DPR Commission III Expresses Strong Support for Yusril Ihza Mahendra Proposal to Revise Indonesia Anti-Corruption Law

Jakarta, CNN Indonesia — Commission III of the House of Representatives (DPR RI), which oversees legal affairs, human rights, and security, has officially expressed its backing for a proposal put forward by Coordinating Minister for Law, Human Rights, Immigration, and Corrections, Yusril Ihza Mahendra. The proposal calls for a comprehensive revision of Law Number 20 of 2001 concerning the Eradication of Criminal Acts of Corruption (UU Tipikor). The initiative aims to modernize Indonesia’s legal framework, align national legislation with international anti-corruption standards, and plug critical loopholes that have historically allowed white-collar financial crimes to evade severe prosecution.

The push for legislative reform comes at a pivotal time for Southeast Asia’s largest economy, as President Prabowo Subianto’s administration ramps up efforts to clean up state finances, combat illicit financial flows, and recover stolen state assets. While lawmakers have welcomed the overarching goal of strengthening the anti-corruption architecture, parliamentary leaders have emphasized the need for rigorous deliberation, multi-stakeholder engagement, and precision in drafting new legal definitions to avoid unintended economic fallout.

Main Facts and the Core Proposal

The dialogue surrounding the overhaul of the anti-corruption framework gained significant momentum following statements from Coordinating Minister Yusril Ihza Mahendra. Yusril highlighted that the existing Anti-Corruption Law has remained largely untouched since 2001, failing to keep pace with sophisticated, modern financial crimes and evolving international legal benchmarks.

A cornerstone of Yusril’s proposal involves synchronizing Indonesia’s domestic anti-corruption statutes with the United Nations Convention Against Corruption (UNCAC), which Indonesia formally ratified through Law Number 7 of 2006. Furthermore, the push for revision is intrinsically linked to ongoing legislative efforts regarding the Asset Forfeiture Bill (RUU Perampasan Aset), a long-delayed legal instrument designed to allow the state to seize assets acquired through criminal activities even in the absence of a formal criminal conviction of the owner, under specific civil forfeiture parameters.

Responding to these developments, Ahmad Sahroni, Deputy Chairman of DPR Commission III, stated that any legislative effort aimed at fortifying the nation’s anti-corruption posture deserves robust institutional support.

"In my view, every effort to strengthen anti-corruption enforcement certainly needs to be supported, including if there is a pressing need to revise the Tipikor Law," Sahroni told reporters when contacted on Tuesday.

However, Sahroni underscored that the legislative process must proceed with extreme caution. He urged that the formulation of the revised statute actively involve a broad array of stakeholders, prominently featuring legal scholars, anti-corruption practitioners, economists, and civil society academics. According to the NasDem Party politician, any proposed changes to the definition of corruption must be meticulously crafted to prevent legal ambiguity, which could otherwise foster uncertainty within the judiciary and the wider business community.

Targeting Trade Manipulation: The Inclusion of Under-Invoicing

One of the most consequential aspects of the proposed revision is the potential criminalization and explicit categorization of "under-invoicing" within the scope of the Tipikor Law. Under-invoicing is a deceptive trade practice where companies or individuals intentionally manipulate commercial documentation—such as invoices, bills of lading, and customs declarations—to understate the actual value, quantity, or volume of traded goods. This illicit maneuver is frequently utilized to evade corporate taxes, dodge import duties, bypass foreign exchange regulations, and facilitate capital flight or trade-based money laundering.

Sahroni voiced his strong support for incorporating under-invoicing into the revised anti-corruption framework, noting that the illicit practice has captured the direct attention of President Prabowo Subianto as part of a broader campaign to secure state revenue and eliminate state financial leakage.

"I support the proposal to include under-invoicing into the Tipikor Law. This is very necessary to consider, because this cunning practice has also become a serious concern for President Prabowo," Sahroni asserted.

Despite his endorsement, Sahroni issued a pragmatic caveat regarding regulatory enforcement. He stressed that the parameters defining under-invoicing must be crystal clear, leaving zero room for subjective interpretation or bureaucratic gray areas. This precaution is vital to ensure that legitimate commercial transactions, routine trade negotiations, and ordinary business discrepancies are not mistakenly criminalized, which could otherwise choke investment, disrupt supply chains, and create unnecessary hurdles for the domestic and international trade sectors.

Chronology of Legal Reform and Legislative Background

To understand the current impetus for revising Law Number 20 of 2001, it is necessary to examine the historical evolution of Indonesia’s anti-corruption legislation:

• 1999 — Following the fall of the New Order regime, the Habibie administration enacted Law Number 31 of 1999 on the Eradication of Criminal Acts of Corruption, establishing the foundation for modern corruption prosecution.
• 2001 — Parliament enacted Law Number 20 of 2001, which amended the 1999 statute. This amendment broadened the definitions of bribery, extortion, and state financial losses, and formally established the legal foundation for the Corruption Eradication Commission (KPK), which was subsequently empowered by Law Number 30 of 2002.
• 2006 — Indonesia officially ratified the United Nations Convention Against Corruption (UNCAC) through Law Number 7 of 2006, committing the state to adopt international legal instruments and preventive measures against corruption, asset recovery, and international cooperation.
• 2019 — The controversial revision of Law Number 30 of 2002 regarding the KPK sparked massive nationwide student and civil society protests, altering the institutional independence and investigative powers of the anti-graft agency.
• 2023–2024 — Discussions surrounding the Asset Forfeiture Bill (RUU Perampasan Aset) intensified within the legislature and executive branch, highlighting the legal disconnect between existing asset recovery mechanisms and transnational financial crimes.
• Late 2024 — Coordinating Minister Yusril Ihza Mahendra reignited the debate by advocating for a holistic review of the criminal justice system, tying the overhaul of the Tipikor Law directly to ongoing updates in the Criminal Code (KUHP), the Criminal Procedure Code (KUHAP), and UNCAC obligations.

Alignment with International Standards and Domestic Challenges

The primary argument advanced by legal experts and government officials for revising the Tipikor Law centers on the necessity of addressing contemporary forms of corruption that transcend traditional bribery and embezzlement. While the 2001 statute adequately covers classic state-capture offenses, it frequently falls short when confronted with complex, cross-border financial crimes, shell companies, cryptocurrency laundering, and sophisticated trade manipulation.

By harmonizing domestic laws with the United Nations Convention Against Corruption (UNCAC), Indonesia aims to fulfill international obligations that facilitate mutual legal assistance (MLA) and streamline the repatriation of state assets hidden in offshore financial havens. However, legal analysts point out that legislative harmonization alone will not suffice without structural strengthening of law enforcement agencies, including the Attorney General’s Office, the Indonesian National Police, and the KPK.

Furthermore, integrating trade-based financial crimes like under-invoicing into the anti-corruption mandate introduces complex jurisdictional overlaps between the Directorate General of Customs and Excise, the Ministry of Trade, the Financial Transaction Reports and Analysis Center (PPATK), and anti-corruption investigators. Experts argue that inter-agency coordination protocols must be clearly established within the revised law to prevent jurisdictional turf wars and ensure seamless evidentiary collection.

Broader Economic Implications and Analyst Perspectives

The prospect of overhauling Indonesia’s primary anti-corruption statute carries profound implications for the country’s macroeconomic stability, investment climate, and ease of doing business. On one hand, closing legal loopholes, aggressively penalizing trade fraud, and implementing robust asset forfeiture mechanisms are expected to bolster investor confidence by creating a more transparent, predictable, and fair competitive landscape. International investors have long cited regulatory inconsistency and systemic corruption as significant deterrents to foreign direct investment (FDI).

On the other hand, the business community has expressed cautious vigilance. Representatives from various chambers of commerce and industry associations have frequently warned that overly broad definitions of financial crimes—if unaccompanied by precise statutory definitions and objective evidentiary standards—can expose honest business operators to legal harassment, bureaucratic extortion, and political risk.

Economic analysts suggest that the ongoing legislative discourse must strike a delicate balance. The state must retain the legal teeth necessary to dismantle corrupt cartels and recover trillions of rupiah in plundered state funds without paralyzing entrepreneurial initiative or discouraging lawful commercial risk-taking.

As Commission III of the DPR prepares to review the formal proposals submitted by Coordinating Minister Yusril Ihza Mahendra, the upcoming legislative sessions are expected to draw intense scrutiny from legal scholars, international monitors, business leaders, and civil society organizations alike. The ultimate success of the proposed revision will hinge not only on the severity of the punitive measures introduced, but equally on the clarity, fairness, and institutional integrity governing their enforcement.