Govt prepares bill to check money laundering, tax evasion
Govt prepares bill to check money laundering, tax evasion
JAKARTA (JP): The government is drafting a financial
transaction report bill designed to thwart money laundering, tax
evasion and corrupt practices.
The chairman of a special team preparing the bill, Amien
Sunaryadi, said on Thursday it would better equip the legal
system with data to track white-collar crime.
"So far, in any corruption case, the government has only been
able to recover about 5 percent to 10 percent of the lost money
because legal apparatus could not track where the money went," he
said at a discussion held by the Indonesian Transparency Society.
"With this bill, all movement of big money will be recorded by
a special agency and, therefore, legal apparatus could follow the
money to track the crime."
According to a draft bill, prepared by the special team at the
office of the coordinating minister for development
supervision/state administrative reforms, all suspicious
transactions must be reported to a financial transaction
recording agency, to be set up under a separate law.
International fund transfers and domestic fund transfers
exceeding particular amounts would also be reported to the
agency.
The bill has yet to specify the value of transactions or
transfers which must be reported. Amien said the team would refer
to other developed countries which implemented the requirement.
The United States, for instance, requires all transactions
exceeding US$10,000 to be reported to the Financial Crime
Enforcement Network. Australia requires transactions over
A$10,000 to be reported to the Australian Transaction Reports and
Analysis Center.
Those required by the bill to report the transactions include
banks, financial institutions, insurance firms, insurance
brokers, securities brokers, precious metal traders and
traveler's check issuers.
The agency must be an independent body under the Ministry of
Finance, like in the U.S., or the Ministry of Justice, as in
Australia, or the central bank.
Amien believed it would be best for Indonesia to use the
latter model because it would reduce the likelihood of
duplication in reporting.
"This agency will be very powerful because it could interfere
in anybody's privacy. Thus, its operation must be controlled by a
special team at the House of Representatives," Amien said.
Entitled to access data at the agency include the National
Police, the Attorney General's Office, the Supreme Audit Agency,
the Development Finance Comptroller, the Stock Market Supervisory
Agency, the Directorate General of Taxes, the Directorate General
of Customs and Excise and the provincial revenue offices.
With enough data from the transaction report agency, the
police would be able to track white-collar crime or even cross-
broker drug trafficking because the latter normally involved
international fund transfers.
Authorities could also track money laundering in and out of
the country.
The government could also increase its tax and nontax revenues
the tax office could track tax evasion practices through transfer
pricing, a reinvoicing center and unrealistic debt to equity
ratio.
Amien said he anticipated businesspeople would not be
receptive to the bill because it provided no benefit to them and
was bothersome to their operations.
Institutions which would be required to report financial
transactions would also not be too supportive of the bill because
it would definitely increase their costs.
Amien defended the bill as necessary and timely to build
people's confidence in the business sector and particularly the
banking industry.
Clauses concerning bank secrecy in the banking law have the
potential to become a hurdle in the implementation of the
financial transaction report law, Amien said.
"If our banking law gives too much protection to those who
break the law, I think we need to amend that law," he said. (rid)