Building a Dual Regime for Asset Forfeiture
Building a Dual Regime for Asset Forfeiture
The formation of the Asset Forfeiture Bill is a strategic step towards strengthening the protection of state and public interests regarding wealth obtained, used, or related to criminal acts. Although forfeiture mechanisms are scattered across various regulations, the current framework remains sectoral and fragmented, generally relying on conviction-based confiscation. This limits effectiveness when criminal proceedings cannot be executed or do not result in a criminal verdict.
From an international law perspective, strengthening this regime cannot rely solely on the United Nations Convention against Corruption (UNCAC); it must also accommodate the development of international instruments and standards regarding the tracing, freezing, seizure, forfeiture, management, and recovery of assets. Therefore, the Asset Forfeiture Bill needs to establish an integrated asset recovery framework that is compatible with international cooperation. The goal should not merely be to expand forfeiture powers, but to ensure that the proceeds of crime are not enjoyed by perpetrators, their value is preserved, and they can be returned to the state, victims, or entitled parties.
Development of International Instruments and Standards in Asset Recovery
International recommendations regarding the recovery of criminal proceeds (asset recovery) show a trend towards a regime that is not only focused on forfeiture but covers the entire process, from prevention, detection, tracing, freezing, or seizure, to forfeiture, management, and the return of assets to the rightful parties. Some of the most influential instruments in this development include the United Nations Convention against Corruption (UNCAT), the Financial Action Task Force (FATF), the United Nations Convention against Transnational Organized Crime (UNTOC), and various other international initiatives and standards.
UNCAC is one of the most comprehensive international instruments regarding asset recovery. Chapter V explicitly establishes asset recovery as a fundamental principle of the Convention. Article 51 emphasises that asset recovery under Chapter V is a fundamental principle of UNCAC, and States Parties are obliged to provide the widest possible cooperation and assistance in its implementation. Article 52 of UNCAC establishes a framework for preventing and detecting the movement of criminal proceeds through strengthened financial supervision, including customer due diligence, identification of beneficial owners, monitoring of politically exposed persons (PEPs) and related parties, reporting of suspicious transactions, prevention of the use of shell banks, disclosure of public officials’ wealth, and international information exchange. This framework demonstrates that asset recovery begins at the prevention and detection stage, rather than merely after assets are discovered. Furthermore, Article 53 regulates direct recovery measures through civil lawsuits, compensation, or damages, as well as the recognition of other states’ ownership rights in the forfeiture process. Asset recovery under UNCAC is pursued not only through criminal mechanisms but also through civil mechanisms and the recognition of the rights of aggrieved states.
Articles 54-55 regulate international cooperation through mutual legal assistance to identify, trace, freeze, seize, and forfeit assets, including the enforcement of foreign forfeiture orders and the possibility of non-conviction-based confiscation, while still guaranteeing due process and the rights of bona fide third parties. Article 56 complements this through special cooperation via proactive information exchange, while Article 57 regulates the management and return of assets through mandatory return, conditional return, and residual disposition. Articles 58-59 further strengthen the functions of Financial Intelligence Units (FIU) and bilateral and multilateral cooperation. Thus, forfeiture is not the end goal, but an instrument to ensure that criminal proceeds are controlled, managed, and recovered to the rightful parties. This framework is reinforced by the FATF through FATF Recommendations, which provide a risk-based operational standard, including Recommendation 4 on confiscation and provisional measures, Recommendations 30-32 regarding financial investigation and cross-border supervision, Recommendations 37-40 regarding international cooperation, and Recommendation 24 regarding beneficial ownership transparency.
Similar developments are reflected in UNTOC, which Indonesia has ratified through Law Number 5 of 2009. Article 12 provides a basis for forfeiture that covers criminal proceeds, assets of equivalent value, instruments of crime, assets transferred to or mixed with legitimate property, as well as identification, tracing, freezing, and seizure. Article 13 strengthens international cooperation in cross-border forfeiture, while Article 14 regulates the management, return, and potential sharing of assets. Together, these three form a sequence that positions forfeiture as part of an asset recovery mechanism, rather than merely removing a perpetrator’s control.
Direction for Improving the Asset Forfeiture Bill
Before the Asset Forfeiture Bill is enacted into law, several fundamental aspects must be strengthened and refined to ensure its formation does not merely expand the state’s power to forfeit assets, but is capable of building an asset recovery regime that is effective, accountable, proportional, and recovery-oriented. Based on this framework, several directions for improvement must be an integral part of the design of the Asset Forfeiture Bill. The Bill needs to explicitly formulate standards of proof. The regulation of standards and the burden of proof is one of the most crucial issues in the application of non-conviction-based mechanisms…