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Financial Transactions Analysis Center (PPATK) chief Yunus
Husein has reiterated the need for professionals and non
financial-services businesses to get involved in the war against
rampant white-collar crime.
Speaking Tuesday during a seminar on money laundering, he said that non
financial-services businesses and professionals that had the potential
to become involved in money laundering, such as car dealers, property
companies, jewelry traders, notaries and public accountants, should be
required to report suspicious transactions engaged in by their
customers or clients when these came to their attention.
He said that it was common practice to launder the proceeds of crime by
purchasing jewelry, luxury cars and expensive apartments or houses.
"This type of money laundering is believed to be widespread in
Indonesia as the existing legislation does not require professionals
and non financial-services businesses to submit reports," he explained.
Under the prevailing legislation, only financial services firms, such
as banks, insurance and securities firms, are obligated to report
suspicious transactions to the PPATK. The reporting obligations of
banks have been further strengthened by Bank Indonesia regulations on
the "Know Your Customer" (KYC) principles.
The PPATK, which is the agency responsible for monitoring suspicious
transactions, submitted a white paper to the House of Representatives
in February setting out proposed amendments to the existing Money
Laundering Law (No. 25/2003).
Under the amendments, the number of reporting parties would be expanded
to include professionals, such as accountants, notaries and lawyers,
and non financial-sector businesses, such as car dealers, property
firms and jewelry traders.
Yunus said that the best way to detect money laundering was to
investigate signs of suspicious wealth using the "follow the money"
approach.
He said that money laundering was normally effected by one, or a
combination, of three methods -- dividing up a large sum of illicit
money and depositing it in small amounts in a number of accounts,
transferring money from place to place through a maze of complex
transactions so that it was difficult to trace, or using the money for
the making of legitimate purchases.
He explained that laundered money normally represented the proceeds of
corruption. illegal logging, or drug trafficking, or was connected with
terrorism.
While most of the banks have been complying with their reporting
obligations, a number of professional associations have expressed
apprehension about the proposed widening of reporting obligations.
"This is about the confidentiality of our clients. We are afraid that
they will lose trust in us if we are required to report to the PPATK,"
said Munir Fuadi of the Indonesian Advocates Association (IKADIN),
adding that whatever decision was made, it needed to be clear and free
of ambiguity.
According to Yunus, a lawyer could be considered as being implicated in
money laundering if he, for example, transferred money under his own
name on behalf of a client in order to conceal the true identity of the
transferor. "This is not what lawyers should be doing, but it happens,"
he said.
The extending of reporting obligations to such professionals was
therefore necessary as a voluntary reporting scheme would be
unworkable, he added.
Indonesia was listed among the Non-Cooperative Countries and
Territories (NCCTs) by the Financial Action Task Force (FATF) on Money
Laundering in 2001. This increased the cost of transactions in
Indonesia due to the high-risk premiums subsequently imposed.
Indonesia was then removed from the list in 2005 after the enactment of
the 2002 Money Laundering Law, and the signing of 18 memorandums of
understanding (MoUs) with countries that have established financial
intelligence units. The 2002 law was subsequently superseded by Law No.
15/2003, which is now also widely regarded as being obsolete.
As of March 31, the PPATK had received 7,884 suspicious transaction
reports from 113 banks, and 49 reports from securities and insurance
firms. It has forwarded about 690 reports to the police and prosecution
service, but only eight cases have been brought to court and prosecuted
under the Money Laundering Law, while 70 cases have been prosecuted
under the Anticorruption Law, the Banking Law and the Criminal Code.
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