Money laundering evident among state officials

Rendi A. Witular, The Jakarta Post, Jakarta

Despite Indonesia's removal from the Financial Action Task Force's (FATF) list of Non Cooperative Countries and Territories (NCCT) last month, money-laundering activities among high-ranking officials remain vigorous.

Chairman of the Financial Transaction Reports Analysis Center (PPATK) Yunus Hussein said on Monday that there had been a tendency among state and private financial institutions to protect the interests of certain officials against further investigation into their alleged involvement in money-laundering practices.

"There are a number of depositors registered with a state- owned bank serving the House of Representatives and Indonesian Military Headquarters who have made suspicious transactions. However, those activities have not been reported to us by the bank," he said after inking an agreement between the PPATK and the Ministry of Forestry.

Yunus claimed the financial institutions' reluctance to cooperate with the PPATK was partly due to executives' fear of losing their jobs if they forwarded the reports to the agency.

Another reason, he said, was that the institutions could not risk loosing vast funds that had been gained through corruption and held by the officials.

In order to force the financial institutions to cooperate, the PPATK has been planning to conduct an audit of their financial situations. It would also recommend to the agencies that oversee the institutions the imposition of heavy penalties for any violations.

According to Yunus, the institutions that refuse to report the suspicious financial transactions are those that have already been audited by the PPATK.

Indonesia was previously on the FATF's "blacklist" along with Nauru, Nigeria, the Philippines, Myanmar and the Cook Islands.

Last month, the Paris-based agency -- set up by developed nations of the Organization for Economic Cooperation and Development (OECD) -- removed Indonesia, the Cook Islands and the Philippines from its list after visits by FATF representatives to the countries, confirming that they have been effectively implementing anti-money laundering measures.

However, the FATF is still monitoring the three countries, which had set up systems for stricter customer identification, suspicious transaction reporting, bank examinations and legal means to investigate and prosecute money launderers.

In addition, they had developed financial intelligence units, which analyze financial data, coordinate national efforts and facilitate international cooperation.

By signing the agreement, Minister of Forestry Malam Sambat Kaban said the PPATK was expected to help the ministry in tracking down the bank accounts of government and state officials allegedly involved in illegal logging activities.

Kaban said there were some 20 bank accounts allegedly being used by illegal loggers to receive money from overseas buyers.

"We are now cooperating with the PPATK to track down those bank accounts and identify any officials involved in the crime," he said.