Indonesia drafting law to curb money laundering

JAKARTA (JP): The government is preparing a draft law on money laundering in a bid to curb inflows of illegal money into and out of the country, said a senior minister on Thursday.

Minister of Justice Muladi said the introduction of the money laundering law would be in line with the government's strong commitment to eliminate all forms of corruption, collusion and nepotism (locally known as KKN).

He said the draft law was still being formulated and would be submitted to the new House of Representatives, to be formed in September.

Muladi, who is also minister/state secretary, said the bill on money laundering would stipulate activities relating to money laundering.

A clear definition of money laundering is needed so that even a bank clerk will be able to detect possible involvement of their clients in such illegal practices.

"If a bank official discovers significant activity in a bank account, he should take the time to make a special report for further analysis," he said.

The existence of a money laundering law in Indonesia was long overdue, he said, adding that cases of money laundering in the country may have occurred, but they could not be proved or prosecuted because of the absence of a law..

"I suspect Singapore is a safe place for money laundering by Indonesian citizens," Muladi said.

He said his suspicions were based on the fact that the neighboring country had never agreed to sign an extradition agreement with Indonesia.

Deputy governor of the central bank Subarjo Joyosumarto said the central bank was ready to support the implementation of a money laundering law.

He said that under the new law on the monitoring of foreign exchange traffic, travelers were required to report any foreign exchange transaction.

"The report includes the type and purpose of transaction, the people involved in the transaction and the destination and origin of the transaction," Subarjo said.

He said the newly ratified banking law allows the central bank to disclose a depositor's accounts following authorization from the minister of finance, the attorney general and the police or other related government offices.

The draft of the money laundering law is being prepared by a team involving the Ministry of Justice, the Attorney General's Office and the central bank.

The team is led by Romli Atmasasmita, the director general of law at the Ministry of Justice. (udi)