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Corporate Criminal Liability Under the New Criminal Code and Its Implications for Intellectual Property Rights Governance
ADOLF_PHOTO2

Adolf M Panggabean

New Creminal Code Intellectual Property

The enactment of Law Number 1 of 2023 on the Criminal Code (“New Criminal Code” or UU KUHP) marks a fundamental shift in corporate criminal liability by recognizing corporations as direct subjects of criminal law. This change has significant implications for Intellectual Property (“IP”) governance, as IP infringements often arise within day-to-day business operations. The UU KUHP expands the scope of corporate liability, clarifies who may be held accountable, and lowers the threshold for enforcing liability against corporate entities. Consequently, businesses face heightened exposure and must adopt preventive, well-documented IP compliance systems to mitigate criminal risk and ensure sustainable operations. 


The forthcoming implementation of UU KUHP in January 2026 marks a new phase in Indonesia’s criminal law landscape. The law introduces a fundamental shift in the framework governing corporate criminal liability. Under the UU KUHP, corporations are recognized as subjects of criminal law and can be held directly accountable for criminal acts. 

Under the previous Criminal Code, corporations could indeed be subject to criminal acts; however, criminal liability was directed at directors or other individuals acting in the corporation’s interests. As a result, with respect to IP governance, law enforcement authorities faced challenges in holding corporations directly accountable even when the IP infringement occurred within business operations and generated commercial benefits. These provisions have now been amended. Under Chapter XXVIII, Article 49 of the UU KUHP, the corporation itself, as a legal entity, can be held directly criminally liable. 

The implications are particularly significant in the context of IP governance, as IP infringement can occur during day-to-day business operations, whether intentionally, due to negligence, or as a consequence of weak internal oversight. 

Why IP is Relevant to Corporate Liability in the New Criminal Code 

IP infringement within corporate operations can take various forms. For instance, within the scope of copyright, an employee might download and use unlicensed software to expedite their work. Although this action occurs without management knowledge, it still occurs within the business context and yields operational benefits for the company. 

Within the scope of trademarks, IP infringement often occurs when a company markets or distributes products that incorporate trademark elements that are identical or substantially similar to another party’s registered trademarks without proper authorization. A similar situation also occurs with patents, for example, when a company produces goods using patented technology without a license or permission from the rights holder. Industrial design infringement can likewise occur when a company produces goods with designs that are identical to or substantially similar to registered industrial designs, without the consent of the registered design holder. 

Trade secret infringement is equally relevant. This may arise when an employee takes or uses a competitor’s confidential business information for the benefit of their company, despite being bound by confidentiality obligations. Collectively, these examples of violations illustrate that IP-related risks are deeply intertwined with a company’s daily activities. 

With the explicit recognition of corporations as subjects of criminal law under the UU KUHP, the central questions in IP enforcement are no longer limited to only identifying the individual perpetrator. Instead, the questions now include: Did the company benefit from the violation? Did it allow the violation to occur? Has it taken reasonable preventive measures to avoid such a violation? 

The obligation to prevent infringement is crucial in IP governance: companies are required not only to have written policies but also to demonstrate that these policies are implemented through effective supervision, including the prevention and monitoring of potential violations that could lead to criminal acts. 

Corporate Responsibility Provisions 

Further explanation of corporate liability provisions is provided in Articles 46 and 47 of the UU KUHP, which expands the definition of criminal actors. Corporate crimes can be committed by: 

  1. Corporate officers who have functional positions in the organizational structure; 
  2. Individuals acting under an employment relationship; 
  3. Individuals acting based on other relationships who have the capacity to act for and on behalf of the corporation or in its interests; 
  4. Order givers; 
  5. Control holders; or 
  6. Beneficial owners who are outside the organizational structure but have the ability to direct or influence corporate actions. 

This means that, under the UU KUHP, the scope of “corporate criminal actors” is broad and encompasses various parties who can influence corporate conduct. 

Meanwhile, criminal liability for corporate actions can be imposed on:1

  1. The corporation itself; 
  2. Administrators who have functional positions; 
  3. Order givers; 
  4. Control holders; and/or 
  5. Beneficial owners of the corporation. 

This is where a significant shift in corporate criminal law lies. Corporations, as entities, can be criminally liable regardless of whether the criminal act is committed by directors, employees, related parties, ordering parties, controlling parties, or beneficial owners. This means that criminal penalties can be imposed on the corporation, while fines and imprisonment can be imposed to directors, or on both the corporation and the individuals, depending on the role and involvement of each party. 

The next question, of course, is: when can a corporation be held criminally liable for criminal acts, including IP infringements? The answer is found in Article 48 of the New Criminal Code. A corporation can be criminally liable if: 

  1. a crime is committed within the scope of its relevant business activities; 
  2. a crime provides benefits to corporations in an unlawful manner; 
  3. a crime is recognized as corporate policy; or 
  4. corporations do not take the reasonable preventive measures. 

The last point regarding the obligation to prevent is a crucial element in IP governance. This article requires corporations not only to have a compliance policy but also to demonstrate that it is effectively implemented through prevention mechanisms, supervision, training, and documentation. In other words, failure to establish an IP compliance system can be grounds for criminal prosecution. 

Sanctions for Criminal Acts by Corporations 

Forms of criminal sanctions for corporations include: 

  1. Criminal fines, which are the primary form of sanctions for corporations.2
    Unless a specific minimum is specified, the minimum fine under the New Criminal Code is Rp 50,000.00.3  The maximum fines are divided into eight categories, each with a different value, as follows:4

    Fine Category  Amount of Fine 
    Category I  Rp1,000,000.00 
    Category II  Rp. 10,000,000.00 
    Category III  Rp. 50,000,000.00 
    Category IV  Rp200,000,000.00 
    Category V  Rp. 500,000,000.00 
    Category VI  Rp2,000,000,000.00 
    Category VII  Rp. 5,000,000,000.00 
    Category VIII  Rp. 50,000,000,000.00 
  2. Additional sanctions, consisting of:5 

    a.payment of compensation;  g. announcement of court decisions; 
    b. correction of criminal acts;  h. revocation of certain permits; 
    c. delayed fulfillment of legally mandated obligations;  i. permanent prohibition from carrying out certain acts; 
    d. fulfillment of customary obligations;  j. closure of all or part of business premises and/or corporate activities; 
    e. job training financing;  k. freezing of all or part of the corporation’s business activities; and 
    f. confiscation of goods or profits obtained from criminal acts;  l. dissolution of a corporation 


    The variety of sanctions demonstrates that the risks companies face is not only financial but also affect operational continuity and business reputation. 

What This Means for Businesses: Legal & Operational Implications 

The UU KUHP introduces a two-sided implication for IP enforcement. From the perspective of law enforcement authorities, the law provides a clearer and more direct basis for holding companies liable, as IP infringement committed in the course of business, generating commercial benefit, or reflecting weaknesses in internal oversight, can now be attributed directly to the corporation. From the corporate perspective, however, this expanded enforcement increases exposure, as companies may face criminal liability even when IP infringement arises from isolated employee conduct carried out without the management’s knowledge.   

Thus, the implementation of the UU KUHP requires companies to comprehensively review and strengthen their IP governance. Companies can no longer rely on a reactive approach. Compliance systems must shift toward preventative risk management: identifying potential violations early, ensuring that all use of IP is based on legitimate rights and valid permits, implementing consistent internal controls, and providing adequate training for all employees. Compliance documentation is crucial not merely as an administrative procedure but also as concrete evidence that the company has implemented preventive measures. 

We are keen to monitor how the enactment of the UU KUHP will impact developments in IP compliance in Indonesia. We stand ready to assist companies in navigating these regulatory changes. 

For consultations on risk mitigation and strengthening of IP compliance systems, contact ADCO Law’s Intellectual Property Team. 

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About ADCO Law:

ADCO Law is a law firm that offers clients a wide range of integrated legal services, including commercial transactions and corporate disputes in a variety of industry sectors. Over the course of more than a decade, we have grown to understand our clients’ industries and businesses as well as the regulatory aspects. In dealing with business dynamics, we provide comprehensive, solid legal advice and solutions to minimize legal and business risks.

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