Introduction
In a significant move to fortify the financial services regulatory landscape and combat financial crimes effectively, Indonesia's House of Representatives introduced Law Number 4/2023. This omnibus law amends multiple regulations, including Article 49 of Law Number 21/2011, empowering the Financial Services Authority (OJK) to investigate crimes within the financial services sector.
To further specify OJK's investigative authority, the Government of the Republic of Indonesia recently issued Government Regulation Number 5 of 2023. This regulatory update, also known as GR 5/2023, outlines OJK's enhanced role in investigating financial services crimes.
These legislative changes signal a proactive effort to enhance oversight and ensure more robust measures against financial misconduct in the industry.
Investigators of Financial Services Crimes
OJK will not be the sole investigator of financial services crimes. Investigators of financial services crimes now consist of 2 (two) bodies:1
- Indonesian Police Force's Investigators;
- OJK's Investigators which is made up from:
a. Indonesian Police Force's Investigators assigned within
OJK;
b. OJK's Civil Servant Officials;
c. OJK's Non-Civil Servant Officials which qualified to be
investigators.
OJK's New Authorities
The Indonesian Police Force still retains their rights and authority to investigate financial services sectors unvaried from common criminal investigations. Meanwhile, OJK receives the following authorities among others:2
- Receives reports, notifications, and complaints from individuals related to criminal acts in the financial services sectors;
- Conduct research regarding the accuracy of the reports;
- Summoning, examining, and requests for information as well as evidence from any parties related to the alleged crime in the financial services sectors;
- Blocking bank accounts or other financial institutions' accounts;
- Requesting the Indonesian Police Force to take coercive action against the alleged culprit;
- Conducting money laundering investigation which stems from financial services sectors crimes.
Key Takeaways
While the expansion of OJK's authorities through GR 35/2023 is commendable, challenges lie ahead in implementing the new criminal investigation authority effectively. Among other things are ensuring due process of law from OJK's personnel which may not be properly trained to conduct investigations fairly and transparently.
Overall, the new investigative authority will surely increase OJK's oversight of the financial services sectors. Stakeholders should expect rigorous compliance checks and a more thorough investigation should one is suspected to be a part of financial services crimes.
Footnotes
1. Article 2, GR 5/2023.
2. Article 2 (4), GR 5/2023.
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