Financial intelligence unit<\/p>\n
The comprehensive amendments to Indonesia's Anti-Money
\nLaundering (AML) Law of 2002 that were enacted last month only
\njust spared the country from the harsh counter measures the
\nParis-based Financial Action Task Force (FATF) had threatened to
\nimpose.<\/p>\n
Indonesia remains in the FATF list of noncooperative countries
\nand territories. This means that financial institutions in
\ndeveloped countries affiliated with the Organization for Economic
\nCooperation and Development (OECD) are still required to give
\nspecial attention to businesses and transactions with persons,
\ncompanies and financial institutions in Indonesia.<\/p>\n
The FATF, the OECD anti-money laundering arm, which held its
\nlatest plenary meeting in Stockholm early this month, did take
\nnote of the significant improvements in Indonesia's AML law and
\nregulatory framework. However, as the FATF has yet to see how
\nthe reforms will be implemented, it gave Indonesia four months to
\nshow its records and performance for further evaluation in
\nFebruary.<\/p>\n
In this context, the launching on Monday of the Financial
\nTransaction and Report Analysis Center, which in many other
\ncountries is called financial intelligence unit, will go a long
\nway in demonstrating to the international community Indonesia's
\nstrong commitment to combat money laundering. As a politically
\nindependent body, the Indonesian financial intelligence unit will
\nplay a crucial role in the campaign against money laundering.<\/p>\n
Indonesia indeed has yet to demonstrate its political will to
\nfight money laundering, because almost 20 months after the
\nenactment of the AML law in March, 2002, not a single money-
\nlaundering case has thus far been brought to court even though
\nthe country is perceived as one of the most corrupt in the world.<\/p>\n
The Special Investigation Unit at Bank Indonesia, which had
\nperformed the function of a financial intelligence unit from
\nApril 2002 until Monday, had submitted 82 suspicious transactions
\ninvolving Rp 2.4 trillion (US$280 million) to the state police
\nfor further investigation and five cases have been filed with the
\nAttorney General's Office. But none of them have reached the
\ncourt.<\/p>\n
True, investigations and prosecution of money-laundering
\npractices require special technical competence to analyze complex
\nfinancial transactions and to construct strong legal evidence.
\nYet Indonesia's records so far seem to have been too poor to be
\nblamed only on a lack of technical competence.<\/p>\n
Many, including analysts at Bank Indonesia's Special
\nInvestigation Unit, suspect that corruption either within law
\nenforcement agencies such as the police and Attorney General's
\nOffice or within financial companies had been partly responsible
\nfor the miserably weak enforcement of the AML law.<\/p>\n
Lack of cooperation from law enforcement agencies and
\nfinancial institutions could be the main obstacle in the fight
\nagainst money laundering in the country. For example, over the
\npast 20 months only 38 of 138 commercial banks reported
\nsuspicious transactions to the central bank's Special
\nInvestigation Unit.<\/p>\n
Even though the AML law has been strengthened by the recent
\namendments, the financial intelligence unit will never be able to
\nperform its function properly without full cooperation from all
\nfinancial institutions, law enforcement agencies and all other
\nstate institutions related to financial services such as customs
\nand tax services and stock market watchdog, etc.<\/p>\n
Moreover, more clear-cut directives have yet to be issued to
\ncreate a conducive environment for cracking down on money
\nlaunderers and to give better protection for witnesses testifying
\nagainst suspected money launderers and the identity of those who
\nreport suspicious transactions.<\/p>\n
The government should further strengthen the financial
\nintelligence unit with a high-powered national coordinating
\ncommittee to secure full cooperation from other state
\ninstitutions. Cooperation and coordination are indeed important
\nbecause sharing of information among law enforcement agencies,
\nfinancial regulators and financial institutions is quite vital
\nfor an effective AML system.<\/p>\n
The staffing, organization and remuneration system of the
\nfinancial intelligence unit should steadily be strengthened to
\nenable it to help financial institutions build up a strong AML
\nmechanism and to ensure that they fully comply with the "know
\nyour customer" guidelines to detect suspicious transactions.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/financial-intelligence-unit-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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