A start to stopping money laundering?<\/p>\n
Can the new regulation requiring banks to report any
\nsuspicious transactions help curb money laundering? Bank
\nIndonesia senior deputy governor Anwar Nasution shares his views.<\/p>\n
Question: Bank Indonesia has issued Regulation No.3\/2001 which
\nrequires banks to carefully scrutinize the source of their
\ncustomers' money and to report any suspicious transactions. Would
\nthis show that the government is cooperating in international
\nefforts to combat money-laundering practices?<\/p>\n
Answer: The new regulation is an attempt to obtain information
\nabout banks' customers. Foreign banks have been practicing the
\n\"know your customer\" policy for a long time, a practice which may
\nannoy Indonesians who want to open accounts in the banks'
\nbranches here. The foreign banks want to know many things
\nincluding the salaries of prospective customers. This is to avoid
\nsuspicious activities.<\/p>\n
Since the regulation was issued by Bank Indonesia, which is
\nnot a judicial institute, the effectiveness of demonstrating our
\ncooperation in combating money laundering will also depend on the
\nprocessing of reports on suspicious transactions. It will be of
\nno use if there is no legal process.<\/p>\n
At least there's been progress in Indonesia (to cooperate in
\ninternational efforts to combat money-laundering practices) with
\nthe implementation of the new regulation.<\/p>\n
(The regulation) is about trust and security. When the banks
\nobtain information about their customers, the data must be kept
\nwith a high degree of confidentiality. It is not impossible to
\nhave people trying to steal or leak customer data for criminal
\npurposes.<\/p>\n
Will the BI regulation lead to people shifting their money to
\noverseas banks?<\/p>\n
No. I don't think it will be easier to open accounts at
\nforeign banks, especially for a huge amount of cash.<\/p>\n
Will the money laundering bill proposed to the House of
\nRepresentatives be more effective in curbing crime in Indonesia?<\/p>\n
Since Bank Indonesia is not a legal authority, the banking
\nsector is not a police officer, judge nor tax officer, the
\nimplementation of the bill should be supported by the judiciary
\nsystem, including the National Police, the Attorney General's
\nOffice and the penitentiary. They should perform much better to
\ncurb money laundering.<\/p>\n
The Paris-based Financial Action Task Force (FATF) recently
\nadded Indonesia to its blacklisted countries that are considered
\nuncooperative in the fight against money laundering. Your
\ncomment?<\/p>\n
We know this (money laundering) is a chronic problem in
\nIndonesia, in which corruption, collusion and nepotism (KKN) are
\npart of money laundering activities. Many of us do not have Tax
\nRegistration Code Numbers (NPWP) and avoid paying various taxes;
\nthis is also part of money laundering -- not only trafficking in
\ndrugs or arms. There is also an increase in human smuggling and
\ninternational drug trafficking in certain areas in Indonesia.<\/p>\n
So I think the international community (FATF) has reason to
\nadd Indonesia to its blacklist of countries considered
\nuncooperative in the fight against money laundering.<\/p>\n
Among diverse money laundering practices which are the most
\npopular patterns in Indonesia?<\/p>\n
After my appointment at Bank Indonesia (1999) I haven't
\nconducted any research on the topic ... (Earlier) I understood
\nthat there were many speculators on foreign exchange and property
\ntrading. They avoided paying tax; this was a practice of money
\nlaundering. To avoid paying tax has been a popular way (of money
\nlaundering) especially prior to the financial crisis.<\/p>\n
According to some estimates, the value of global money
\nlaundering activities per year is around US$400 billion. We may
\nnot have domestic estimates yet; but what is the impact on the
\nnation when money laundering is said to remain high in Indonesia?<\/p>\n
It's very risky. Internationally, foreign nations will be very
\ncautious in dealing with Indonesia. They, particularly the
\nforeign banks, will be suspicious about the sources of money from
\nIndonesia.
\nIn the past the practice of KKN was high but economic growth
\nremained high ...<\/p>\n
But we have to try to be more transparent ... or else we will
\nremain behind (on the FATF blacklist with Myanmar, Guatemala,
\nHungary, Nigeria and Egypt).<\/p>\n
We have to be transparent, accountable and disciplined.<\/p>\n
You said earlier that KKN was a chronic problem in Indonesia.
\nThe IMF has also pushed Indonesia to curb KKN. Do you see any
\neffective measures taken by the government to eliminate KKN?<\/p>\n
We should see this from the law enforcement side. The
\ngovernment has shown good will to curb KKN. But there are still
\nmany loopholes -- some people are treated exclusively like
\njournalists ... You get special counters to arrange for your
\nvehicle documents; a lecturer doesn't have this (facility). (I.
\nChristianto)<\/p>",
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"sponsor": "Okusi Associates",
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