Criminal Penalty Adjustment for Corporations in Law 1 of 2026
Law 1 of 2026 took effect on 2 January 2026 and adjusts criminal penalties outside the Criminal Code. Confinement becomes a fine, fines use categories, and special minimum penalties are removed except for certain crimes.
Key points
- A sole fine on a corporation is at most category V, or category VIII where the offence produces a financial gain.
- Regional regulations may only carry fines of at most category III.
Law 1 of 2026 on Criminal Penalty Adjustment took effect on 2 January 2026, the same day as the new Criminal Code. It aligns criminal provisions in other laws and regional regulations with the Code.
Main changes
Article I(1) removes special minimum penalties in laws outside the Code. Paragraph (2) excepts gross human rights violations, terrorism, corruption and money laundering.
Article II(1) replaces confinement with fines: under 6 months becomes a fine of at most category I, and 6 months or more becomes at most category II.
Article II(2) sets sole fines. An individual faces at most category II, and a corporation at most category V.
Where the offender may be a person or corporation and the offence produces a financial gain, the limits are category IV for a person and category VIII for a corporation. Where it produces no financial gain, the limits are category III and category V.
Article II(5) changes cumulative prison and fine penalties to cumulative-alternative, with the fine following the prison term. Paragraph (6) excludes point a of that paragraph for the offences named in Article I(2).
Category values
Article 79(1) of the Criminal Code sets category I at Rp1,000,000, category II at Rp10,000,000, category III at Rp50,000,000, category IV at Rp200,000,000, category V at Rp500,000,000, category VI at Rp2,000,000,000, category VII at Rp5,000,000,000 and category VIII at Rp50,000,000,000.
Regional regulations
Article IV lowers penalties in regional regulations: confinement becomes a fine, and fines above category II become at most category III. Articles V and VI provide that regional regulations may in future carry only fines of at most category III.
What to check
Attachment I sets out changes by law and is not covered here. Legal teams should check the laws for their sector in that attachment, then update risk matrices and contract clauses that still cite old penalties.
The link with investigative audits is covered in the Indonesian article on evidence under the 2025 Criminal Procedure Code.
Frequently asked questions
Do fines in the tax laws change too?
Article II(7) excludes fines set as a multiple of loss or gain from paragraph (5). Details by law are in Attachment I, which should be read for each provision.