Money laundering evident among state officials

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.