Changes in Indonesia’s Criminal Law
The new Criminal Code (KUHP) and Criminal Procedure Code (KUHAP) introduce fundamental changes affecting IP protection and enforcement strategy.
Two landmark pieces of legislation; the new Criminal Code (KUHP Baru, Law No. 1/2023) and the new Criminal Procedure Code (KUHAP Baru, Law No. 20/2025), together represent a thorough update of both substantive criminal law and procedural rules.These reforms carry direct implications for multinational corporations, rights holders, and businesses operating in Indonesia.
Our blog will go through the key changes and their practical significance for corporate compliance and intellectual property enforcement.
Part I: The New Criminal Code (KUHP)
Why Indonesia Needed a New Criminal Code
Indonesia’s previous Criminal Code was a colonial-era inheritance from the Dutch, dating back to the Wetboek van Strafrecht of 1915. The new KUHP addresses three fundamental objectives: decolonising Indonesian criminal law, adopting a more humanistic and modern approach to punishment emphasising corrective and restorative justice, and ensuring consistent law enforcement across the country.
Core Philosophy: Punishment as Last Resort
The new KUHP positions criminal sanctions as ultimum remedium; a last resort. Key changes include removing prison terms for minor offences (pidana kurungan) and replacing them with fines. The death penalty is now applicable only for extraordinary crimes (terrorism, narcotics trafficking, corruption, and big-scale human rights violations) and must always be offered as an alternative to life imprisonment or 20-year maximum sentences. Mandatory minimum sentences have been eliminated for most offences outside specific categories.
The Dual-Track System
The new KUHP introduces a dual-track sanctioning system distinguishing between criminal penalties (pidana), which are retributive and imperative in nature, and action sanctions (tindakan), which are corrective and rehabilitative. Judges may impose either or both, depending on the circumstances.
Principal penalties under Article 65 include: imprisonment, closed detention (pidana tutupan), supervised release (pidana pengawasan), fines, and community service. Judges are encouraged to prioritise lighter penalties where the purposes of sentencing can still be achieved.
Supplementary penalties under Article 66 include: revocation of specific rights, forfeiture of goods or claims, publication of court decisions, compensation payments, revocation of specific permits, and fulfilment of local customary obligations.
Action sanctions under Article 103 include counselling, rehabilitation, vocational training, institutional care, and remediation of harm caused.
Standardised Fine Categories
Article 79 establishes eight standardised fine categories, replacing the previous ad hoc system:
| Category | Maximum Fine (IDR) | Approximate USD |
| Category I | 1,000,000 | ~63 |
| Category II | 10,000,000 | ~630 |
| Category III | 50,000,000 | ~3,150 |
| Category IV | 200,000,000 | ~12,600 |
| Category V | 500,000,000 | ~31,500 |
| Category VI | 2,000,000,000 | ~126,000 |
| Category VII | 5,000,000,000 | ~315,000 |
| Category VIII | 50,000,000,000 | ~3,150,000 |
Note: Judges are encouraged to consider the defendant’s income and expenditure when imposing fines (Article 80). Fine amounts may be adjusted by Government Regulation to reflect currency changes.
Corporate Criminal Liability
Articles 145 and 146 could formally recognise corporations as criminal subjects; a significant departure from the previous framework that focused primarily on individual directors. The new KUHP applies strict liability principles: corporate offences focus on the conduct and outcomes that benefit the corporation.
Corporate sanctions include:
- Principal penalty: Fines (Article 119)
- Supplementary penalties (Article 120), covering compensation, licence revocation, business suspension, and corporate dissolution
Liability may extend to officers with functional positions, persons giving orders, controlling parties, and beneficial owners (Article 48). Critically, companies must demonstrate comprehensive preventive measures to avoid being deemed to have “permitted” criminal conduct.
Prevention: What Corporations Should Do
Article 48 of the new KUHP highlights how corporate governance, compliance systems, and preventive measures is important in assessing corporate criminal liability. Companies should consider:
1.Good Corporate Governance (GCG): Implement systems that ensures transparency, accountability, and effective oversight at board and management levels.
2.Policy review and updates: Regularly review internal policies including anti-bribery, anti-corruption, whistleblowing mechanisms, ESG compliance, and data protection to ensure alignment with current regulations.
3.Clear SOPs: Establish enforceable Standard Operating Procedures with well-structured reporting lines and mechanisms, eliminating ambiguity in responsibility and decision-making authority.
4.Internal audit and monitoring: Strengthen internal audit, compliance, and monitoring functions, including periodic risk assessments and independent reviews to detect potential irregularities early.
Impact on IP Sectoral Laws
The new KUHP functions as lex generalis for IP criminal offences, which remain governed by their respective sectoral laws (Copyright, Trademarks, Patents, Industrial Design).
However, the KUHP’s general provisions on criminal subjects, types and alternatives of punishment, sentencing guidelines, and restorative justice now apply to IP offences.
The Penal Adjustment Law harmonises existing IP criminal provisions with the new framework. Key changes include: cumulative imprisonment-and-fine sentences are now cumulative-alternative (judges may impose either or both). Fine amounts in sectoral laws are automatically adjusted to correspond with the new fine categories based on the maximum imprisonment term.
Fine category correlation with imprisonment terms:
| Maximum Imprisonment | Fine Category |
| Up to 1 year | Category II (IDR 10 million) |
| 1–3 years | Category III (IDR 50 million) |
| 3–5 years | Category IV (IDR 200 million) |
| 5–8 years | Category V (IDR 500 million) |
| 8–11 years | Category VI (IDR 2 billion) |
| 11–15 years | Category VII (IDR 5 billion) |
| Over 15 years | Category VIII (IDR 50 billion) |
For the most serious trademark offence; using a counterfeit mark that causes harm to health, the environment, or results in death under Article 100(3) of Law No. 20/2016 on Marks and Geographical Indications, the maximum imprisonment remains at 10 years.
The critical change lies in corporate liability: previously, only individual directors could be prosecuted for IP crimes. Under Articles 145–146 of the new Criminal Code (Law No. 1/2023), corporations may now be held directly liable as criminal subjects, facing fines up to Category VIII (IDR 50 billion) and supplementary penalties under Article 120 including licence revocation, business suspension, or corporate dissolution.
For businesses engaged in counterfeiting operations, this expanded liability framework represents a substantially stronger deterrent than the previous law.
Part II: The New Criminal Procedure Code (KUHAP)
Law No. 20/2025 modernises criminal procedure to complement the new Criminal Code, strengthening human rights protections while providing clearer frameworks for enforcement actions.
Expanded Coercive Measures
The new KUHAP formally recognises nine categories of coercive measures (upaya paksa) under Articles 1(14) and 89:
- Suspect designation – Now requires minimum two pieces of evidence
- Arrest – Enhanced procedural safeguards
- Detention – Revised duration limits and suspension procedures
- Search – Expanded to include electronic information and documents
- Seizure – Clarified proportionality limits
- Wiretapping – Explicitly regulated for investigative purposes
- Mail examination – Updated for electronic communications
- Asset blocking – New provisions allowing temporary freezing of assets for up to two years
- Travel ban – Formal mechanism restricting suspects from leaving Indonesia
Pre-Trial and New Resolution Mechanisms
The pre-trial (praperadilan) mechanism has been significantly expanded. Courts may now review the validity of all coercive measures, not just arrest and detention. Critically, main trial proceedings cannot commence until pre-trial examination is complete. Evidence obtained through invalid procedures is inadmissible.
Plea bargaining (pengakuan bersalah) is now available for first-time offenders facing maximum five-year imprisonment or Category V fines, provided they agree to pay compensation. Restorative justice mechanisms are available from investigation through post-adjudication stages, enabling case termination when parties reach settlement. Deferred Prosecution Agreements (DPA) are now available for corporate defendants.
Enhanced Rights Protections
The new KUHAP consolidates and expands rights for all parties. Suspects and defendants receive 17 explicit rights under Article 142, including the right to be informed of their rights, apply for restorative justice, and claim compensation for unlawful coercive measures. Victims (including IP rights holders) benefit from these provisions. Advocates may now accompany clients at all examination stages, including during investigation, a significant imrprovement from previous practice.
Crown Witness Mechanism
The new KUHAP introduces a formal crown witness (saksi mahkota) framework. Investigators may designate cooperating defendants under written agreements specifying testimony scope, conditions, charges, and incentives. Incentives may include exemption from death penalty or life imprisonment, sentence reductions of up to two-thirds, or supervised sentences for offences carrying less than seven years imprisonment.
Part III: Practical Implications for IP Enforcement
The combined effect of the new KUHP and KUHAP creates both opportunities and obligations for businesses pursuing IP enforcement in Indonesia:
Evidence standards: Suspect designation and arrest now require minimum two pieces of evidence. Rights holders should ensure comprehensive evidence packages before filing criminal complaints.
Corporate infringers: Corporations may now be prosecuted directly, with sanctions including substantial fines (up to Category VIII), licence revocation, business suspension, and even dissolution for serious offences.
Alternative sentencing: Judges must prioritise lighter penalties where sentencing purposes can be achieved. Fines are now more prominent, and cumulative imprisonment-and-fine sentences are cumulative-alternative.
Asset blocking: New formal procedures enable temporary blocking of counterfeit goods and proceeds of infringement, subject to court approval.
Alternative resolution: Restorative justice and plea bargaining may offer faster resolution paths where commercial settlement serves business objectives.
Procedural compliance: With evidence from invalid procedures now inadmissible, proper coordination with authorities throughout enforcement actions is essential.
Transitional Provisions
The transition between old and new law follows specific rules. For substantive criminal law (KUHP), the new Code applies unless the old law is more favourable to the defendant (lex favor reo). For procedural law (KUHAP), the old procedures generally apply to cases where investigation or prosecution has already commenced, while new procedures apply to new matters and trials that have not yet begun.
Looking Ahead
Indonesia’s criminal law reform marks a shift toward humanistic and restorative approaches, while strengthening procedural protections. For businesses, the focus on corporate liability, compliance, and prevention creates both obligations and opportunities.
Companies should review their governance frameworks, compliance policies, and enforcement strategies accordingly. Working with IP esperts is essential to address the changes effectively.
Contact our team at enquiries@skclaw.id to discuss how these changes may affect your business.
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This content is provided for general information only and does not constitute legal advice. For advice on specific matters, contact enquiries@skclaw.id.
