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.