RI unwittingly a party to money laundering: BI<\/p>\n
JAKARTA (JP): Bank Indonesia has admitted that some dirty
\nmoney from international organized crime may have entered
\nIndonesia in the form of legal foreign investment via a complex
\nmoney laundering process.<\/p>\n
Yunus Husein of Bank Indonesia's directorate for legal affairs
\nsaid on Friday that the country's free foreign exchange system,
\nand the strong appetite for foreign investment amid a low saving-
\ninvestment gap were among factors encouraging the inflow of the
\nmoney.<\/p>\n
\"If you ask me whether there's ill-gotten money coming here,
\nof course there is. But it's like the wind, you know it exists
\nbut you can't hold it,\" Yunus told a seminar on money laundering.<\/p>\n
Former deputy of the national police chief Koesparmono Irsan
\nwas also convinced that international drug cartels had targeted
\nIndonesia, like other developing nations, as a place to recycle
\ntheir money.<\/p>\n
\"They (drug cartels) have been enthusiastic in investing their
\nmoney in developing nations including Indonesia,\" said
\nKoesparmono, also a speaker in the seminar.<\/p>\n
\"There's a huge possibility that some of the foreign loans
\n(investments) entering Indonesia are directed here for money
\nlaundering,\" he added.<\/p>\n
Money laundering is the practice of converting ill-gotten
\nwealth, mostly obtained from drug runs, into legal investments
\nparticularly in developing nations that lack measures to prevent
\nit.<\/p>\n
According to some estimates, the volume of global money
\nlaundering activities per year was around US$400 billion.<\/p>\n
Despite the current political and economic problems, Indonesia
\nremains an attractive country for investment particularly as the
\nIndonesian Bank Restructuring Agency (IBRA) is offering some Rp
\n600 trillion (US$65 billion) worth of various banking assets for
\nsale at discounted rates. The agency is mandated to raise cash to
\nhelp finance the huge state budget deficit.<\/p>\n
Last year, IBRA raised around Rp 18.9 trillion in cash from
\nthe sale of banking assets, and this year it is targeted to raise
\nsome Rp 27 trillion.<\/p>\n
The government is also offering to sell state-owned companies
\nvia initial public offering and private placement. The target is
\nto raise some Rp 6.5 trillion in privatization proceeds.<\/p>\n
Yunus said that Indonesia was facing a dilemma over the money
\nlaundering problem.<\/p>\n
He said that there has been strong international pressure for
\nthe country to participate in the curbing of the global money
\nlaundering problem.<\/p>\n
But he added that the crisis-hit country badly needed the
\nforeign investment.<\/p>\n
\"There has been heavy international pressure ...,\" he said,
\nadding that the country risked being isolated if it failed to
\nrespond to the pressure.<\/p>\n
He explained that as part of the response, the government and
\nBank Indonesia had jointly drafted a law on anti-money
\nlaundering.<\/p>\n
He added that the draft law had been proposed to the House of
\nRepresentatives. It is not clear when the legislators would
\napprove the bill.<\/p>\n
Yunus said that according to the draft law, money coming from
\ncorruption, smuggling, banking crime, narcotics and drug
\noperations, terrorism, and the trading of women, children and
\nslaves were considered as ill-gotten money.<\/p>\n
Yunus said that if Indonesia declined to participate in the
\ninternational effort to curb money laundering, the so-called
\nFinancial Action Task Force of the G-7 nations might include the
\ncountry in its \"hit list.\"<\/p>\n
He said that the G-7 nations had vowed to cut bank dealings
\nwith countries that declined to halt the flow of such money.<\/p>\n
\"If this happens, domestic banks will also suffer,\" he said.
\n(rei)<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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