Financial Crime World

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Financial Crime Definition in Indonesia

Indonesia has a robust legal framework to combat financial crime, including money laundering and terrorist financing. Under Law No. 8 of 2010 on Prevention and Eradication of Money Laundering Crime and Law No. 9 of 2013 on Prevention and Eradication of Terrorism Financing Crime, engaging in these activities is considered a criminal offense.

Scope and Definition

The law applies to all individuals and corporations, defined as a collection of organized people and/or wealth, both in the form of a legal entity or a non-legal entity. The legislation prohibits every activity relating to money laundering and its supporting actions, including the non-reporting of suspicious financial transactions.

Money Laundering Definition

Money laundering is defined as the act of hiding and disguising assets resulting from crime, including conspiracy, receiving, keeping, using or transferring such assets, and hindering the investigation of a suspicion of money laundering. The underlying criminal activity does not need to be proven first.

Criminal Offence

To establish the criminal offence of money laundering, Law 8/2010 uses both subjective and objective factors, including:

  • Knowledge of the assets that should be known or suspected to be the proceeds of an underlying crime
  • Transaction done by subjects to hide or disguise such assets as if they were obtained in a valid manner

Penalties

The penalties for infringing the legislation include imprisonment and/or a fine, with the maximum penalty being Rp10,000,000,000 (ten billion Rupiah) and the maximum imprisonment being 20 years.

Extra-Territorial Reach

Law 8/2010 also has extra-territorial reach, applying to any underlying criminal activity and money laundering committed outside of Indonesia, as well as in respect of assets resulting from such activities.

Anti-Money Laundering and Counter-Terrorism Financing Regulations

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Additional regulations include:

  • Registration and reporting obligations for businesses and individuals that operate in particular sectors or undertake particular activities
  • Services providers, including financial institutions and other businesses, have the obligation to report any suspicious financial transactions to Financial Transaction Reports and Analysis Centre (PPATK)
  • Individuals also have an obligation to report any suspicious amount of cash or payment instrument brought into and outside of Indonesian custom areas to DJBC, which will subsequently be reported to PPATK

Consequences of Non-Compliance

Failure to comply with these obligations may result in administrative sanctions for services providers and individuals, including:

  • Warnings
  • Written warnings
  • Public announcements
  • Administrative fines

Relevant Enforcement Authority

The relevant enforcement authority related to money laundering in Indonesia is PPATK, located at Jalan Ir. Haji Juanda No. 35, Kebon Kelapa, Gambir, Central Jakarta, Indonesia.

Contact Details

Contact details include: