The Urgency of Reforming Economic Crime Regulation
An international seminar held to commemorate the 75th anniversary of the Indonesian Prosecutors Association (Persaja) on 5 May 2026 is not merely ceremonial. The international seminar, under the theme Legal Aspect of Managing The JCI Systemic Crisis and Its Implications for National Economic Stability, is in fact part of the professional association of prosecutors’ efforts to contribute to improving the quality of law enforcement, which in turn affects economic stability and the continuity of national development. It is recognised that the role of law and its enforcement apparatus is not only to maintain social order, but law should actively participate in realising social welfare.
As John Stuart Mill stated, justice refers to a set of rules protecting rights deemed important for the welfare of society. Mill’s thought is highly relevant to the modern rule of law concept, emphasising safeguarding individual rights and creating policies that benefit many, thereby helping the government formulate fair and useful rules for the wider community.
From this perspective, the dynamics occurring in the capital market in early 2026 should not merely be read as business activity or an economic phenomenon. Rather, it was a stern warning and an interim freeze decision from Morgan Stanley Capital International (MSCI), which seemed to act as an alarm reminding the importance of a clear economic-legal framework and the strategic role of law enforcement in maintaining national economic stability.
Collective Awareness
There are at least three (3) reasons that sparked a collective awareness of the importance of a strong and integrated national economic-legal framework.
First, the limitations of sectoral regulation in the form of administrative penal law, which are not sufficiently capable of addressing various economic problems and their dynamics. For example, Law No. 8 of 1995 on the Capital Market, which is felt to be unable to face serious challenges from modern modus operandi such as algorithmic trading manipulation, spoofing, layering, and market manipulation through digital platforms. Likewise with the limited access of law enforcement to cross-jurisdiction transaction data, and the complexity of proving capital market crimes which can have systemic impacts on financial market stability.
Second, fragmentation of regulation of economic crimes has reached a highly concerning level. Various sectoral laws each containing criminal provisions in the economic field often have different definitions, scopes, penalties, enforcement procedures, and enforcement agencies, thereby creating a legal labyrinth that benefits perpetrators of economic crime. In addition, fragmentation also causes overlapping jurisdiction and inconsistent application of criminal sanctions. Not to mention legal lacunae in areas at the intersection of sectors, which allows perpetrators to shield themselves and results in inefficiencies from referencing multiple laws in one case, delaying investigations, prosecutions, and court examinations.
Third, the current Emergency Law No. 7 of 1955 (UU TPE) is no longer adequate as a legal framework, especially in integrating various sectoral regulations in the economy and enhancing the effectiveness of law enforcement against economic crime. The law, enacted on 11 May 1955, was essentially formed to meet the economic needs faced in the early days of independence. Therefore, its main orientation lies in controlling goods, prices, hoarding, milling of rice, rice, and foreign exchange, which still relies on several old instruments, such as:
Ordonnantie Gecontroleerde Goederen 1948 (Staatsblad 1948 No. 144) as amended and supplemented by Staatsblad 1949 No. 160, Prijsbeheersing-ordonnantie 1948 (Staatsblad 1948 No. 295),
Undang-Undang Penimbunan Barang-Barang 1951, Rijstordonnantie 1948 (Staatsblad 1948 No. 253),
Emergency Law on Milling of Paddy, and
Devisen Ordonnantie 1940 (Staatsblad 1940 No. 205).
While it regulates investigations, prosecutions, and trials of economic crimes, such a regulatory construct would struggle to address modern economic crime developments that are far more complex, cross-sector and cross-jurisdiction, technology-based, involving corporations, financial instruments, and increasingly sophisticated asset concealment schemes. Therefore, absorbing various related laws into one main regulation becomes an urgent need to create more effective enforcement in the economic field.
Paradigm Shift
Moreover, the current approach of the TPE Law remains more oriented toward punishing individuals personally. Yet the main characteristics of modern economic crime are not only violations of the law’s order, but also loss of state revenue, movement of national wealth, disruption of competition, and weakening the state’s capacity to fund development. Therefore, a paradigm shift is needed that is not merely in persona, but more in rem, emphasising tracing, blocking, seizure, forfeiture of illegal gains, and recovery of assets resulting from economic crime.
This change in approach is important because economic crime