PPATK officially operates as dirty money watchdog
Sari P. Setiogi, The Jakarta Post, Jakarta
The government officially launched on Monday the Financial Transaction and Report Analysis Center (PPATK) as the highest authority to combat money laundering in the country.
Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono, in his remarks to officially launch the operation of the agency, stated that the operation of the agency showed the government's commitment to fighting both trans- national crimes and internal crimes.
However, he also warned PPATK to keep high its transparency and accountability in order to avoid any possible excess.
PPATK was actually established in April 2002. But, until it officially commenced operations on Monday, its main function was to support the government in developing an anti-money-laundering policy.
Prior to PPATK's official launch on Monday, the role of supervising suspicious transactions in the country's financial sector was carried out by Bank Indonesia's Special Investigation Unit (UKIP).
"PPATK works to discover covert crimes related to money laundering practices," PPATK's chairman Yunus Husein said, during his speech at the inauguration ceremony.
The watchdog will collect, record and analyze all information reported by financial service providers, both as suspicious transaction reports (STR) and cash transaction reports (CTR).
Reports which indicate criminal activity will be forwarded to the police for further investigation.
PPATK will also give inputs and recommendations to the government on setting the national policy for preventing and fighting money laundering.
Yunus expected PPATK could help decrease the number of crimes related to money laundering, as well as creating a stable and trustworthy financial situation in the country, as part of the global fight against money laundering.
The Paris-based global anti-money-laundering watchdog, the Financial Action Task Force (FATF), has listed Indonesia among the uncooperative countries and territories (NCCTs) in the fight against money laundering since June 2001, together with seven other countries, including the Philippines, Nigeria, Egypt and Myanmar.
FATF was set up by developed nations of the Organization for Economic Cooperation and Development (OECD).
"Until (and including) the last FATF (plenary) meeting in Stockholm early this month, we are still on their list. Legally, we have fulfilled their standards to be removed from the list, but they are still waiting for our implementation of moves to fight money-laundering crimes here," said Yunus.
During the ceremony, UKIP's director M. Ali Said Kasim handed over to PPATK 20 suspicious transaction reports (STR) which were still being investigated.
Law No. 25/2003 on Money Laundering defines money laundering as the practice of converting money generated from corruption, bribery, smuggling, banking-related crimes, drug-related crimes, people trafficking, gambling and terrorism into legal investments.
Money laundering can be broken into three major actions: placement (placing illegally-gained funds into a financial system), layering (transferring illegally-gained assets into a financial system) and integration (using illegally-gained assets that have been placed in a financial system).
Over the past eight months, UKIP recorded 291 cases of STR worth Rp 4.2 trillion (US$469.54 million) and reported by 31 banks.
"Of the number, 271 have been processed and 82 cases, valued at Rp 2.42 billion, have been passed to the police for further investigation," he said.
The 82 cases reported to the police were dominated by banking- related crimes (27 cases worth Rp 1.95 trillion), fraud (18 cases worth Rp 158.3 billion), corruption (12 cases worth Rp 60 billion), embezzlement (seven cases worth Rp 51.75 billion), terrorism-related funds (five cases worth Rp 500 million) and counterfeiting (two cases worth Rp 253 million).