2026 Legal Recondition: The Essential Impact of the New National Criminal Code on the Business Sector
Starting in 2026, Law Number 1 of 2023 concerning the Criminal Code (“National Criminal Code”) will come into force, replacing the previous Dutch colonial-era laws. This change will significantly impact not only the general public but also corporations, which in this case must pay close attention to the regulatory adjustments introduced under National Criminal Code.
In this regard, National Criminal Code expands the concept of criminal subjects, which previously referred only to “individuals” to now include “individuals and corporations.” Accordingly, once National Criminal Code become fully effective, it can be concluded that:
- There is potential for an increase in corporate criminal prosecution; and
- There is an opportunity for greater legal certainty in the law enforcement process concerning corporate crimes.
The explanation of these points is outlined as follows:
A. Corporate Criminal Liability
The previous Criminal Code, Wetboek van Strafrecht (“WvS”), did not regulate corporate criminal liability. However, National Criminal Code now provides comprehensive provisions on this matter, which include:
| Issue | WvS Criminal Code | National Criminal Code |
|---|---|---|
| Strict Liability | Not regulated | Article 37(a) introduces criminal liability without fault. |
| Basis of Corporate Criminal Liability | Does not regulate corporations. Enforcement is carried out only through sectoral laws (Environmental Law, Food Law, Consumer Protection Law, Anti-Corruption Law, etc.) | Articles 45 to 50 regulate definitions, criteria of corporate acts, and parties deemed to represent the corporation. |
| Management Liability (Vicarious Liability) | Not regulated | Articles 46 and 47 provide that actions of directors, employees, or controlling persons may be attributed to the corporation. |
| Corporate Criminal Responsibility | Not regulated | Articles 48 to 50 regulate the basis for corporate punishment, parties that may be held liable, and the application of justification and excuse defenses for corporations. |
| Sanctions Against Corporations | Not regulated | Articles 118 to 122 set out principal and additional penalties applicable to corporations. |
These broad and diverse sanctions demonstrate that corporations face significant threats under the new criminal liability regime, both in the form of financial risks, such as obligations to pay compensation or seizure of profits and operational risks, including suspension of business activities, revocation of licenses, closure of business premises, and even dissolution. Reputational impact is also inevitable, particularly when court decisions are publicly announced, generating pressure from both the public and regulators.
To mitigate these risks, corporations must build a robust compliance system through periodic compliance audits, the implementation of strict procedures in high-risk areas, effective internal oversight, and the provision of safe whistleblowing channels for employees. Strengthening a culture of compliance through continuous training is an essential part of prevention efforts. These measures not only reduce the likelihood of violations but also demonstrate the corporation’s good faith should law enforcement proceedings arise.
B. Types of Corporate Criminal Sanctions
The types of criminal offenses against corporations are regulated in Articles 118 to 122 of the National Criminal Code, which include Principal Offenses and Additional Offenses. The National Criminal Code classifies Principal Offenses in Article 119, which includes Criminal Fines. As classified:
a. Criminal Fines
In imposing Criminal Fines, the National Criminal Code formulates them into a category system. As stipulated in Article 79 of the National Criminal Code, there are eight levels of fines ranging from Category I of IDR 1,000,000,- (one million Rupiah) to Category VIII of IDR 50,000,000,000,- (fifty billion Rupiah). This category approach is intended to provide clear maximum limits for fines for various criminal offenses and to facilitate adjustments in the event of changes in economic and monetary conditions. The categorization as stipulated in Article 79 of the National Criminal Code is as follows:
| Categories | Maximum Penalty |
|---|---|
| I | Rp1.000.000,- (one million Rupiah) |
| II | Rp10.000.000,- (ten million Rupiah) |
| III | Rp50.000.000,- (fifty million Rupiah) |
| IV | Rp200.000.000,- (two hundred million Rupiah) |
| V | Rp500.000.000,- (fifth hundred million Rupiah) |
| VI | Rp2.000.000.000,- (two billion Rupiah) |
| VII | Rp5.000.000.000,- (fifth billion Rupiah) |
| VIII | Rp50.000.000.000,- (fifty billion Rupiah) |
The criminal penalty of a fine as stipulated in Article 121 paragraph (1) of the National Criminal Code imposed for corporate crimes is at least Category IV, amounting to IDR 2,000,000,000,- (two billion rupiah), unless otherwise specified by law. Furthermore, Article 121 paragraph (2) regulates the penalties in the event of:
- Imprisonment for less than 7 (seven) years, maximum fine for corporations is Category VI amounting to Rp2.000.000.000,- (two billion Rupiah);
- Imprisonment for a maximum of 7 (seven) years to a maximum of 15 (fifteen) years, with a maximum fine for corporations in Category VII of Rp5.000.000.000,- (five billion Rupiah); or
- Death penalty, life imprisonment, or imprisonment for a maximum of 20 (twenty) years, with the maximum fine for corporations being Category VIII, amounting to Rp50.000.000.000,- (fifty billion Rupiah).
b. Additional Penalties
As stipulated in the National Criminal Code, additional penalties for corporations are regulated in Article 118 letter b Jo. Article 120 of the National Criminal Code, which covers various forms of sanctions, ranging from payment of compensation, remedial measures for criminal acts, fulfillment of neglected obligations, fulfillment of customary obligations, financing of job training, confiscation of goods or profits obtained from criminal acts, announcement of court decisions, revocation of certain licenses, permanent prohibition of certain acts, closure of all or part of a business, freezing of part or all of business activities, to dissolution of the corporation.
These categories of sanctions reflect that the corporate punishment regime under National Criminal Code is not solely punitive but also aims at restoration, prevention, and behavioral change within the corporation. Through these diverse instruments, judges are afforded flexibility to impose sanctions proportionate to the degree of fault, the impact of the offense, and the benefits obtained by the corporation from the criminal act. Moreover, the combination of principal and additional penalties enables the court to conduct a comprehensive assessment of the corporation’s internal conditions, level of compliance, and preventive measures that have been or should have been implemented. Accordingly, this framework reinforces the principle that corporations are not merely legal subjects capable of being punished, but entities responsible for ensuring sound governance to prevent criminal conduct.
Conclusion
The entry into force of National Criminal Code in 2026 brings significant changes to criminal law, particularly for the corporate sector in Indonesia. These regulations clearly designate corporations as subjects of criminal liability, extend responsibility to executives, controlling persons, and beneficial owners, and introduce more comprehensive mechanisms for investigation and inquiry. The types of sanctions applicable to corporations are now far broader and more serious, ranging from financial burdens to operational and reputational risks. In light of these changes, corporations must strengthen their compliance systems, governance structures, and internal oversight to prepare for a more stringent and structured enforcement regime.
We hope this overview of the new National Criminal Code and its comparison with the previous one provides some understanding. Should you require further legal inquiries or legal assistance, our team is ready to support you. Please contact us at proalliance.id or directly to our Director [email protected]
We also would like to thanks and welcome our new Trainee Lawyer Geby, Hutomo, and Bianca who have diligently research the matter and write this newsletter as part of their ongoing contribution to the firm.
