Indonesia Targets December Completion for the Asset Forfeiture Bill. What Is Still Being Debated?

Commission III of Indonesia’s House of Representatives is targeting the enactment of the Criminal Asset Forfeiture Bill by December 2026. The timetable was announced after dozens of public hearings, regional working visits, and written submissions from civil-society groups.

A target date does not mean the bill’s substance is final. As of September 15, 2026, lawmakers were still debating issues that will determine how the law operates, including the initial evidence threshold, forfeiture without a criminal conviction, institutional authority, third-party rights, pretrial review, asset valuation, and the management of seized property.

The central question is no longer simply whether Indonesia needs a stronger asset-recovery mechanism. Broad support exists for that objective. The unresolved question is how the state can pursue criminal proceeds without giving enforcement agencies excessive authority or taking property that was acquired lawfully.

Target and legislative stages for the Asset Forfeiture Bill through December 2026. Source: Parlementaria, Secretariat General of the Indonesian House of Representatives, August 25, 2026. 

Where Does the Bill Stand?

The Asset Forfeiture Bill remains part of Indonesia’s 2026 National Legislative Priority Programme. As of August 25, Commission III said the consultation process had included 35 public hearings, three regional visits, and written input from dozens of community groups.

The stages identified by the House include:

• Completing public consultation.

• Harmonising the bill’s language.

• Holding a working meeting with the government.

• Discussing the Problem Inventory List.

• Obtaining first-level approval.

• Holding a second-level decision in a House plenary session.

These stages matter because a bill does not become law merely because it is listed as a legislative priority or given a target date. Its provisions can still change during harmonisation, formal government discussions, and deliberation of the Problem Inventory List.

Even if the House and government approve the bill in December, implementation may require promulgation and secondary regulations. Three different statuses must therefore be separated:

• Completion target: the timetable lawmakers intend to meet.

• Legislative approval: the joint decision of the House and government.

• Implementation: the point at which provisions take effect and operational procedures become available.

As of September 16, 2026, the bill remained under deliberation. It would be inaccurate to write as though enforcement agencies already had new authority under a final law.

Why Does Indonesia Need a Specific Law?

Asset forfeiture is not entirely new to Indonesian law. Several statutes already allow the seizure and confiscation of property connected with criminal activity. These procedures, however, are generally linked to criminal proceedings against a person.

Problems arise when a suspect or defendant dies, escapes, cannot be located, resides abroad, or uses ownership structures that obscure the connection between the individual and the property.

Criminal proceedings may then stop or take years, while assets are transferred, sold, concealed, or allowed to lose value.

The Asset Forfeiture Bill seeks to strengthen an asset-focused approach. One of the concepts under discussion is non-conviction based asset forfeiture, or NCB forfeiture, which does not necessarily require a prior criminal conviction against the offender.

NCB forfeiture should not mean that authorities may take property on suspicion alone. It still requires a legal basis, initial evidence, an opportunity for owners and interested parties to challenge the action, and judicial control. The details of those safeguards remain one of the main areas of debate.

Forfeiture Without a Criminal Conviction

In an ordinary criminal case, the state first proves the defendant’s guilt. Confiscation may then follow for assets proven to be connected with the offence.

NCB forfeiture shifts the focus to the legal status of the asset. The question changes from “Is this person guilty?” to “Is this property the proceeds, instrument, or benefit of a criminal offence?”

This approach can help when an offender cannot be prosecuted. Separating the case against the person from the case against the asset, however, creates new risks.

The final law must answer questions such as:

• Under what conditions may NCB forfeiture be used?

• Is it limited to cases where the offender has died, escaped, or cannot be located?

• Can it be used while a criminal case is still pending?

• How strong must the link between the asset and the offence be?

• Which court has jurisdiction?

• What appeal or review mechanisms are available?

• How long may temporary blocking or seizure remain in place?

If the conditions are too broad, NCB forfeiture could become a shortcut that weakens property rights. If they are too narrow, the mechanism may be ineffective against assets concealed through nominees, corporate structures, family members, or cross-border transactions.

A Reversed Burden of Proof Cannot Begin with Suspicion

A reversed burden of proof is easily misunderstood as requiring every property owner to prove their innocence.

The House deliberations instead point to the need for an initial evidence threshold before an owner or controller can be required to explain the source of an asset. The state should first demonstrate a testable basis, such as:

• A material mismatch between the asset’s value and explainable income.

• Transactions linked to a specified criminal offence.

• Fund flows from an identified account or person.

• An ownership arrangement allegedly used to conceal the beneficial owner.

• Evidence that the property was converted from criminal proceeds.

Without a clear threshold, wealth growth or ownership of a valuable asset could be treated as automatic suspicion. That would weaken legal certainty and encourage inconsistent enforcement.

The evidentiary standard must also vary by stage. The information needed to begin tracing an asset should not automatically be sufficient for temporary seizure or permanent forfeiture.

Blocking, Seizure, and Forfeiture Are Different Actions

These terms are often used interchangeably, even though their legal effects differ.

• Blocking temporarily restricts the transfer or use of an asset.

• Seizure places an asset under legal control while proceedings continue.

• Forfeiture permanently transfers rights in the asset to the state following a legal process.

The distinction determines the evidence, authorisation, time limit, and review mechanism required at each stage.

Rapid blocking may be necessary to prevent funds from moving. If a block continues for too long without judicial review, however, a lawful owner may lose access to the asset. A company could be unable to pay employees, continue operations, or meet obligations to creditors.

During deliberations on September 14, 2026, Commission III highlighted the need for a clear initial threshold, judicial authorisation, time limits, and a division of responsibilities among investigators, state attorneys, courts, and asset managers.

Issues concerning institutional authority and checks and balances in the Asset Forfeiture Bill. Source: Parlementaria, Secretariat General of the Indonesian House of Representatives, report on the Commission III hearing held September 14, 2026 and published September 15, 2026. 

Who May Start the Process?

A recent debate concerns the division of authority among institutions that trace assets, file applications, issue decisions, and manage seized property.

If one institution can trace, block, seize, value, sell, and administer the proceeds, the concentration of power would be substantial. A conflict of interest could also emerge if institutional performance were measured by the value of assets taken.

A model with checks and balances could divide the functions:

• Investigators trace assets and collect evidence.

• Prosecutors assess the case and submit an application.

• Courts examine the evidence, issue authorisation, and decide the case.

• Professional asset managers preserve the property’s economic value.

• An oversight mechanism audits compliance and accountability.

This is an illustration of functional separation, not the bill’s final design. Lawmakers are still considering whether an independent asset-management body is required or whether existing functions across several institutions should be integrated.

Protecting Third Parties

A house may be jointly owned by spouses. A vehicle may be subject to financing. Property may be pledged to a bank. A company’s assets may represent the interests of several shareholders. Funds may also reach a purchaser who had no knowledge of their origin.

If one person is involved in an offence, the state cannot automatically assume that the full value of every related asset represents criminal proceeds.

Protection for good-faith third parties has become one of the bill’s central issues. The final provisions need to address:

• How third parties may file objections.

• Time limits for submitting claims.

• Documents that can demonstrate lawful ownership or interest.

• Separation of the criminally connected portion from the lawfully acquired portion.

• Protection for secured creditors.

• Compensation or restoration when a seizure is found to be wrongful.

Protection should not become available only after the property has been sold or has lost value. Affected parties need timely access to a court, information about the basis for the action, and an opportunity to present evidence.

Lawmakers are also considering whether existing pretrial review is sufficient to challenge errors in blocking and seizure, or whether a specific procedure is required for asset disputes.

Which Assets and Offences May Be Covered?

In August 2026, Commission III announced a provisional list of 13 categories of offences being considered for the bill. They included corruption, narcotics and psychotropic offences, terrorism, human smuggling, arms smuggling, forestry, environmental offences, taxation, banking, insurance, mining, marine and fisheries offences, and human trafficking.

The list is not final. Online gambling, for example, was still being considered for inclusion in the Problem Inventory List. The debate shows that lawmakers are deciding both which assets may be forfeited and which predicate offences may trigger the NCB mechanism.

An excessively broad scope could allow an extraordinary mechanism to be used for cases that should proceed through ordinary criminal law. An overly narrow scope could leave gaps for emerging economic crime.

The final language should clarify:

• The categories of predicate offences.

• Any minimum criminal penalty.

• Any minimum asset or loss threshold.

• The required connection between the property and the offence.

• The special conditions permitting NCB forfeiture.

• Whether substitute assets may be taken when the original assets are abroad or cannot be located.

The Problem of Asset Valuation

The value announced during a search or seizure may differ from the value eventually established in an indictment or court decision. On September 15, Commission III highlighted the need for a clear relationship among the unlawful act, the amount of loss, and the value of the asset subject to forfeiture.

An incorrect valuation can create two problems. If the value is overstated, owners or third parties may face disproportionate restrictions. If the property is undervalued or poorly managed, the amount eventually recovered by the state may shrink.

Different asset classes also require different treatment:

• Cash is relatively easy to record but still requires a clear chain of custody.

• Property requires valuation, security, maintenance, and tax management.

• Vehicles and machinery may depreciate quickly.

• Operating businesses require management to preserve revenue and employment.

• Shares and bonds move with financial-market conditions.

• Crypto assets can be highly volatile and require secure private-key management.

Asset management is therefore more than an administrative task. Authorities must decide whether property should be stored, operated, leased, sold, or converted. Each choice creates legal and economic risks.

Why Are Depreciating Assets a Difficult Issue?

Suppose a digital asset is worth Rp10 billion when seized and declines by 30% during the legal process. Its value falls to Rp7 billion. If a court later orders the asset to be returned, the law must address who bears the Rp3 billion decline.

Selling early may preserve value in some circumstances, but it creates another problem. The owner could object that the asset was sold before a final decision and later increased in price.

The same challenge applies to vehicles, inventory, machinery, livestock, and operating businesses. The bill needs to determine:

• Who may authorise a sale before a final judgment.

• When an early sale is permitted.

• How a fair price is determined.

• Where the proceeds are held.

• What compensation applies if the property must be returned.

• How management decisions are audited.

One proposal raised during deliberations is to hold sale proceeds in escrow until the asset’s legal status is resolved. That remains a proposal rather than a final statutory design.

What About Bitcoin and Other Crypto Assets?

Public House materials available through September 15, 2026 did not set out a final procedure specifically covering the seizure, custody, valuation, and sale of crypto assets. Because the bill remains under deliberation, it would be inaccurate to claim that all crypto holdings will automatically become subject to forfeiture.

Digital assets could nevertheless be relevant if the final law adopts a broad definition of property and authorities can establish a connection with an offence covered by the law.

Crypto assets create several specific challenges.

A. Proving Control

Blockchain addresses are public, but the identity of the person controlling an address is not always visible. Investigators must connect a wallet to an individual, company, device, transaction, or verified account.

B. Securing Private Keys

Moving assets to a state-controlled wallet may prevent further transfers. The private key then becomes a new operational risk. A lost key, compromised access, or weak multisignature procedure could permanently destroy access to the assets.

C. Determining Value

Crypto assets trade continuously and can move sharply. The final law or secondary regulations would need to specify the valuation time, reference price, data source, and treatment of volatility.

D. Handling Cross-Border Assets

A wallet can be controlled from anywhere, while the user, service provider, server, and associated assets may sit in different jurisdictions. On-chain tracing does not automatically provide legal authority to transfer an asset. International cooperation and formal requests to service providers may still be necessary.

E. Protecting Third Parties

Digital assets can move through multiple addresses before reaching a person who does not know their origin. Final provisions must distinguish offenders, nominees, service providers, creditors, and good-faith recipients.

The bill does not create new obligations for users of licensed crypto platforms until it is enacted and brought into force. Its operational effect will depend on the final wording, secondary regulations, institutional authority, and procedures for requesting information, blocking accounts, or transferring assets.

Will the Bill Increase State Revenue?

Asset recovery can return the economic value of crime to the state or to injured parties. The amount announced at the time of seizure, however, is not the same as the net value ultimately recovered.

The final amount can be reduced because:

• Asset prices change during legal proceedings.

• Part of the property belongs to lawful third parties.

• The asset carries debt, security interests, taxes, or maintenance costs.

• A sale occurs at a discount.

• Tracing, security, litigation, and management are expensive.

• The value proven in court is lower than the initial estimate.

The law’s success should not be measured only by the headline value of blocked assets. More meaningful indicators would include net value recovered, time to resolution, decisions upheld on review, management costs, and the fair resolution of third-party claims.

What Must Be Resolved Before December?

Several core questions still require clear answers in the final bill:

• When may NCB forfeiture be used?

• What initial evidence is required before an asset is blocked?

• Who authorises blocking and seizure?

• How long may temporary measures remain in place?

• Who compensates an owner when enforcement action is found to be wrongful?

• How is a reversed burden of proof limited?

• How can third parties file objections?

• Is a special procedure or pretrial review mechanism required?

• Who manages the property, and how is that management audited?

• How will operating businesses, securities, and crypto assets be handled?

• Can substitute property be taken when the original asset is abroad?

• How will the new law align with Indonesia’s Criminal Code, Criminal Procedure Code, anti-corruption law, and anti-money-laundering framework?

The December target will be meaningful only if these issues are resolved operationally in the statute rather than left almost entirely to implementing rules.

Conclusion

The Asset Forfeiture Bill is intended to address a real problem. Offenders may flee, die, use nominees, or transfer criminal proceeds before a case is completed. An asset-focused mechanism can help the state respond to those situations.

The strength of the mechanism is also its principal risk. The ability to block, seize, and forfeit assets without first obtaining a criminal conviction against the offender requires strong evidentiary standards, judicial control, time limits, appeal mechanisms, and independent oversight.

As of September 16, 2026, the House was targeting enactment by December, but the substance remained under deliberation. The key issue is not merely whether lawmakers meet the deadline. The law’s quality will depend on the conditions for using NCB forfeiture, the division of authority, third-party protections, asset governance, and the ability to address new forms of wealth without sacrificing legal certainty.

Disclaimer

This article is provided for informational and educational purposes only. It does not constitute legal advice, a legal opinion, or investment advice. The status, title, scope, and provisions of the Asset Forfeiture Bill may change during deliberations between the House and the government. Readers should consult the official bill, Problem Inventory List, meeting decisions, and enacted legislation before drawing conclusions about specific legal rights or obligations.