Indonesia’s Financial Crime Landscape: A Complex Web of Laws and Regulations

Indonesia has a complex web of laws and regulations governing financial crimes, with extraterritorial effects in certain cases.

Extraterritorial Effects

According to Article 16 of the Eradication of Corruption Crimes Law No. 31/1999 and Article 10 of the Money Laundering Law No. 8/2010, any person outside Indonesia who participates in or assists corruption and money laundering crimes can be held accountable as a perpetrator.

Competition Authority

The Indonesian Competition Supervisory Commission (KPPU) has applied the extraterritorial principle in cases such as the Very Large Crude Carrier (VLCC) Case and the Temasek Case, demonstrating Indonesia’s commitment to combating transnational financial crimes.

International Cooperation

Indonesian authorities frequently collaborate with foreign counterparts on crimes like human trafficking, cybercrime, and financial fraud. The country is an active participant in international forums, has bilateral and multilateral cooperation agreements, and works closely with law enforcement institutions. Specifically for financial crimes, Indonesia cooperates with:

• AUSTRAC
• Egmont Group on Money Laundering
• Asia Pacific Group on Money Laundering

United Nations Conventions

Indonesia has ratified several United Nations conventions through national laws, including the UN Convention against Corruption (Law No. 7/2006), underscoring the country’s commitment to combating corruption and financial crime at the international level.

Legal Professional Privilege

Indonesian advocates are protected by Article 19 of Law No. 18/2003 on Advocates, which requires them to maintain client confidentiality and protect their files, documents, and electronic communications from seizure or inspection. However, this privilege can be invalidated if an advocate obstructs investigations in bad faith.

Example: Corruption Case

In a corruption case (Supreme Court Decision No. 3315 K/Pidsus/2018), an advocate was punished under Article 21 of the Corruption Law for intentionally preventing the investigation of their client. This highlights the importance of balancing client confidentiality with the need to investigate and prosecute financial crimes effectively.

Conclusion

Indonesia’s financial crime landscape is complex, with a mix of extraterritorial effects, international cooperation, and legal professional privilege. The country’s commitment to combating corruption and financial crime at the international level is evident through its ratification of United Nations conventions and bilateral/multilateral agreements. However, balancing client confidentiality with the need to investigate and prosecute financial crimes effectively is crucial to ensure that investigations are not undermined by unethical behavior.