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Corporate Criminal Liability and Prosecution of Financial Crimes in Indonesia 2023
In Indonesia, corporates can be held criminally liable, although corporate liability is not specifically regulated under the country’s criminal law system. The arrangements regarding corporate criminal liability in Indonesia are currently regulated in Law Number 1 of 2023 on Criminal Code, which will take effect from January 2, 2026.
According to Article 45 Paragraph (1) of Law Number 1 of 2023 on Criminal Code, “Corporations are the subject of Crimes.” The determination of corporate criminal liability is governed by Article 46 of the same law, which states that “Crime by Corporations are Crimes committed by management who have functional positions within the Corporation’s organizational structure or persons who, based on work relationships or 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.”
In imposing criminal penalties on corporations, judges may assess the corporation’s mistakes based on factors such as whether the corporation gained profits or benefits from the criminal activity, whether the corporation allowed the criminal act to occur, or whether the corporation failed to take necessary steps to prevent the criminal act from occurring (Article 4 Paragraph (2) Regulation of The Supreme Court Number 13 of 2016).
Commonly Prosecuted Offences for Company Directors and Officers
Company directors and officers in Indonesia are often prosecuted for offenses such as corruption, money laundering, embezzlement, fraud, and tax offences.
Lead Prosecuting Authorities and Their Responsibilities
In Indonesia, the authority to investigate and prosecute financial crimes is organized separately. The authority to investigate belongs to an investigator, such as the Directorate of Economic and Special Crimes of the police force, which has responsibilities outlined in Article 7 Paragraph (1) of Law Number 8 of 1981 on Criminal Procedure. These responsibilities include accepting reports, taking initial steps at the crime scene, ordering suspects to stop and examine identification, conducting arrests, detentions, searches, and seizures, and other investigative actions.
The authority to prosecute belongs to the public prosecutor, as stipulated in Article 13 of Law Number 8 of 1981 on Criminal Procedure. The prosecutor’s responsibilities, outlined in Article 14 of the same law, include examining case dossiers, conducting pre-prosecutions, granting extensions of detention, preparing indictments, bringing actions before the court, conducting prosecutions, and executing judges’ rulings.
In addition to the police and prosecutors, Indonesia has established the Corruption Eradication Commission, which has the authority to investigate and prosecute corruption crimes specifically, involving law enforcement officials, state administrators, or other individuals involved in corruption cases with losses to the country of at least one billion rupiah (Article 6 letter e Law Number 19 of 2019).
The Financial Services Authority is also authorized to investigate financial crimes specific to banking crimes in Indonesia, as part of its supervisory duties over financial service institutions, perpetrators, and supporting financial services activities (Article 9 letter c of Law Number 21 of 2011 on the Financial Services Authority, as amended by Law Number 9 of 2016).
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