CORPORATE CRIMINAL LIABILITY NEWSLETTER
Key Points of Corporate Criminal Liability in Indonesia
by Aurora Nia
An Overview:
Pursuant to Indonesian prevailing laws, there are several statutes provided for the attribution of criminal responsibility and/or to the Board of the Company.
Statutes aforementioned include the Anti-Corruption Law; Anti-Money Laundering Law; and Environmental Protection Law. Some examples of wrongdoing that a company and/or Board may be criminally liable to include:
Providing of offering bribes to public officials;
Hiding or disguising the origin of assets obtained as a result of criminal action; and
Damaging the quality standard of water, air and other environmental criteria, including the disposal of waste.
Company's obligation to disclose potential criminal offence to the competent prosecution authorities:
Generally, companies are not required to disclose potentially criminal conduct. However, there are some exceptions. For examples, under the Anti- Money Laundering Law, financial service providers are required to report certain suspicious financial transaction. If a financial services provider fails to disclose such transactions, the relevant authority can then impose sanction against the financial services provider, including fines and formal warning.
The defendant company in criminal proceeding:
A defendant company will be represented by the board of the company, and special sanctions may be imposed on the company (including suspension or revocation of business license).
If the act of individual can be attribute to the company by virtue of the individual's working relationship with the company, then it is not necessary to prosecute separately an individual perpetrator and/or to convict the individual perpetrator in order to be able to prosecute the company.
Sanctions:
Generally, companies are subject to fines for contraventions of criminal provisions. For example, under the Anti-Corruption Law, the maximum fine that may be applied to a natural person may be increased by one-third when applied to a company, which depending on the offenses may ultimately lead to a fine up to 1 billion rupiah.
Some relevant statutes impose additional criminal sanctions. For example, under the Anti- money Laundering Law, a company may be fined up to 100 billion rupiah for committing an offense under the statue and may also be subject to suspension of all or some its business activities, revocation of its business license, dissolution, confiscation of its assets or state-take over.
Board's Liability:
If a company fails to pay a fine after its assets have been confiscated, board members' assets can be confiscated to discharge the fine. Where board members' assets are still insufficient to pay the fine, board members may be imprisoned to discharge the fine.
The Indonesian legal system does not contain a formal mechanism for plea bargaining.
Compliance as a preventive action:
Having an adequate compliances structures in place might be used as a ground to argue that criminal responsibility should not be attributed to a company. A company may be able to adduce evidence of compliance structure as a evidence that a relevant act of an individual should not be attributed to the company, as the act was not committed for on behalf of the company.
No settlement for criminal liability:
Unless due to lack of evidence at the investigation stage, Indonesian legal system does not allow for prosecutorial authorities to reach settlement with defendant companies. Once commenced, a criminal proceeding must continue to the issuance of decision by a court.
Comments