In April 2023, The House of Representatives of Indonesia issued an updated Bill regarding the asset deprivation relating to the criminal act. The Bill was initially introduced in January 2008 and then revised in May 2010 and April 2023.
This Bill defines asset deprivation as measures taken by the state to seize control and/or ownership of criminal assets (whether movable or immovable, tangible or intangible, and having economic value) based on a final and binding court order, regardless of the perpetrator’s punishment.
In general, the Bill regulates the following key provisions:
A. Types of criminal asset that can be deprived
Criminal assets that can be deprived under the Bill on the asset deprivation include, among others: (i) assets resulting or obtained directly or indirectly from criminal offenses, including those that have been donated or converted into personal property; (ii) assets that are known or reasonably suspected of being used or have been used to commit a criminal offense; (iii) other assets belonging to the perpetrator as a substitute for assets that have been deprived by the state; (iv) assets that are known or reasonably suspected of originating from criminal offenses; and (v) assets that are not balanced with the perpetrator’s income and are suspected of being related to criminal assets.
For assets (i)-(iv) above, however, the Bill stipulates that they can only be deprived if their value is at least IDR 100,000,000 (one hundred million Rupiah) and they are related to crimes punishable by at least 4 (four) years in prison.
B. Procedural law of the asset deprivation
The Bill provides a detailed procedural law for the asset deprivation (which is not available in the current prevailing laws and regulations) as follows:
Tracing process is a series of actions to search, request, obtain, and analyze information to determine or uncover the origin, existence, and ownership of criminal assets. The assets tracing is carried out by the investigators, which may include the Indonesian National Police, the Indonesian Attorney General’s Office, the Corruption Eradication Commission, the National Narcotics Agency, and Civil Servant Investigator.
Further, to uncover as many alleged criminal assets as feasible, the Bill exempts any individual, government organization, or other institution that gives information (in good faith) about the assets of the perpetrator from civil, administrative, or criminal sanctions.
In addition to the Bill, the general tracing process is governed by Law No. 8 of 2010 on the Prevention and Eradication of Money Laundering, as amended by Law No. 1 of 2023 on the Penal Code, which will enter into force on 2 January 2026. This law stipulates that criminal assets can be identified through tracing and then deprived by the state or returned to their rightful owner.
- Blockage and Seizure
Blockage process is a series of actions to temporarily freeze assets suspected of being criminal assets. The blockage is carried out for a maximum period of 30 (thirty) days and can be extended for another 30 (thirty) days.
Meanwhile, the Bill defines seizure as a series of actions to temporarily take over control of assets suspected of being criminal assets for the purpose of evidence in the examination of an asset deprivation application case.
Under this Bill, the assets blockage or seizure may only be carried out by the investigator based on the permit/approval from the competent District Court. In the event that the assets are located outside of Indonesian jurisdiction, the investigator may request the blockage or seizure to the competent authority in that country. If such request is rejected, the investigator may block and seize the assets in Indonesia which owned/possessed by the person whose assets are located abroad.
- Filling and Asset Deprivation Application
The Bill stipulates that within a maximum of 7 (seven) days from the assets blockage and/or seizure, the investigator shall proceed to file the blocked and/or seized assets along with evidence to support the application for asset deprivation and then provide such files/case bundles to the competent State Prosecutor.
After carrying out the filing process, the petition for asset deprivation shall be submitted in writing by the State Prosecutor to the competent District Court to be examined, adjudicated and decided.
Nonetheless, in the event that there is a party who suffers losses due to such asset deprivation, such party may file a counter claim in writing to the competent District Court before or during the court hearing on the asset deprivation.
- Court Summons
The Clerk at the competent District Court, upon the order of the Chairman of the District Court, serves a summons to the State Prosecutor who filed the asset deprivation application, requiring them to appear at the hearing. In the event that the person in possession or control of the assets is known and/or there is an objection, a summons shall also be served to the party concerned through their last residential address.
In the event that such party is currently detained in a State Detention House (Rumah Tahanan Negara) or imprisoned, a summons shall be delivered through an official at the State Detention House or prison. In the event that the party is a corporation, a summons is addressed to the corporation’s administration at its domicile.
- Court Examination
The examination of the application for asset deprivation is conducted by a Panel of Judges in hearing that is open to the public. Furthermore, in the examination of an application for asset deprivation, the State Prosecutor who submits such application is obliged to submit the arguments that form the basis of the application and to prove that the assets petitioned for deprivation are assets of a criminal offense.
Moreover, the State Prosecutor is obliged to present the assets petitioned for deprivation at the hearing. In the event that the petitioned assets are in the form of accounts or intangible objects, the examination can be in the form of a statement (affidavit) from the relevant service provider.
C. Asset Management
The Bill stipulates that asset management is the activity of storage, security, maintenance, valuation, alienation, use, utilization, and/or return of criminal assets.
The party who conducts asset tracking is the Attorney General, who may appoint the State Confiscated Property Storage House (Rumah Penyimpanan Benda Sitaan Negara) or other parties to assist in maintaining the asset. In addition, the Attorney General is obliged to submit a report on the implementation of asset management tasks periodically every 6 (six) months to the President of Indonesia.
D. International Cooperation
The Government of Indonesia may have an international cooperation with other countries, either through bilateral, regional, and/or multilateral cooperation, in relation to the assistance of the tracing, blockage, seizure, and deprivation of the assets.
Indonesia has enacted Law No. 1 of 2006 regarding Mutual Assistance Treaties which regulates the scope of the sharing of deprived criminal proceeds to the assisting country. Further, Indonesia has signed the ASEAN MLA and several Mutual Legal Assistant (MLA) treaties with several countries, among others, Republic of Korea, Australia, India and People’s Republic of China.
The Bill on asset deprivation will have a positive impact on enforcement of the criminal assets in Indonesia as it provides access to relevant authorities to file and petition for the asset deprivation based on the relatively clear legal procedure.
Further, we view that the asset deprivation mechanism under this Bill, which may be conducted without criminal charges, is considered a breakthrough as it will take less time and provide a greater opportunity for the state or for the rightful owner to regain their possession over the assets.
However, it might give rise to several controversial points; such as unjust asset deprivation if the suspect is not guilty which, under the Bill’s stipulations, opens the possibility for the aggrieved party to submit the asset deprivation application to the relevant authority. Additionally, the Bill dispenses loopholes for suspects to be released/minimized from their prison sentence as long as they are willing to give up their assets to be deprived by the state.
In addition, the legislative process in Indonesia is not governed by a strict timetable. Since its initial introduction in 2008, the passage of this bill has taken 15 (fifteen) years. The House of Representatives of Indonesia and the relevant Ministry are presently in the deliberation phase of the Bill. The Bill is two phases removed from ratification and promulgation at this time.