Financial Crime World

Financial Crime Investigation Agencies Get Boost in Indonesia

The Indonesian Financial Services Authority (OJK) has taken a more central role in investigating crimes in the financial services sector following the issuance of Regulation Number 16 of 2023 on Investigation of Crimes in the Financial Services Sector.

Expanded Investigative Powers

Under this regulation, OJK has been granted the power to investigate crimes in various sectors, including:

  • Banking
  • Carbon exchanges
  • Capital market and derivative finance
  • Multifinance companies
  • Venture capital companies
  • Microfinance companies
  • Other financial services companies

This investigative power applies to both conventional and sharia financial services.

OJK’s Investigation Team

OJK’s investigation team is a joint agency appointed by its board of commissioners, consisting of:

  • Officials from the Police
  • Civil servant investigators
  • OJK officials who meet the qualifications set by the Police

The team is responsible for:

  • Receiving reports and complaints
  • Summoning witnesses
  • Examining documents
  • Requesting assistance from other government agencies
  • Conducting searches

Investigation Process

OJK may decide to launch an inquiry based on a report or complaint, and once completed, it will proceed with an investigation. During the investigation, OJK will coordinate with the Police to build up the case and gather evidence for prosecution.

Public Monitoring

Public monitoring is also possible during the investigation process, where individuals can request updates from OJK on the development of the case. However, requests are only possible after OJK decides to launch an investigation into the reported issue.

Alternative Settlement of Criminal Charges

The regulation also provides for alternative settlement of criminal charges through a process governed by Chapter IV of OJK Reg 16/2023. A suspect may propose to settle potential criminal charges by submitting a petition that contains:

  • Information on the estimated loss
  • Victims
  • Proposed reparation
  • Commitment to improve business processes and governance

OJK will inspect the petition using three criteria:

  • Rehabilitative effect
  • Value of reparation
  • Impact on the financial services industry and public interest

If approved, the petition will be formalized into an agreement between OJK and the suspect, incorporating terms of reparation and any corrective actions deemed necessary by OJK.

Money Laundering Investigations

The regulation also grants OJK authority to investigate money laundering cases related to crimes in the financial services sector. In conducting these investigations, OJK may request information from financial services institutions on the financial condition of a suspect or instruct relevant financial services institutions to block accounts owned or related to the suspect.

Conclusion

Indonesia’s financial crime investigation agencies have received a boost with the issuance of Regulation Number 16 of 2023, which aims to strengthen the country’s financial sector by providing a more effective and efficient way to investigate crimes in the financial services sector.