and on behalf of the corporations or acting in the interests of the corporations, within the scope of said corporations’ business or activities, either individually or collectively.
Further, corporate crime can also be committed by the controllers or beneficial owners of a corporation.5
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Requirements on when a corporation may be criminally liable, amongst others:
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- Corporations may obtain profits or benefits from criminal acts or criminal acts which are committed in the interest of the Corporation;
- The Corporations allows criminal acts to occur; or
- The Corporation fails to take the necessary measures to prevent occurrence, minimise impact and ensure compliance with applicable legal provisions to avoid the occurrence of criminal acts.6
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- If the criminal offence is included in the scope of business or activity as determined in the articles of association or other provisions applicable to corporations;
- If the criminal offence unlawfully benefits the corporation unlawfully;
- If the criminal offence is accepted as a corporate policy;
- corporations which fail to take the necessary measures in order to prevent occurrence, minimize impact and ensure compliance with the prevailing legal provisions in order to avoid the occurrence of crime offence; and/or
- Corporations which allow criminal acts to occur.7
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Sanctions
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Primary and/or additional sanctions8
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Primary and additional sanctions9
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Sanctions for Corporate Crimes
Primary sanction
The primary sanction that may be imposed on the corporations is criminal fines10 amounting to IDR 200,000,000 (or equivalent to USD$13,316.46*), unless stipulated otherwise by law.11
The maximum amount of criminal fines also depends on the sentences for the criminal offences. For example, criminal offences that may be attract sentences of capital punishment, life imprisonment, or imprisonment for a maximum of 20 (twenty) years may also have criminal fines imposed amounting to a maximum amount of IDR 50,000,000,000 (or equivalent to USD$3,754,751.64*).12
The corporation must fulfil the criminal fines within the period determined by the court. Otherwise, the prosecutor may confiscate and auction the assets or the income of the corporation.13
*with the exchange rate of 1 USD = IDR 15,019.
Additional sanction
Corporations are also subject to additional sanctions as listed below:
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indemnity of payment;
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to remedy any impact caused by the criminal offence;
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to implement any obligations that have been neglected;
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to fulfil any customary obligations;
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to financially support job training;
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confiscation of goods or profits obtained from the criminal offence;
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publication of the court decision(s);
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revocation of certain licences for a maximum of 2 (two) years;
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permanent ban on undertaking certain actions;
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full or partial closure of business places and/or business activities for a maximum of 2 (two) years;
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full or partial suspension of business activities for a maximum of 2 (two) years; and
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dissolution of the Corporation.
The public prosecutor may confiscate and execute through auction the assets or income of the corporation for failure to carry out the additional sanction items (a) to (e).
Kindly note that under the New Criminal Code, the government will issue further regulations on sanctions for corporate crimes. Once issued, it is expected that the regulations will provide clarity on how the above sanctions shall be imposed.
Prevention of corporate crimes
Having and implementing a robust compliance programme is important for corporations operating in Indonesia. Moreover, the New Criminal Code indicates that corporations can also still raise adequate defences i.e. when the corporation in question had in place procedures designed to prevent persons associated with the corporation from undertaking criminal conduct.
As the New Criminal Code will only be effective from 2 January 2026, there is still time for corporations to review or design their compliance programmes to mitigate the risk of prosecution.
Authored by Chalid Heyder, Teguh Darmawan, and Anisa Alifia.
References
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Article 45(2) of the New Criminal Code
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Article 49 of the New Criminal Code
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Article 3 of Supreme Court Regulation
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Article 46 of the New Criminal Code
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Article 47 of the New Criminal Code
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Article 4(1) of Supreme Court Regulation
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Article 48 of the New Criminal Code
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Article 25(1) of Supreme Court Regulation
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Article 118 of the New Criminal Code
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Article 119 of the New Criminal Code
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Article 121 (1) of the New Criminal Code
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Article 121 (2) of the New Criminal Code
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Article 123 of the New Criminal Code
