Indonesian Anticorruption Law Update

Indonesian Anticorruption Law Update

23 February 2017

On Wednesday, 25 January 2017, the Constitutional Court ("CC") rendered its decision No. 25/PUU-XIV/2016 ("Decision No. 25/2016") on the judicial review of the Indonesian Anticorruption Law. Although four CC Judges dissented, the majority of the Judges decided to amend Article 2(1) and Article 3 of the Indonesian Anticorruption Law.

The articles - with the key amendments highlighted - now read as follows.

Article 2(1)

Any individual who acts unlawfully to enrich themselves or any other individual or a corporation which causes damage to the State's finance or the State's economy, shall be punished with imprisonment for life or a minimum imprisonment sentence of 4 (four) years up to a maximum imprisonment sentence of 20 (twenty) years and a minimum fine of Rp. 200,000,000.00 (two hundred million Rupiah) up to a maximum fine of Rp. 1,000,000,000.00 (one billion Rupiah).

Article 3

Any individual with the intention of enriching themselves or any other individual or a corporation through an abuse of authority, opportunity or facilities available to the individual due to the individual's title or position which causes damage to the State's finance or the State's economy, shall be punished with imprisonment for life or a minimum imprisonment sentence of 1 (one) year up to a maximum imprisonment sentence of 20 (twenty) years and/or a minimum fine of Rp. 50,000,000.00 (fifty million Rupiah) up to a maximum fine of Rp. 1,000,000,000.00 (one billion Rupiah).

The amendments now make it mandatory for legal enforcement agencies to prove the element of "State (economic or financial) loss". It should also be noted that according to a circular issued by the Supreme Court of the Republic of Indonesia in 2016, only the State Auditor (BPK) has the authority to declare State loss.

Whilst the amendment will  increase the comfort level of corporates in the Indonesian market as to what might constitute "damage to the state", it will on the other hand increase the burden on the Police and the KPK and may result in a slowing of the aggressive anti-corruption campaign that we have seen over the last few years

Contacts :

Chalid Heyder - Partner Indonesia : chalid.heyder@dnfp.com

Teguh Darmawan - Senior Associate Indonesia : teguh.darmawan@dnfp.com  

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