On January 2nd 2023, the Indoensian government passed Law No: 1 of 2023 concerning the Indonesian Criminal Code (“ICC”) to replace the previous criminal code which was first introduced by the Dutch government during the colonization over Indonesia 300 (three hundred) years ago. The new ICC aim to be more modernized and grounded to the development of corporate practice. To that end, the corporation may now be subject to criminal liability under the new criminal code.
Previously, the subject to criminal liability is only limited to individual since the concept of corporation as well as corporate criminal liability is not common during the Dutch colonial period. Article 145 of the the new ICC has included corporation in the definition of a ‘person’. Meaning, whenever the new criminal code refers to a person, it will also include corporation.
The new ICC further defines what it means by ‘corporation’ which includes more than limited liability companies i.e., foundations, cooperatives, state-owned and region-owned enterprises, civil partnerships, firms, and other equivalent entities.
The new ICC also defines the concept of corporate crime as any criminal act committed by:
The new criminal code outlines the criteria for imposing criminal penalties on corporations. The criteria include the following:
It is important to note that these criteria are not cumulative. As such, the corporation may be held liable even if it satisfies only one of the above criteria.
A corporation is subject to (i) primary sanction, and (ii) additional sanctions. The primary sanction for corporations is in the form of fines with a minimum of Category IV fine in the amount of IDR 200.000.000,00 (two hundred million Rupiah) up to Category VII fine in the amount of IDR 50.000.000.000,00 (fifty billion Rupiah). On top of primary sanctions, the sentence against corporate crime can also include additional sanctions which may include:
Furthermore, the government reserves the right to take over or place the corporation under supervision or guardianship in addition to the above-mentioned sanctions. In the event that the corporation does not carry out the additional sanction from letter a to letter e, the corporation’s asset may be confiscated and auctioned to pay for the unfulfilled additional sanction.
While the new criminal code would only enter into force 3 (three) years after its promulgation, corporations have to anticipate the increase of prosecution of corporate crime in the future. As dragging a multi-million corporation into lengthy criminal procedure would be as mundane as a police report, corporations have to implement good corporate governance by virtue of vigilence and compliance with law.
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