Financial Crime World

Extraterritorial Reach in Indonesian Financial Crimes: Corruption, Money Laundering, and International Cooperation

Indonesia’s financial crime landscape is under increased scrutiny as the country’s laws continue to expand in reach. While most financial crime laws lack extraterritorial effects, there are notable exceptions when it comes to corruption and money laundering.

Extraterritorial Jurisdiction in Indonesian Law

The Indonesian legal framework allows for the prosecution of individuals residing outside the country for participating, assisting, conspiring, or providing opportunities/information to commit corruption and money laundering crimes.

  • Corruption Crimes: Article 16 of Law No. 31/1999 on the Eradication of Corruption Crimes
  • Money Laundering: Article 10 of Law No. 8/2010 on Money Laundering

Application of Extraterritorial Jurisdiction in Business Competition Cases

The principle of extraterritorial jurisdiction is also crucial in business competition cases overseen by the Indonesia Competition Supervisory Commission (KPPU). This principle has been employed in notable cases such as the:

  • VLCC Case (Decision No. 07/KPPU-L/2004)
  • Temasek Case (Decision No. 07/KPPU-L/2007)

International Cooperation

Indonesian authorities have been actively cooperating with their foreign counterparts on transnational offenses like financial crimes. Their efforts include:

  • International Forums: ASEAN+3, G20, FATF, G7, and APEC
  • Bilateral and Multilateral Agreements: ASEAN Mutual Legal Assistance in Criminal Matters, Double Taxation Agreements, and MOUs with various countries
  • Collaborations with International Law Enforcement Institutions: AUSTRAC, Egmont Group on Money Laundering, and Asia Pacific Group on Money Laundering

Relevant United Nations Conventions

Indonesia has ratified several United Nations conventions through national laws, including:

  • UN Convention against Corruption (Law No. 7/2006)

Protections for Client Confidentiality

Indonesian authorities protect confidential communications between legal professionals and their clients under Article 19 of Law No. 18/2003 on Advocates. However, these protections can be waived if an advocate acts in bad faith (Article 21 of the Corruption Law - Supreme Court Decision No. 3315 K/Pid.Sus/2018). In summary, Indonesian client confidentiality is protected, but advocates cannot misuse this privilege to hinder legitimate financial crime investigations unethically. Indonesian authorities can override it when advocates exhibit bad faith conduct.