Corporate criminal liability is acknowledged by specific laws, especially Anti-Corruption Law and Anti-Money Laundering Law, which provide clear guidelines on when a company may be held liable on a criminal act.
Law No. 20/2001 regarding Eradication of Criminal Acts of Corruption (Anti-corruption Law) may hold corporations responsible for criminal acts of corruption. Article 20 of Anti-Corruption Law stipulates that a corporation may be held liable for corruption if the action is committed by people who, based on an employment agreement or other relationship, are acting in association with the company. A corporation found guilty of an act of corruption may be required to pay a maximum fine equal to the maximum fine for an individual plus an additional one-third on top of the said fine. In addition, individual members of the management may be held liable for criminal acts of corruption committed by the corporation.
Anti-Money Laundering Law
Law No. 8 of 2010 on the Prevention and Eradication of Money Laundering (Anti-Money Laundering Law) provides more descriptive criteria in determining a company’s liability. Article 6 (2) of the Anti-Money Laundering Law stipulates that a company may be held liable for money laundering if the crime committed meets the following criteria:
- The offense was committed or instructed by the company’s management officers.
- The offense was committed to achieve the company’s business purpose.
- The offense was committed in accordance with the duties and functions of the doer or the instructor.
- The offense was committed with the intention of benefitting the company.
In addition, the government also issued Presidential Regulation No. 13/2018 – Application of Principles Introduces Beneficial Ownership of Corporation in the Framework of Prevention and Eradication of Criminal Act of Money Laundering and Criminal Act of Terrorism Financing. The regulation, which applies equally to domestic and foreign investment companies aims to prevent and eradicate money laundering and terrorism financing through the acknowledgement of the beneficial ownership principle. Thus, the regulation is also useful for preventing and eradicating taxes crimes and can be used to eliminate the practice of nominee arrangement structures.
Presidential Regulation No. 13/2018 defines beneficial owner as an individual who:
- has the power to appoint and dismiss the board of directors, board of commissioners, administrators, supervisors or advisors of the corporation
- has the power to influence and control the corporation, receive profit and/or benefit from the corporation either directly or indirectly
- is the real owner of funds or shares of the corporation. The more specific beneficial owner criteria are set differently depending on the type of corporation
Under this regulation, the corporation shall assess itself, assign and report to the authorities related to personal information of the beneficial owner of the corporation, accompanied by supporting documents. The regulation also requires corporations to appoint an employee who is in charge of applying the principle of knowing the beneficial owner, providing and updating the beneficial owner data, and regularly reporting such information to the authorities.
In addition, the authorities also have the power to determine the beneficial owner other than those reported by the corporation. The basis of the determination can be sourced from the audit results conducted by the authorities, information provided by government institutions, databases owned by private institutions, reports from certain professions, as well as other reliable sources.
Supreme Court regulation
Indonesian Supreme Court in the end of 2016 issued Regulation No. 13/2016 regarding Procedures to Handle Criminal Acts Committed by Corporations, which stipulates that a corporation shall be represented by member(s) of its management during any investigation and subsequent court proceedings for corporate crimes. The regulation also suggests that in deciding criminal penalties for a corporation, the court may assess whether the corporation:
- Profited or benefitted from such criminal act, or whether such act was committed for the corporation’s interest;
- Allowed such criminal act to happen; and
- Failed to take necessary measures to prevent and/or minimise the impact of such criminal act, and also to ensure the compliance of the corporation with the prevailing laws and regulations to avoid such criminal act from being committed.