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Provision Of Fraud Against Creditors Stipulated Under the New Indonesian Criminal Code

Frauds against creditors discussed in the new Indonesian Criminal Code are against a creditor who is facing bankruptcy. Before the enactment of Law No. 1 of 2023 on the Criminal Code ("New Criminal Code") of law in Indonesia, the criminal provisions in bankruptcy have been stipulated in Law No. 1 of 1946 on Criminal Regulations ("Old Criminal Code") of regulation in Indonesia. In the Old Criminal Code, the criminal provisions on bankruptcy are stipulated in Chapter XXVI under the title Acts Detrimental to Debtors or People Who Have Rights, whilst in the New Criminal Code, they are stipulated in Chapter XXVIII under the title Crime Against Confidence in Conducting a Business. The acts qualified as fraud in the New Criminal Code are still the same as stipulated in the Old Criminal Code.

For example, the fraudulent acts stipulated in Article 512 of the New Criminal Code are no different from Article 397 of the Old Criminal Code, such as:

  1. Fabricating debts, failing to account for profits or withdrawing goods from company assets;
  2. Releasing company property, either for free or at a price well below its value;
  3. Benefiting one of the creditors at the time of bankruptcy or when it is known that the bankruptcy cannot be prevented;
  4. Failing to fulfill the obligation to record everything in accordance with the laws and regulations, such as keeping and showing books, documentation and other letters.

The main difference between the Old Criminal Code and New Criminal Code concerning bankruptcy is the criminal subject. Article 513 of New Criminal Code stipulates that the corporations can also commit the crimes in Article 511 and Article 512 of New Criminal Code. Even though Article 514 or other articles related to bankruptcy do not stipulate that the corporation can do the crimes, Article 45 Paragraph (1) of New Criminal Code stipulates that a corporation is also a criminal subject. Therefore, a corporation can be held accountable for every crime that harms the creditor through fraudulent acts.

If you, a prospective client, have further inquiries regarding the topic explained above, Schinder Law Firm is one of many corporate law firms in Indonesia that has extensive experience with similar matters, with many experienced and professional civil lawyers and dispute lawyers in its arsenal, making it one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.

Author: Dewi Susanti