Financial Crime World

Indonesia’s Financial Crimes Investigation Agencies Take Center Stage

The Indonesian Financial Services Authority (OJK) has been given a more prominent role in investigating crimes in the financial services sector, thanks to Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector.

Key Provisions of the Regulation

Regulation Number 16 of 2023 outlines the scope of crimes, investigative authorities, and alternative settlement mechanics. Some key provisions include:

  • Investigative Scope: OJK has the power to investigate a wide range of financial crimes committed by various types of financial services companies, including banks, carbon exchanges, capital market companies, multifinance companies, venture capital companies, microfinance companies, and others.
  • Investigation Authority: The investigation team is a joint agency consisting of officials from the Police, Civil Servant Investigators appointed by the Minister of Law and Human Rights, and OJK officials who meet certain qualifications set by the Police.

Investigation Process

The investigation process involves several steps:

  • Initial Inquiry: If an inquiry reveals sufficient evidence, OJK may launch a full investigation.
  • Building Case File: The suspect is given a chance to propose an alternative settlement process, which allows them to pay reparations to victims and implement corrective actions to prevent similar crimes from happening again.
  • Evidence Gathering: The suspect must complete all settlement agreement terms within one year of signing the agreement. Failure to do so may result in escalation of the case into a full investigation.

Money Laundering Investigations

OJK also has the authority to investigate money laundering cases related to financial services crimes, working closely with the Center for Financial Transaction Reports and Analysis. In conducting these investigations, OJK may:

  • Request Information: Request information from financial institutions on suspect accounts or instruct them to block suspect accounts.
  • Block Accounts: Failure to comply with such requests may result in sanctions under prevailing laws.

Goals of the Regulation

The new regulation aims to strengthen Indonesia’s financial sector by providing a more efficient and effective way of investigating and addressing financial crimes. With its expanded powers and procedures, OJK is well-positioned to tackle the complex issue of financial crime and ensure the integrity of Indonesia’s financial services sector.