Financial Crime World

Indonesia’s Financial Crimes Investigation Agencies Take Center Stage

September 19, 2023

A Centralized Investigative Body for Indonesia’s Financial Sector

In a significant move, Indonesia’s financial sector has gained a centralized investigative body to tackle crimes within the industry. The OJK (Otoritas Jasa Keuangan) has been placed at the forefront of investigating financial crimes, thanks to the recently enacted Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector.

Investigative Powers and Jurisdiction

Under this new regulation, OJK has the authority to investigate a wide range of financial crimes, including those in:

  • Banking
  • Carbon exchanges
  • Capital markets
  • Derivative finance
  • Multifinance companies
  • Venture capital companies
  • Microfinance companies
  • Other entities classified as financial services under prevailing laws

This investigative power extends to both conventional and Shariah financial services.

Investigation Team Composition

The OJK’s investigation team consists of:

  • Officials from the Police
  • Civil Servant Investigators appointed by the Minister of Law and Human Rights
  • OJK officials who meet the qualifications set by the Police

The team is responsible for:

  • Receiving reports
  • Summoning suspects
  • Examining documents
  • Requesting assistance from other agencies
  • Conducting searches

Investigation Process

Under OJK Regulation Number 16 of 2023 on Investigation of Crimes in the Financial Services Sector, OJK may decide to launch an inquiry based on a report or complaint. If the inquiry reveals sufficient evidence, OJK will proceed with an investigation, building up the case and gathering evidence for prosecution.

Public Involvement

The public is encouraged to file reports, notifications, or complaints regarding suspected financial crimes, without any restrictions. The reporting party may request updates from OJK on the development of the case once an investigation has been launched.

Alternative Settlement Mechanisms

In a bid to promote alternative settlement mechanisms, OJK allows suspects to propose settlements through a process governed by Chapter IV of OJK Regulation Number 16/2023. This involves submitting a petition that outlines:

  • Losses incurred
  • Proposed reparation and timeframe
  • Commitment to improve business processes
  • Other relevant details

OJK will inspect the petition using three criteria before issuing a decision within 30 working days. If approved, the settlement agreement will be formalized, incorporating terms of reparation and corrective actions deemed necessary by OJK.

Authority to Investigate Money Laundering Cases

The article also highlights OJK’s authority to investigate money laundering cases related to financial crimes, as well as its power to request information from financial institutions or instruct them to freeze accounts owned by suspects. Failure to comply with these requests may result in sanctions under prevailing laws.

Strengthened Investigative Powers and Industry Transparency

Indonesia’s financial sector is now better equipped to tackle financial crimes, thanks to the strengthened investigative powers of OJK. With this new regulation, the country takes a significant step towards promoting transparency and accountability within its financial industry.