Dealing with Illicit Enrichment: What Indonesia Might Learn from U.S.
| Author | Laras Susanti |
| Position | Fakultas Hukum Universitas Gadjah Mada, Yogyakarta, Indonesia |
| Pages | 41-97 |
e Indonesian Journal of International & Comparative Law
ISSN: 2338-7602; E-ISSN: 2338-770X
http://www.ijil.org
© 2015 e Institute for Migrant Rights Press
41
Note. is article is based my master’s research under the supervision of Professor Scott
Schumacher at University of Washington Law School (Spring 2014). Additionally, I
worked with Professor Elizabeth Baldwin over the Summer in polishing this article. I
would like to thank both of them for their best eorts supervising me.
DEALING WITH ILLICIT ENRICHMENT
WHAT INDONESIA MIGHT LEARN FROM THE U.S.
LARAS SUSANTI
Fakultas Hukum Universitas Gadjah Mada, Yogyakarta, Indonesia
E-mail: larassusanti@gmail.com
In recent years, the international community has come to recognize the power
of investigating illicit enrichment by adopting some regional and international
conventions. As for state response, for example, Indonesia deals with illicit
enrichment by requiring public ocials at certain levels to submit nancial
disclosure statements to the Corruption Eradication Commission (KPK) whose
ndings on the statements may be used to strengthen the evidence in corruption
prosecutions. In fact, there is no civil and criminal sanction for failing to submit
or giving false information. As a result, only a few public ocials obey and submit
the statements. Additionally, it has been noticed, the KPK lacks a method of
tying the evidence on those statements to corruption oenses. is article draws
from the U.S. approach where it does not criminalize public ocials for illicit
enrichment, but it integrates tax evasion and nancial disclosure investigations,
and in many cases, it leads to corruption convictions. Finally, this article
recommends that Indonesia should avoid criminalizing illicit enrichment, and
instead establish civil and criminal prosecution of nancial disclosure system
violations for failing to le and/or providing false information, and integrate
tax and corruption investigations by incorporating indirect methods of proof for
illicit enrichment investigations that may nd evidence to strengthen corruption
prosecutions.
Keywords: Corruption, Tax Evation, Financial Crimes, Law Enforcement,
Criminal Law.
The Indonesian Journal of International & Comparative Law Volume II Issue 1 (2015) at 41–97
Laras Susanti
42
I. INTRODUCTION
Corruption, as a type of white collar crime, has been evolving into an in-
creasingly sophisticated enterprise, rendering direct evidence hard to dis-
cover through any existing legal apparatus. e international community
has responded to this situation by proposing that governments look to il-
licit enrichment of public ocials as a “yellow ag” that a corrupt oense
has happened. For instance, the Inter-American Convention Against
Corruption (hereinafter: IACAC) requires signatory parties to criminalize
illicit enrichment.1 Meanwhile, the United Nations Convention Against
Corruption (hereinafter: UNCAC) provides a non-mandatory provision
for signatory states to consider criminalizing illicit enrichment of public
ocials.2 ere have been varied responses from signatory parties.3 While
a number of countries have enacted domestic laws to criminalize illic-
it enrichment, such as Argentina,4 India,5 the Arab Republic of Egypt,6
1. Organization of American States, Inter American Convention Against Corruption,
art. IX, March 29, 1996, reprinted in35 I.L.M. 724(1996), available at http://
www.oas.org/juridico/english/treaties/b-58.html [hereinafter IACAC].
2. United Nations Convention Against Corruption, Dec. 14, 2005, 2349 U.N.T.S
41, available at http://www.unodc.org/documents/treaties/UNCAC/Publications/
Convention/08-50026_E.pdf [hereinafter UNCAC].
3. ere has been a debate whether signatory parties have to criminalize illicit
enrichment due to possibility in conict with human rights law standards of fair
trial. Nelly Gacheri Kamunde, e Crime of Illicit Enrichment under International
Anti-Corruption Legal Regime, K L, http://kenyalaw.org/kl/index.
php?id=1891 (last visited Dec. 15, 2014).
4. Código Penal [Cód. Pen.] [Criminal Code], art. 268 (2) (Abeledo Perrot, Buenos
Aires, 1971) (Arg.). See L M , O T: C
I E F C 26(2012).
5. e Prevention of Corruption Act, No. 49 of 1988, art. 13, availabe at http://
www.persmin.gov.in/DOPT/EmployeesCorner/Acts_Rules/PCAct/pcact.pdf
(Last visited Oct. 6, 2014) (India) [hereinafter e India Prevention of Corruption
Act]. Illicit enrichment rst was introduced as an evidentiary measure rathen than
a crime pursuant to Section 5(3) of the Prevention of Corruption Act. As the law
has been amended in 1988, Article 13 (1) recognizes that “a public servant is said
to commit the oense of criminal misconduct if he or any person on his behalf is
in possession or has, at any time during the period of his oce, been in possession
for which the public servant cannot satisfactorily account, of pecuniary resources
or property disproportionate to his known sources of income. is oense is also
punishable with a minimum imprisonment of one year, extendable up to seven
years, and also with a ne.”
6. e Arab Republic of Egypt Illegal Enrichment Law No. 62: Executive Regulations
Laras Susanti
Dealing with Illicit Enrichment: What Indonesia Might Learn from the U.S.
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Jordan,7 Sierra Leone,8 China,9 Brazil10 and Senegal, 11 others have es-
tablished alternative systems to address this issue, such as the U.S., and
Canada. is article examines the latter.
Indonesia does not criminalize illicit enrichment of public ocials.
Nevertheless, Law of the Republic of Indonesia No. 31 of 1999 add. No.
—Presidential Decision No. 1112, see L C, available at http://
www.undp-aciac.org/resources/ac/legal.aspx?lc=1 (Last visited Oct. 6, 2014)
[hereinafter Egypt Illegal Enrichment Law].
7. Jordan Illicit Enrichment Law, Number 21 for 2014. e Illicit Enrichment
Law number 21 for 2014, was published in the Jordanian of ocial gazette on 8
May 2014 and is formed of 23 articles, available at http://www.undp-aciac.org/
resources/ac/legal.aspx?lc=1 (Last visited Oct. 6, 2014)
8. Sierra Leone Anti-Corruption Act 2008, Part IV, Oenses, available at http://
www.sierra-leone.org/Laws/2008-12.pdf (Last visited Oct. 6, 2014).
9. China, Criminal Law 1997 (Adopted by the Second Session of the Fifth National
People’s Congress on July 1, 1979 and amended by the Fifth Session of the Eighth
National People’s Congress on March 14, 1997), art. 395, http://www.fmprc.
gov.cn/ce/cgvienna/eng/dbtyw/jdwt/crimelaw/t209043.htm (last visited Oct. 6,
2014). Article 395 states as follows:
When the property or expenses of state functionaries clearly exceed their
legitimate income, when the dierence is huge, they shall be ordered to explain
the sources of their property. When state functionaries fail to explain the
legitimacy of their property, that part of property shall be considered an illegal
income, and they themselves shall be sentenced to not more than ve years of
xed-term imprisonment or to criminal detention, and the dierence must be
handed over to the state.
State functionaries who have savings deposits in foreign countries must
declare their deposits according to state provisions. ose who hide their
deposits of this nature by not declaring them are to be sentenced to not more
than two years of xed-term imprisonment or to criminal detention; when the
circumstances are not serious, they shall be given administrative punishment
by the unit to which they belong or by a competent organ of a higher level
according to the circumstance.
10. e Brazil Law No. 8.429, 1992 (Against Corruption and Illicit Enrichment),
see International Center Asset for Recovery, http://www.assetrecovery.org/kc/
node/1b254788-ce91-11dc-a121-7b1bef83de13.0;jsessionid=B95987F32A9864
61DFA67F5B8665FBF6 (last visited Oct. 6, 2014).
11. M , supra note 4.
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