Financial Crime World

Indonesia’s Financial Crimes and Corruption: A Growing Concern

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Indonesia has been facing a surge in financial crimes and corruption, posing significant threats to the country’s economy and stability. While laws and regulations governing financial crimes do not typically have extraterritorial effects, there are exceptions for criminal acts of corruption and money laundering.

Extraterritorial Jurisdiction

According to Indonesian law, any individual outside the country who participates, assists, conspires, provides opportunities or information to commit these crimes can be held accountable as a perpetrator. This is evident in:

  • Article 16 of Law No. 31/1999 on the Eradication of Corruption Crimes, which has been amended
  • Article 10 of Law No. 8/2010 on Money Laundering

The Indonesian Competition Supervisory Commission (KPPU) has also applied the extraterritorial principle in business competition cases, such as:

  • The Very Large Crude Carrier (VLCC) Case
  • The Temasek Case

International Cooperation

Indonesian authorities have been actively cooperating with foreign counterparts to combat transnational crimes like trafficking, cybercrimes, and financial crimes. The country plays a significant role in international forums, has bilateral and multilateral cooperation agreements, and collaborates with international law enforcement institutions.

  • Indonesia cooperates with AUSTRAC, the Egmont Group on Money Laundering, and the Asia Pacific Group on Money Laundering
  • Has ratified several relevant UN conventions through national laws, including the UN Convention against Corruption

Indonesian advocates have certain protections under Article 19 of Law No. 18/2003 on Advocates. They are required to keep client communications confidential and protect their files and electronic communications from seizure or inspection. However:

  • This privilege is invalidated if an advocate obstructs investigations in bad faith
  • For instance, in a corruption case, an advocate was punished for intentionally preventing the investigation of their client

While client confidentiality is protected, advocates cannot abuse this privilege to obstruct legitimate financial crime investigations in an unlawful manner.

Conclusion

As Indonesia continues to grapple with financial crimes and corruption, it is essential that the country strengthens its laws and regulations to combat these issues effectively. This includes:

  • Enhancing cooperation with foreign counterparts
  • Ensuring that legal professional privilege is used responsibly