Shifting the Paradigm from Asset Confiscation to Asset Recovery
Discussion of the Draft Law on Asset Confiscation has once again captured public attention. Many stakeholders consider this regulation crucial for strengthening anti-corruption and anti-money laundering efforts. However, current debates have been overly focused on how the state can seize as much criminal assets as possible. The more fundamental issue lies in how the state builds an effective, swift asset recovery system capable of restoring losses to the state and crime victims.
Debates during the drafting process of the Asset Confiscation Bill at the House of Representatives (DPR) reveal conflicting interests regarding power design, potential abuse of authority, and the creation of new institutions. Some factions advocate for broader state powers to pursue criminal assets, particularly cross-border and digital assets. Others fear that expanded authority without robust oversight could enable abuse of power. Therefore, the bill’s discussion should not merely be seen as expanding state repressive tools, but as part of a broader criminal justice system reform that is more accountable and equitable.
Indonesia’s criminal law enforcement has long been influenced by a retributive paradigm. Success is often measured by the number of suspects arrested or the severity of prison sentences. In practice, this approach rarely recovers state losses. Perpetrators are punished, but illicit assets remain hidden, moved overseas, or enjoyed by others through shell companies and hidden accounts. The state succeeds in convicting offenders but fails to dismantle the economic gains from crimes.
Modern crime has also evolved significantly. Corrupt actors, money launderers, and economic offenders now use cryptocurrency, beneficial ownership structures, cross-jurisdictional accounts, and digital assets that are hard to trace. Consequently, the state often lags behind modern financial crime trends. In this context, prison sentences alone cannot break the economic profit chain from crimes. Many countries are shifting from offender-focused systems to asset recovery systems that prioritise asset restitution over mere punishment.
This shift is evident in Law No. 1 of 2023 on the Criminal Code and Law No. 20 of 2025 on the Criminal Procedure Code. Indonesia’s criminal legal policy is moving towards a more restorative and rehabilitative approach. Punishment is no longer viewed solely as retribution but as a means to restore social balance disrupted by crimes. Law No. 20 of 2025 explicitly states that proceeds of crime should not only be seized by the state but also returned to rightful claimants, including victims. These changes align with strengthened victim rights in the 2025 Criminal Procedure Code, which places restitution, compensation, and recovery as key objectives of the criminal justice system.
From Confiscation to Asset Recovery
In this context, ‘asset recovery’ is a more accurate term than mere ‘asset confiscation’. In criminal law tradition, confiscation refers to conviction-based confiscation imposed after a guilty verdict, with a repressive orientation tied to punishment. Conversely, asset recovery encompasses a broader scope, including not only court-ordered seizures but also safeguarding, freezing, seizure, management, auctioning, and restitution of assets from the earliest stages of legal proceedings.
In modern asset recovery practices, states can freeze or provisionally seize assets before trial concludes to prevent transfer, sale, or concealment. Thus, an asset recovery paradigm better aligns with rapidly evolving, technology-driven financial crimes. Over-reliance on conviction-based confiscation risks losing assets before verdicts are handed down. Legal reform must shift from merely strengthening confiscation powers to building an asset recovery system that operates from the outset of investigations.
This concept aligns with the growing use of non-conviction based confiscation mechanisms—seizing assets without awaiting a criminal verdict. Such instruments are necessary as many illicit assets cannot be accessed through standard criminal procedures, especially when offenders die, flee, or assets are discovered post-conviction. However, strengthening asset seizure regimes must uphold due process, non-retroactivity, human rights protections, and adequate judicial oversight to prevent abuse of power.
Integrating the National Asset Recovery System
In this context, discussions on the Asset Confiscation Bill should not stop at debates over creating new institutions. The core issue has never been a lack of agencies, but weak integration of illicit asset management systems. Asset handling remains fragmented across agencies, leading to sectoral egoism, bureaucratic delays, and slow decision-making in securing and auctioning assets. Consequently, seized assets often depreciate, deteriorate, or lose economic value.