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10 July 2017
The Supreme Court's enactment of the Regulation regarding the Manner and Procedure for the Handling of Crimes Committed by Corporations (13/2016) is a significant milestone in the development of Indonesia's corporate criminal liability legislation.
Regulation 13/2016 consists of 37 articles and aims to provide law enforcers with guidance on handling corporate crimes. The regulation strengthens and complements the existing regulations – namely:
Regulation 13/2016 was officially signed by the Supreme Court chair on December 21 2016. It defines 'crimes committed by corporations' as crimes committed jointly or severally by parties on the basis of a work or non-work relationship for or on behalf of the respective corporation, either inside or outside the corporation's environment. A 'corporation's environment' is further defined as the scope of the corporation or its business, including work which directly or indirectly supports the corporation's business activities.
Corporations should note the following new rules set out by Regulation 13/2016.
Corporate liability in corporate crimes
As regards corporate groups, the prosecuted corporation's parent, subsidiary or affiliate company (including its sister company) may be prosecuted for its involvement in a crime. In such cases, the criminal liability will be apportioned based on each corporation's actual role and involvement.
In a merger or consolidation, liability is limited to the value of the assets placed in the surviving corporation or the newly established corporation.
As regards spin offs, liability is imposed on the spun-off corporation, the corporation conducting the spin off or both, in accordance with their respective roles in the corporate crime.
In case of a dissolution, liability is still imposed on the dissolving corporation. A corporation that has been dissolved after a corporate crime occurs is immune from criminal proceedings. However, the dissolved corporation's assets that were allegedly used when committing the crime or constitute the result of the crime are subject to law enforcement measures under the prevailing criminal law. Civil lawsuits may also be launched against ex-board members, as well as heirs and other third parties that control the assets deriving from the corporation's dissolution. If there are concerns that the corporation intends to avoid its liabilities by way of dissolving itself, the investigators or prosecutors may request a court order to suspend the dissolution process.
Judges can determine liability
Judges can determine whether a corporation is liable for a corporate crime by considering whether the corporation:
Judges can sentence a corporation, its board or both, as well as accomplices, for a corporate crime.
The implementation of criminal (primary or additional) and other disciplinary penalties on corporations is regulated as follows:
Laws on corporate crimes and liability have previously been enacted, including:
Before Regulation 13/2016 was enacted, a Supreme Court decision (936 K/Pid.Sus/2009) was case law. This decision declared that the respective corporation was guilty of committing continuous corruption and imposed primary and additional penalties on it in the form of:
For further information on this topic please contact Kevin Omar Sidharta at Ali Budiardjo, Nugroho, Reksodiputro by telephone (+62 21 250 5125) or email (firstname.lastname@example.org). The Ali Budiardjo, Nugroho, Reksodiputro website can be accessed at www.abnrlaw.com.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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