PPATK warns insurance firms of money laundering schemes
PPATK warns insurance firms of money laundering schemes
Urip Hudiono, The Jakarta Post, Jakarta
An insurance company receives a customer, who wants to sign up
for a life insurance policy worth a whopping Rp 100 billion (US$
11 million) and makes no fuss in having to pay whatever premium
is required.
Eyeing a prospective deal at hand, the unsuspecting insurance
company welcomes the new business and fulfills the customer's
request.
However, within only a year of paying the premium in just
several installments, the customer cancels it and withdraws the
funds, agreeing to pay any required cancellation fee.
Although the company has verified that it did not fall victim
to any scam, common sense says that something fishy had just
occurred.
"And it might likely have been at the public's expense,
because the insurance company could have been used to launder
money," Ministry of Finance director for insurance Firdaus
Djaelani said on Monday during a seminar on money laundering.
For this, the directorate, together with the country's money
laundering watchdog, the Financial Transaction and Report
Analysis Center (PPATK), will continue discussing the issue with
insurance companies, and urging them to report any questionable
transactions to the center.
"We require every insurance company to establish a unit, or at
least assign a staff member, to monitor such transactions,"
Firdaus said.
Money laundering is the practice of transferring funds
generated from criminal activities -- graft, smuggling, drug
trafficking, terrorism -- by investing them in legitimate
businesses.
Fortunately, Firdaus said, almost all insurance companies in
the country have complied with the request.
From 16 insurance companies, 12 pension fund managers and 12
financing companies the directorate had surveyed this year, only
a few have not trained their staff on the issue. Data from the
Indonesian Insurance Council shows that there are some 160
insurance companies in the country.
"We can say that 90 percent of the companies have complied,"
he said. "And those who have not will be given sanctions, from
warnings to closing them down."
Meanwhile, PPATK vice chairman Bambang Setiawan asserted that
his office would also impose sanctions in accordance with Law No.
35/2003 on money laundering.
As of December, PPATK has received 1,149 reports on suspicious
transactions from 59 banks, three securities, three foreign
exchange dealers, one pension fund and one financing company.
Despite the establishment of the law and the PPATK, Indonesia
is still on the Financial Action Task Force's list of non-
cooperative countries since 2001, resulting in higher premiums
for international transactions and the rejection of letters of
credit issued by local banks.
An envoy from the Paris-based anti-money laundering watchdog
is expected to come to Indonesia in January next year, to review
what the government has done so far to cope with the problem.