Money laundering measures could risk RI competitiveness<\/p>\n
Zakki P. Hakim, The Jakarta Post, Jakarta<\/p>\n
In its effort to remove Indonesia from the list of non-
\ncooperative countries in the global fight against money
\nlaundering, the government should not adopt measures that would
\nbe harmful to local businesses and affect competitiveness, a
\nbusiness group says.<\/p>\n
Indonesian Chamber of Commerce and Industry (Kadin)
\nrepresentative Thomas Darmawan said the government should
\nconsider input from the business community before adopting any
\nanti-money laundering measures set by international institutions.<\/p>\n
"The measures could mean more paperwork and confirmations,
\nwhich would eventually result in extra costs for exporters and
\nimporters," Thomas told The Jakarta Post over the weekend.<\/p>\n
International money laundering watchdog Financial Action Task
\nForce (FATF), a Paris-based agency set up by some developed
\nnations, decided on Friday to retain Indonesia and other five
\nnations on its list of non-cooperative countries and territories
\nin the battle against money laundering.<\/p>\n
However, FATF has agreed to send their envoys, possibly in
\nJanuary next year, where Indonesia might be able to convince the
\nglobal watchdog to remove the country from the list by presenting
\nmeasures adopted by the government to stamp out money laundering.<\/p>\n
Thomas urged government to negotiate with the FATF into not
\naccepting rules that would hamper businesses in the country.<\/p>\n
"The business community here fully supports efforts to fight
\nmoney laundering, but we must be careful in adopting or ratifying
\ninternational regulations as they could unnecessarily hamper
\nbusinesses in the country by creating new costs," he said.<\/p>\n
On the list of non-cooperative countries since 2001, Indonesia
\nrisks several sanctions, which include higher risk premiums
\nimposed on local firms when making transactions with
\ninternational firms; termination of correspondence alliances
\nbetween local banks and banks in member countries of FATF; and
\nthe rejection of letters of credit (L\/Cs) issued by local banks.<\/p>\n
Publicly listed Bank Negara Indonesia president Sigit Pramono
\nsaid that although his bank had yet to suffer from such negative
\nconsequences, he acknowledged the risks.<\/p>\n
"There are risks that corresponding overseas banks might
\ncomplicate procedures in transactions with local banks. That
\nwould be the biggest threat. And it could happen at any time,"
\nSigit told the Post.<\/p>\n
He said that it was the central bank's responsibility to
\nensure all banks meet international prudential management
\nprinciples, which include the "know-your-customer" concept,
\nrequiring banks to know where their customers' money come from.<\/p>\n
Many banks still neglected checking up on their clients and
\nmost customers preferred banks with less procedures than banks
\nwith rigid rules, he said.<\/p>\n
Money laundering is the practice of transferring funds
\ngenerated from criminal acts by investing them in legitimate
\nbusinesses. Such criminal acts include corruption, bribery,
\nsmuggling, banking-related crimes, drug-related crimes, human
\ntrafficking, gambling and terrorism.<\/p>\n
Indonesia's Financial Transaction and Report Analysis Center
\n(PPATK) chairman Yunus Husein said there had been several cases
\nwhere local banks had already encountered difficulties in dealing
\nwith foreign banks.<\/p>\n
"Bank Mandiri had to have additional inquiries in London," he
\nsaid. Moreover, an Indonesian was once denied to exchange
\ncurrencies in the Netherlands, due to the non-cooperative list
\nstatus, he said.<\/p>\n
Indonesia has made some attempts to get off the list by
\nadopting several measures, but to no avail. They include the
\ndrafting of the anti-money laundering law and the establishment
\nof PPATK.<\/p>\n
Under the law, PPATK is tasked with collecting, recording and
\nanalyzing all suspicious financial transactions provided by banks
\nand non-bank financial institutions in the country. PPATK has the
\nauthority to carry out audits on banks and other financial
\ninstitutions.<\/p>\n
However, PPATK has no authority to freeze assets and\/or
\naccounts belonging to suspected money launderers, monitor phone
\ncalls or e-mail, or secretly record interviews or conversations
\ninvolving suspected money launderers.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/money-laundering-measures-could-risk-ri-competitiveness-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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