Financial Crime World

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Financial Crime Definition in Indonesia: A Guide for Businesses

In today’s increasingly scrutinized corporate landscape, it is essential for businesses operating in Indonesia to understand the framework of financial crime laws that affect them. This article provides an overview of major financial crime offenses - corruption, money laundering, tax evasion, and fraud - outlining the Indonesian legislation that governs these activities.

Corruption

Corruption is a significant concern in Indonesia, with Law Number 31 of 1999 on Eradication of the Crime of Corruption serving as the primary legislation. The law criminalizes:

  • Bribery
  • Conflict of interests
  • Gratification

Corporations can be held accountable for criminal acts committed by or on their behalf.

Money Laundering

Money laundering is another major financial crime offense regulated under Law Number 8 of 2010 on the Prevention and Eradication of Money Laundering Crime. According to Article 6 Paragraph (1), corporations found guilty of money laundering can face criminal sanctions, including:

  • Fines
  • Imprisonment

Tax Evasion

Tax evasion is also a significant issue in Indonesia, with Law Number 28 of 2007 on Third Amendment to Law Number 6 of 1983 on General Provisions and Procedures of Tax providing the framework for tax laws. The law prohibits:

  • Failing to report income
  • Making false deductions
  • Inflating expenses

Fraud

Fraud is another financial crime offense regulated under Law Number 5 of 1999 on Prohibition of Monopolistic Practices and Unfair Business Competition. The law criminalizes unfair business competition practices, including:

  • Price fixing
  • Cartels
  • Dominant positions

Corporations found guilty of these offenses can face criminal sanctions, including:

  • Fines
  • Imprisonment

Conclusion

It is essential for businesses operating in Indonesia to understand these financial crime laws and regulations to ensure compliance and avoid severe consequences. By familiarizing themselves with the legal framework governing financial crimes, corporations can navigate the complexities of corporate governance and minimize the risk of legal action.