This site has some basic information. Given 7-12 year olds generally lack legal culpability I’m not sure it will actually go anywhere. But that doesn’t mean you can’t try.
Before you take action I would mull over these questions:
Are you prepared for the upheaval an investigation and interviews causes? Because everyone will know everything whether you like it or not.
Are you prepared to have absolutely no relationship with your sister and likely her children and anyone who chooses to support her?
Are you prepared to not have support from family?
Are you prepared for division criminal investigations cause? Again, everyone will know everything and will feel forced to choose a side.
Are you prepared for the original assailant to be flushed out and potentially charged?
Are you ready for family dynamics to change?
Are you ready for how the courts will choose to handle her children in regards to care if she is sent to jail?
Are you ready for her NOT to go to jail and have all of the division and strife within the family with her still present and caring for her children?
Once you pull the trigger, there’s really no turning back. And honestly I don’t think you’ll win this and personally I don’t think it should happen. I know you are angry and hurt, but I just can’t place that kind of responsibility on a child who literally did not know any better. She couldn’t know better. Because her brain wasn’t developed to have that kind of cognitive reasoning and you don’t say when her abuse started but often brain growth becomes stunted and disjointed when abuse begins. I was a 7 year old being sexually abused- I acted it out with friends, I also thought it was the most normal thing in the world. I know better now, but I didn’t then.
I would really really really consider therapy before police. I have a friend going through the process of reporting right now and it’s f*cking hell.
Just be prepared to have your world rocked and quite possibly lose control of how it will go.