Containing money laundering<\/p>\n
By K. Basrie<\/p>\n
JAKARTA (JP): An executive of the International Narcotics
\nControl Board (INCB) has called on Indonesia to soon establish a
\nlaw against money laundering to strike at crimes related to
\nnarcotics and psychotropic substances.<\/p>\n
Visiting INCB president Dr. Oskar Schroder told The Jakarta
\nPost in an interview Wednesday that members of drug trafficking
\ncartels and other organized international crime syndicates have
\nalways found developing countries with sound economic growth like
\nIndonesia to be good havens for money laundering.<\/p>\n
"You can fight those big international drug trafficking gangs
\nand cartels efficiently only if you cut them off from their
\nfinancial means," said Schroder.<\/p>\n
The Vienna-based board is the quasi-judicial control organ for
\nthe implementation of the United Nations' drug conventions.<\/p>\n
According to Schroder, Indonesia's rapid economic development
\nneeds a huge amount of money and has led the government to
\nencourage foreigners to invest here.<\/p>\n
"Nobody knows exactly whether an investment is clean money or
\ndirty money. It's a problem," he said.<\/p>\n
Moreover, Indonesia "is susceptible to drug trafficking
\nbecause it's an assembly of over 17,000 islands," said Schroeder.<\/p>\n
Therefore, he said, Indonesia badly needs to establish a money
\nlaundering law immediately, based on the 1988 UN Convention.<\/p>\n
Giving no exact figures, Schroeder said drug trafficking
\nsyndicates always have millions of dollars in deposits which are
\nready to be "cleaned" in many legal projects all around the
\nworld, particularly in developing countries.<\/p>\n
Local bankers here have expressed worry about the absence of a
\nmoney laundering law.<\/p>\n
"Money laundering has been haunting our banking system," a
\nBank Indonesia director, Heru Soepraptomo, said at a seminar last
\nmonth, adding that the central bank had no clear-cut rules to
\nstop it.<\/p>\n
According to Sutan Remy Sjahdeini, a director of the publicly
\nlisted state-owned PT Bank Negara Indonesia 1946, Indonesia's
\nrigid regulations on banking secrecy and the absence of
\nregulations on money laundering have turned this country into a
\nhaven for money launderers.<\/p>\n
Worse still, criminals nowadays transfer their dirty money
\nbetween accounts and even by credit card across borders instead
\nof using suitcases, making it difficult for developing countries
\nto trace the money.<\/p>\n
The secretariat of Interpol, the world police organization
\nbased in Lyon, France, estimated the total amount of illicit drug
\ntransactions had thus far reached US$175 billion. Some Interpol
\nmembers are worried that the money might have been used to
\nfinance the activities of certain international terrorist groups.<\/p>\n
According to the chief of Indonesia's Coordinating Body for
\nDrug Control, Brig. Gen. (ret.) Tony Sidharta, Indonesia has
\nnever explicitly had a law against money laundering, due to its
\nopen-door policy.<\/p>\n
"But the members of the House of Representatives are now
\nrevising the old law on narcotics to comprise the rulings on
\nmoney laundering," said Sidharta, who also accompanied Schroder
\nduring the interview.<\/p>\n
Sidharta said hopefully, the revision will be completed in
\nMarch.<\/p>\n
A specific money laundering law, which will cover a wide range
\nof crimes, is still being deliberated at the House, he said.<\/p>\n
In the meantime, Indonesian authorities -- as stipulated in
\nthe Criminal Code -- have the right to seize a defendant's
\nproperty once they have collected enough material evidence to
\nsupport the action, said Sidharta.<\/p>\n
According to Heru, the Attorney General's Office is
\ncoordinating joint efforts between the central bank and the
\nCapital Market Supervisory Agency to draft a money laundering
\nlaw.<\/p>\n
Heru also said the central bank was considering establishing
\na rule requiring local banks to report large transfers from
\nforeign banks.<\/p>\n
"Such transfers need to be reported. If not, people will
\ncontinue offering to transfer large sums of money into our
\nbanks," Heru said, referring to agents which launder dirty money
\nfrom abroad.<\/p>\n
But do we have any estimates of the amount of drug money that
\nhas been laundered here?<\/p>\n
Secretary of the National Central Bureau for Interpol Brig.
\nGen. Ahwil Lutan said: "I have no idea about the amount. But the
\nfact is, most of the dirty money is kept at island states in the
\nPacific, where it is invested."<\/p>\n
So, there's no use worrying about money laundering in
\nIndonesia, Ahwil told the Post.<\/p>\n
"Among the reasons are first, a developing country like us
\nstill needs money for its economic growth and secondly, crimes
\ninvolving narcotics here are not as serious as those in the
\nUnited States, for instance," he said.<\/p>\n
The current popular drug among Indonesian youths is Ecstasy,
\nwhich is mostly imported from European countries.<\/p>\n
Acknowledging this fact, Schroder explained that most
\npsychotropic substances are produced in Europe, the home of big
\npharmaceutical factories.<\/p>\n
"Some European countries were hesitating to ratify the 1971 UN
\nConvention, but we of course try to keep on encouraging them. One
\nof their reasons for hesitating is to protect their own
\nindustries so they can export those substances without any
\ncontrol worldwide," Schroder said. "Many of the substances are
\nshipped to Africa, where the prices are much cheaper than those
\nof heroin or cocaine."<\/p>\n
The recent issuance of Indonesia's first law on psychotropic
\nsubstances, which was based on the 1971 UN Convention, was
\nwelcomed by INCB.<\/p>\n
"We're very satisfied with the news and the results we learned
\nabout during our visit here. We appreciate it very much that the
\nIndonesian government has made an enormous effort in taking steps
\nto help reduce the trafficking and misuse of these psychotropic
\nsubstances," he said. He hoped that more countries could follow
\nIndonesia's move.<\/p>\n
"The international drug control system can only work
\nefficiently if all the countries cooperate based on the UN
\nconvention and its implementation," he said.<\/p>\n
During his five-day visit here, which ended last Thursday,
\nSchroder met top-ranking officials related to the drug control
\nsystem, collecting data about progress and steps which had been
\ntaken by Indonesia so far. Among the officials he met were those
\nfrom the police, customs and the ministries of health, social
\naffairs, trade and industry, foreign affairs and justice, as well
\nas education and culture.<\/p>",
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