Thu, 14 Aug 2003

FATF requests mutual legal assistance law

Fitri Wulandari, The Jakarta Post, Jakarta

The Financial Action Task Force (FATF), a global watchdog sponsored by developed nations to curb money laundering, has asked the government to formulate a special law on mutual legal assistance that would enable Indonesia to share legal information with other countries in the fight against this form of crime.

The law would basically allow a foreign country to participate in investigating money laundering crimes in Indonesia, especially where these are committed by the citizens of the country in question.

This is part of a set of demands made by the FATF in order for Indonesia to be excluded from the list of countries deemed uncooperative in the global fight against money laundering.

Another demand is for the amendment of the country's existing anti-money laundering law.

Yunus Husein, the chairman of the Financial Transaction and Report Analysis Center (PPATK), said the article on mutual legal assistance in the revised anti-money laundering law was deemed insufficient.

"In article 44, mutual legal assistance only covers the search for evidence. But the FATF wants to include the search for and confiscation of documents, and other evidence that a crime has been committed," Yunus told reporters on Wednesday.

The FATF considers mutual legal assistance to be crucial to the fight against money laundering as it is a cross-border crime.

However, Yunus said the request would be difficult to accede to as passing a new law would take a long time.

"We have told the FATF that this would be too difficult for us. We have decided to include the question of mutual legal assistance in the amendment law," he said.

Money laundering is the practice of converting money generated from corruption, bribery, smuggling, bank-related crimes, drug- related crimes, human-trafficking, gambling and terrorism into legal investments.

The government has completed drafting the bill amending the 2002 anti-money laundering law, but this has yet to be debated by the House of Representatives.

"The House of Representatives has scheduled the deliberation of the amendment bill for Aug. 27, so hopefully before the end of September, the House will have passed the bill," Yunus said.

The FATF will convene in early October. And if by that time the deliberations have not been completed, serious financial and economic sanctions may be imposed by the developed nations against Indonesia, which some say could cause serious harm to the country's economy.

The FATF has been demanding a revision of the anti-money laundering law as some of the law's articles do not meet international standards. For instance, the current law requires banks and financial institutions to report suspicious transactions valued at Rp 500 million or more. This clause will now be replaced by one stipulating that all dubious transactions have to be reported to the authorities.

Elsewhere, Yunus also urged the government to issue a presidential decree to provide a stronger legal basis for the PPATK.

The PPATK is a body tasked with analyzing and investigating questionable financial transactions.

At present, the body is still funded by Bank Indonesia. Yunus said that the government had yet to disburse some Rp 8 billion to finance the operation of the PPATK. The funds were supposed to have been disbursed in July.