Prompt approval of bill on money laundering sought

JAKARTA (JP): The government expects the money laundering draft bill now being deliberated by the House of Representatives to be passed this year, as part of the country's commitment to the international crusade against the crime.

The person in charge of drafting laws and legislation at the Ministry of Justice and Human Rights, Sri Hariningsih, said she hoped the House would accelerate the deliberation and pass the bill into law this year.

"We badly need such law as there are indications that Indonesia has become one of the favorable destinations for the illegal business, despite the fact that we have a responsibility to our international partners," she said, adding that the bill was submitted to the House in early June.

Money laundering is the practice of transferring money obtained from crimes such as corruption, bribery, smuggling, trade in drugs and psychotropic substances, gambling and terrorism, into legal investments.

This complex white-collar crime is rampant in developing countries that lack measures to detect and prevent it.

"We don't want to be branded as noncooperative in the fight against international organized crime," Hariningsih said during a workshop on the money laundering bill. The workshop was jointly held by the Department of Law at the University of Indonesia and the University of South Carolina here on Saturday.

Hariningsih said the bill stipulated the establishment of a national commission to eradicate money laundering. "The national commission would uncover evidences related to the crime, in cooperation with the police and state prosecutors."

"The commission will be authorized to assess suspicious transactions reported by any financial institution," she said.

According to the bill, possible suspicious transactions are those equivalent to Rp 100 million (if they involve foreign currency) or more, either in cash or electronic transactions.

The directorate-general of customs is also required to report to the commission any cash amounting to Rp 100 million or more brought into or out of the country.

"Any financial institutions which fail to report to the commission within 14 days after a suspicious transaction takes place will receive a sanction, ranging from a warning to the revocation of their business license," she said.

For those found guilty of money laundering, the bill calls for sentences of between five years and 15 years, plus fines from Rp 5 billion to Rp 15 billion.

Indonesia has been put on a money laundering blacklist and is now under the scrutiny of the industrialized countries' Paris- based Financial Action Task Force (FATF) for not doing enough to curb the internationally organized crime.

The FATF was formed by G-7 member countries in 1989 to fight money laundering worldwide. The crime is estimated to be a US$600-billion-a-year enterprise worldwide.

Criminal law expert Harkristuti Harkrisnowo warned the draft bill in the House might not be effective without tight control over the implementation of bank rulings. "Businesses should also actively participate in detecting the crime since the law enforcement institutions here have yet to catch up with sophisticated crimes."

"Witnesses in (money laundering) cases should be well protected by the state, since the cases are hard to prosecute due to a lack of evidence, which is usually neatly concealed," Harkristuti remarked.

The central bank's deputy director of legal affairs, Yunus Husein, told the workshop that Bank Indonesia had introduced a "Know Your Customer" principle to curb money laundering in the banking sector.

Hariningsih said the bill would not violate the principle of banking secrecy or overlap the law on the central bank.

"If there are any conflicting articles in the two laws, then the law on Bank Indonesia will be adjusted," she said. (bby)