Banks urged to report suspicious transactions

Urip Hudiono, The Jakarta Post, Jakarta

The government has strongly urged financial institutions to report any suspicious transactions they might have come across, as Indonesia races against time to be dropped from the Financial Action Task Force (FATF) list of countries deemed uncooperative in fighting global money laundering.

"This is a serious problem. The number of reports is minuscule compared to the number of existing financial institutions, and compared to indications that many crime-related transactions are occurring in the country," Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti said on Tuesday after a meeting between financial institutions and the Financial Transaction and Report Analysis Center (PPATK).

Dorodjatun, who is also deputy head of the country's anti- money-laundering committee, said responding to the government's call was essential in getting Indonesia off the FATF list of non- cooperative countries and territories (NCCT).

The FATF is a global money laundering watchdog set up by the Organization for Economic Cooperation and Development (OECD).

During its latest meeting in February, the Paris-based watchdog retained Indonesia on its NCCT list, despite the country's efforts to combat money laundering, such as amending Law No. 15/2002 on money laundering, establishing the PPATK and passing Law No. 25/2003, which requires banks to have a thorough knowledge of their customers.

The FATF plans to convene again in June and meet with the government to review Indonesia's seriousness in cracking down on money laundering.

PPATK head Yunus Husein said that as of March 30, the center had received only 558 reports of suspicious transactions from 37 banks, one pension fund manager, one funding institution and one securities company out of 137 banks, 393 pension fund managers, and hundreds of funding institutions and securities companies.

Meanwhile, none of the 2,130 rural credit banks (BPR), 814 foreign exchange traders and money delivery companies, 261 insurance companies, 178 stock brokers, 18 custodian banks and 10 mutual fund companies had filed any reports with the PPATK.

Dorodjatun detailed the possible sanctions that may be imposed on NCCTs, including halting correspondence between NCCT banks and their counterparts in FATF countries, rejecting letters of credit drawn by NCCT banks and imposing tight scrutiny and premium charges on any transactions conducted by NCCTs with foreign companies, which would create a high-cost economy.