Indonesia still 'non cooperative' on money laundering

Indonesia still 'non cooperative' on money laundering

Tony Hotland, The Jakarta Post, Jakarta

International money-laundering watchdog Financial Action Task
Force (FATF) decided on Friday to retain Indonesia and five other
nations on its list of non-cooperative countries and territories
in the battle against money laundering.

No immediate details were available on specifically why the
Paris-based organization decided to keep Indonesia on its list of
uncooperative countries, despite Indonesia's recent amendment to
the money laundering law.

Indonesia's Financial Transaction and Report Analysis Center
(PPATK) chairman Yunus Husein said on Friday there were three
nagging problems that the country had to resolve in order to get
off the list.

First, Indonesia's money-laundering law must identify clearly
and in greater detail, any transaction that can be categorized as
money laundering and must impose harsh sanctions on violators.

Next, the adoption of mutual legal cooperation with other
countries regarding money laundering, and thirdly, there must be
an operable reporting system on suspicious financial transactions
by banks to the central bank, or Bank Indonesia.

Yunus also said that PPATK had sent an invitation to FATF to
send its representatives to Indonesia and review the
infrastructure, including laws and regulations, as well as the
efforts already adopted by the government to stamp out money-
laundering practices in the country.

He said FATF had agreed to send their envoys, possibly in
January 2005.

"Hopefully, after they come here and have discussions with us,
they will remove us from the list in their next meeting in
February," Yunus explained.

Besides Indonesia, according to an AFP report, those remaining
on the list are the Cook Islands, Myanmar, Nauru, Nigeria and the
Philippines.

However, the FATF decided to withdraw counter-measures against
Myanmar and Nauru as the two nations "have now introduced new
measures to remedy deficiencies", but would keep them on the list
until further measures were taken.

FATF president Jean-Louis Fort told a news conference that
Myanmar had adopted mutual assistance legislation and that Nauru
had taken important steps to stamp out offshore banks.

FATF was set up by developed nations of the Organization for
Economic Cooperation and Development. Indonesia has been on the
list of non-cooperative countries since June 2001.

Being on the list, Indonesia is considered a high-risk country
to make financial transactions in. Consequently, international
financial institutions often impose premium charges on
transactions involving Indonesian financial institutions.

Also, being on the list often makes it very difficult for
Indonesians living overseas to open accounts, especially in
branches of multinational financial institutions.

Indonesia has made some attempts to get off the list by
adopting a number of measures, but to no avail. They include the
drafting of the anti-money laundering law and the establishment
of PPATK.

Under the law, PPATK is tasked with collecting, recording and
analyzing all suspicious financial transactions provided by banks
and non-bank financial institutions in the country.

PPATK has the authority to carry out audits on banks and other
financial institutions and freeze assets and/or accounts
belonging to suspected money launderers.

It is also authorized to monitor phone calls and e-mail, as
well as to secretly record interviews or conversations involving
suspected money launderers.

Yunus said he hoped that the new government under President
Susilo Bambang Yudhoyono would do something to lift Indonesia off
of the list of non-cooperative countries.

"I'm sure Pak Susilo understands the urgency of this issue
since he was the leader of the committee when he was still the
Coordinating Minister for Political and Security Affairs," he
said.