Indonesia legislature prepares unexplained wealth confiscation law

Thursday, 03 August 2023
Indonesia's government and legislative assembly are collaborating on a Bill for the confiscation of assets related to criminal actions.
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The initiative is prompted partly by public reaction to a series of cases involving state officials said to be living in luxury beyond their means, according to law firm Makarim & Taira S. Another factor is the Financial Action Task Force's (FATF’s) publication of a mutual evaluation report in April 2023, urging the jurisdiction to improve its record in prosecutions, confiscations and recovery of the proceeds of crime. Indonesia should ‘ensure that it permanently deprives criminals of the proceeds of their crimes, particularly assets located abroad or assets from forestry or environmental crime', said the FATF report.

Assets confiscation is currently a 'legal void' in Indonesia's criminal justice system, according to Makarim. The Bill specifies that confiscation can be imposed on a wide range of assets, including those derived from the proceeds of crime or obtained directly or indirectly from criminal actions, even if they have been granted or converted into personal wealth, capital, income or any other economic profit for oneself, others or corporations. Confiscation orders can also be sought for assets 'known, presumed or used for conducting criminal actions', owned by the perpetrator of a criminal action as replacements for assets already forfeited, classified as found items 'known or presumed to originate from criminal action' or constituting seized goods obtained from or used in criminal actions.

Moreover, the Bill allows for the confiscation of assets that are 'disproportionate' to the declared income or any other lawful sources of wealth, provided they can be presumed to be related criminal assets obtained since the enactment of the Bill. However, confiscation orders will be limited to assets with a minimum value of IDR100,000,000 or those related to criminal actions punishable by imprisonment of four years or more.

The legal actions for assets confiscation are directed against the assets themselves, not the individuals, and are not contingent on the conviction on the perpetrator of the criminal action. However, the authorities will have to prove certain conditions before applying for forfeiture, namely that the criminal case cannot proceed to trial because the suspect or the accused is deceased, has fled, is permanently ill, has been acquitted of all criminal charges or their whereabouts are unknown. Alternatively, confiscation can be sought where the accused has been found guilty based on a final and binding court decision and it is subsequently discovered that there are additional criminal assets that have not been confiscated.

The investigating authorities will have far-reaching powers to trace the assets, with rights to request documents from any parties, government institutions or related institutions. The requested party must comply with such a request. In the event of refusal to comply, investigators will be able to use search and seizure or 'blocking' powers to freeze the assets. To seize the assets the state attorney must present a petition to the relevant district court and the person accused will have the right to submit a rebuttal. If the forfeiture petition is allowed, the accused will have a right of appeal.

However, the Bill provides legal remedies only for parties who are aware of the actions taken against their assets. It is unclear whether a party who only learns of the confiscation after a court decision has been issued has any remedy, says Makarim.

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