Int'l help needed to fight money laundering

Int'l help needed to fight money laundering

Rita A.Widiadana, The Jakarta Post, Nusa Dua, Bali

Indonesian Minister of Justice and Human Rights Yusril Ihza
Mahendra said on Wednesday the country needed help from its
neighboring countries as well as international organizations to
fight money laundering and terrorist financing.

Speaking after the closing of the two-day conference on
combating money laundering and terrorist financing, Yusril was
outspoken in referring directly to Singapore, which he said
persistently refused to sign an extradition agreement with
Indonesia. Indonesia's push for the extradition agreement was
part of an attempt to bring to court a number of Indonesian
citizens suspected of committing economic crimes and hoarding
their savings in various financial institutions in the city-
state.

He said if the extradition agreement had been signed,
Indonesia would have been able to reclaim some of the money from
the accounts of those who had received Indonesian Bank Liquidity
Assistance Funds (BLBI), which amounted to around Rp 180 trillion
(US$200 billion).

"If we succeed in reclaiming these funds, we wouldn't have to
beg for assistance from the International Monetary Fund (IMF),
for instance, or from other international financial institutions
to support our economy," he added.

During their summit on Monday, both President Megawati
Soekarnoputri and Singaporean Prime Minister Goh Chok Tong did
not touch the extradition issue.

Through the conference, Yusril said, Indonesia obtained strong
commitment and help from a number of participating countries and
institutions, including the United States, Australia, the Asian
Development Bank (ADB) and various others.

"The United States has shown its strong commitment to help
Indonesia by providing training assistance and other capacity
building activities to the Indonesian police and the Indonesian
Armed Forces (TNI) to fight against terrorism and related
crimes," he said.

Indonesia, the minister added, had just obtained legislation
on the issue only in April this year but had yet to build a
comprehensive system or institutions to fight money laundering,
corruption and related economic crimes.

The law on money laundering, which was passed in order to
comply with international commitments, covers 15 predicated
crimes including money laundering, terrorism and punishable
criminal acts such as corruption, bribery, smuggling of goods,
smuggling of immigrants, banking offenses, related drug crimes
and trade in women and children.

The minister went on to say that Indonesia would also ask the
U.S. and other countries to help Indonesia in investigating money
illegally swindled from the Indonesian Central Bank through
sharing information and expertise.

"We have to admit that Indonesia must learn a lot from more
experienced countries in dealing with money laundering and
terrorism financing," Yusril said. For example, he said, the
transfer of $30,000 from a Malaysian bank to Indonesia to finance
the recent Bali bombing went undetected by the Central Bank.

"The amount of money was insignificant as compared to the
impact caused by the Bali bombing since, as a result, the
government must now revise the state budget. The country also
suffered a loss of billions of dollars due to the bombings in
Bali and in Makassar, South Sulawesi, in early December," he
said.

Another important point is that it is extremely difficult to
detect money-laundering activities through informal financial
institutions.

"Many people allegedly involved in this crime often spend
their money in cash. Therefore, we really need a strong legal and
law enforcement system to deal with this problem," he said.

In addition to these forms of assistance, the ADB has pledged
to provide $650,000 in technical assistance to help a number of
countries in the Asia-Pacific, including Indonesia, the
Philippines and Thailand, to counter money laundering activities
in the region.

The two-day conference, which was co-hosted by Indonesia and
Australia, has resulted in a number of conclusions and action
plans.

The conference stressed three important issues: building
legislative frameworks and networks to combat money laundering
and terrorist financing among participating countries, and
increasing capacity building activities, close cooperation and
coordination.

Australian co-chairman Chris Moraitis said the results of the
conference were not merely static statements. "The conference
brought together experts on money laundering from all over the
world to share their expertise with their counterparts from the
Asia-Pacific countries," said Moraitis, who is a senior legal
advisor of Australia's foreign affairs ministry.

The conference participants recognized the importance of
combating money laundering within the framework of their domestic
laws and international obligations, and of enacting the
appropriate legislation to combat money laundering.

Participants acknowledged that money laundering was a
transnational crime which could involve many countries.
Therefore, they expressed their strong commitment and intent to
forge cooperation to furthering existing instruments and efforts
aimed at strengthening the capacity of states to respond,
collectively and individually, to the threats posed by money
laundering and terrorist financing.

The conference also underlined the importance of strengthening
existing mechanisms in the Asia-Pacific region to prevent,
criminalize and combat money laundering. Mutual legal assistance
among the participating countries would cover the investigation
and prosecution of money laundering and terrorist financing, the
tracing, freezing and confiscation of proceeds of crimes and of
funds destined for terrorist sources.