Indonesian Law Digest (ILD) – Corporate Criminal Series
Overview
Building on Part I (Corporate Criminal Liability) and Part II (Deferred Prosecution Agreements), this third and final edition of our Indonesian Law Digest (ILD) series examines the evidentiary framework, corporate sentencing regime, and asset seizure mechanisms under:
⮕ Law No. 20 of 2025 on Criminal Procedural Law (KUHAP)
⮕ Law No. 1 of 2023 on the Criminal Code (KUHP)
⮕ Law No. 1 of 2026 on Penal Adjustment
The reformed framework confirms that corporations are fully recognized as subjects of criminal liability, with structured procedures governing:
- Types and admissibility of evidence
- Reverse burden mechanisms (in corruption cases)
- Corporate fines and additional sanctions
- Seizure and auction of corporate assets
- Management of confiscated property
For investors, directors, commissioners and shareholders, this is no longer theoretical. It is operational risk.
I. Evidentiary Framework for Corporate Criminal Proceedings
A. Types and Admissibility of Evidence
The new KUHAP confirms eight admissible forms of evidence, applicable equally to corporate cases:
1. Witness testimony
2. Expert testimony
3. Documents
4. Defendant’s statement
5. Physical evidence
6. Electronic evidence
7. Judicial knowledge
8. Other legally recognized evidence
Key Developments
1. Electronic Evidence Expanded
Electronic evidence now explicitly includes:
- Digital documents
- Emails, system records, server logs
- Stored electronic data
- Optical recordings and digital communications
For corporations operating digitally (banking, fintech, real estate marketing, tax reporting), this significantly expands exposure.
Also Read : Indonesia’s New Criminal Code Now Officially in Force
2. Authenticity and Lawfulness Requirement
Evidence must:
- Be authentic
- Be lawfully obtained
Judges may reject unlawfully obtained evidence entirely.
3. “Single Witness Is Not Enough”
A single witness cannot establish guilt. Corroboration remains mandatory — preserving due process safeguards.
B. Technical Assistance & Reverse Burden of Proof
The KUHAP introduces structured investigative tools allowing:
- Forensic accounting
- Digital system examination
- Asset tracing
- Expert-assisted analysis
Reverse Burden in Corruption Cases
Under Law 31/1999 (as amended):
- Defendants may be required to explain disproportionate assets.
- Failure to justify asset growth strengthens prosecution arguments.
- Assets without proven origin may be confiscated.
This is particularly relevant for:
- State contractors
- SOE partners
- Infrastructure developers
- Tax-sensitive businesses
The principle remains balanced — presumption of innocence still applies — but financial transparency becomes central.
II. Corporate Criminal Sanctions and Sentencing Framework
A. Principal and Additional Sanctions
Corporations cannot be imprisoned. Instead, they face:
Principal Punishment
- Fines
Additional Sanctions
- Corporate takeover
- Supervision or guardianship
- Business freezing
- Asset confiscation
- Restitution and compensation
Important: Category VIII Fine
If a corporation faces a Category VIII fine (Rp 50 billion) and the court finds it insufficient, judges may impose:
An additional fine of up to 10% of the corporation’s prior year profits.
For profitable enterprises, this is significant.
B. Sectoral Sentencing Adjustments
The new penal regime adjusts sanctions across sectors:
- ITE offenses
- Money laundering
- Tax and excise violations
- Corruption
- Environmental crimes
- Copyright
Observed Pattern
- Many fines reduced
- Minimum penalties removed
- Greater judicial discretion (“and/or” formulation)
- Financial impact emphasized in state-loss cases
This signals proportionality — but also unpredictability depending on judicial reasoning.
Also Read : Indonesia’s New KUHAP (2025): What Corporations Need to Know About Criminal Procedure in the Post-2026 Era
III. Enforcement and Execution of Sanctions
A. Fine Payment Timeline
Once judgment becomes final and binding:
- Fine must be paid within 1 month
- Extension of 1 additional month possible
- Installments allowed (judicial discretion)
If unpaid:
- Prosecutor may seize corporate assets
- Assets auctioned via state auction office
- If insufficient → business may be partially or fully frozen
B. Compensation and Restitution
- Must be settled within 1 month
- Extension possible
- Failure → assets seized and auctioned
- Proceeds go to state treasury
IV. Asset Seizure and Management
A. Criteria for Seizure
Assets may be seized if they are:
- Instruments of crime
- Objects of crime
- Proceeds of crime
- Directly connected to criminal conduct
Seizure requires District Court authorization (except in “caught in the act” scenarios).
If located abroad → Central Jakarta District Court jurisdiction.
If ownership unknown → public announcement and objection process required.
B. Auction and Disposal
Seized goods may be:
- Stored in Rupbasan (State Confiscated Property Storage House)
- Auctioned (especially perishable/hazardous goods)
- Returned if later deemed not confiscable
If auctioned but later ruled not confiscated → proceeds returned within 30 days.
C. Rupbasan Management Stages
Under Ministerial Regulation 16/2014:
1 Storage (classified by case stage)
2 Security (anti-theft, anti-damage, anti-substitution)
3 Maintenance (logged and reported)
4 Safeguarding (disaster protection)
The goal: preserve economic value pending final judgment.
Also Read : Indonesia’s New KUHAP: Deferred Prosecution Agreements and Lessons from International Practice
Key Takeaways for Corporations and Investors
1. Corporate liability is now structurally embedded in criminal procedure.
2. Electronic and financial evidence will play a central role.
3. Asset transparency is critical — unexplained growth creates exposure.
4. Judicial discretion has increased — both risk and flexibility.
5. Asset seizure mechanisms are clearer and more enforceable.
6. Fine enforcement is fast (1–2 months), with real auction consequences.
7. Corporate governance and compliance systems are no longer optional.
Strategic Implications for Businesses in Indonesia
For foreign investors, PT PMA shareholders, developers, and directors:
✓ Internal compliance audits are essential.
✓ Tax structuring must be defensible.
✓ Beneficial ownership transparency must be clean.
✓ Digital systems must be traceable and auditable.
✓ Environmental and licensing compliance must be documented.
The era of informal risk tolerance is narrowing.
Conclusion
The new KUHAP reflects a modernized procedural architecture that:
▪ Recognizes corporations as full criminal subjects
▪ Integrates digital and forensic evidence
▪ Clarifies asset seizure and enforcement mechanisms
▪ Enhances proportionality in sentencing
▪ Strengthens state capacity in asset recovery
The true test will lie in implementation — particularly inter-agency coordination, judicial interpretation and institutional readiness.
If applied coherently, the new framework may improve legal certainty. If applied inconsistently, it may generate strategic unpredictability.
For corporations operating in Indonesia’s increasingly regulated landscape, proactive compliance is now a strategic necessity — not merely a defensive measure.
How Seven Stones Indonesia Can Assist
The expanded corporate liability framework under the new KUHAP, read together with the KUHP and Law 1/2026, requires corporations to move beyond reactive compliance and adopt structured, documented and defensible governance systems.
Seven Stones Indonesia provides integrated legal and advisory support to mitigate criminal exposure, particularly for foreign investors, PT PMA shareholders, directors and real estate developers operating in Bali and across Indonesia.