Financial Crime World

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Financial Crime Definition in Indonesia: OJK’s Investigative Power Expanded

The Indonesian Financial Services Authority (OJK) has been granted broader powers to investigate financial crimes under Regulation 16/2023, effective from [insert date]. The regulation empowers OJK to probe wrongdoing in various sectors, including:

  • Banking
  • Carbon exchanges
  • Capital markets
  • Derivative finance
  • Multifinance companies
  • Venture capital firms
  • Microfinance institutions
  • Other financial services providers

Investigative Team

OJK’s investigative team is a joint agency comprising:

  • Officials from the Police of the Republic of Indonesia
  • Civil servant investigators appointed by the Minister of Law and Human Rights
  • OJK staff who meet the qualifications set by the police

The team can:

  • Receive reports
  • Summon suspects
  • Search for evidence
  • Examine documents
  • Request assistance from other government agencies

Investigation Process

Under the new regulation, OJK may launch an inquiry based on a report, notification, or complaint about suspected financial crimes. If necessary, it will conduct an investigation, gather evidence, and hand over the case to public prosecutors.

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Public Monitoring and Reporting

Public monitoring and reporting are also encouraged, with no restrictions on who can file a report. Those submitting reports may request updates from OJK on the progress of their cases.

Alternative Settlement Process

The regulation also provides for an alternative settlement process, where suspects can propose a settlement plan to avoid criminal charges. This involves:

  • Submitting a petition that outlines
    • Estimated losses
    • Information about victims
    • Proposed reparations
    • Commitments to improve business processes and governance

OJK will assess the petition using three criteria:

  • Rehabilitative effect
  • Value of reparations
  • Impact on the financial services industry and public interest

If approved, the settlement agreement will be formalized, outlining terms for reparations and any corrective actions deemed necessary by OJK.

Implementation

The suspect must complete all settlement terms within one year after signing the agreement and bear all related fees. Once completed, a report must be submitted to OJK, which will verify its performance and escalate the case if necessary.

Money Laundering Investigation

In addition, OJK has authority to investigate money laundering cases linked to financial crimes, cooperating with the Center for Financial Transaction Reports and Analysis (Pusat Pelaporan dan Analisis Transaksi Keuangan). During investigations, OJK may:

  • Request information from financial services institutions
  • Instruct them to freeze suspect accounts

Non-compliance may result in sanctions under prevailing laws.

Conclusion

Overall, Regulation 16/2023 aims to strengthen Indonesia’s fight against financial crimes by empowering OJK to take a more proactive role in investigating and prosecuting wrongdoing in the financial sector.