RI must set up anti-money laundering agency: Official

A'an Suryana, The Jakarta Post, Jakarta

Indonesia had yet to be removed from a blacklist of countries accused of being safe havens for dirty money, as it had still failed to comply with requirements imposed by the anti-money laundering Financial Action Task Force (FATF), a central bank official said on Monday.

"An anti-money laundering agency has not been established here although it has been demanded by the international task force," Bank Indonesia deputy director Yunus Husein said.

Yunus was discussing recent comments by the Paris-based task force that Indonesia was still not cooperating with the world's anti-money laundering drive.

Yunus acknowledged, however, that Indonesia, which is desperately trying to restore foreign investor confidence, had made significant progress in the anti-money laundering drive. It had successfully passed an anti-money laundering law, which had been welcomed by the international community.

Last August, or four month after the law was approved by president Megawati Soekarnoputri, Bank Indonesia swiftly embarked on tighter banking supervision and found 40 financial transactions at seven banks, which were allegedly connected with money laundering.

Two were foreign banks and the remainder were local banks.

Yunus said the steps were not enough to restore foreign confidence and remove Indonesia from the blacklist.

"The international community is waiting for more comprehensive implementation of the anti-money laundering law," Yunus said.

He said the establishment of the anti-money laundering agency, to be called the Financial Transaction and Report Analysis Center (PPATK), would be a focal point before Indonesia could be removed from the blacklist.

The agency would be of high importance as it would be in charge of analyzing and investigating reported suspicious transactions, as well as individuals and financial institutions which failed to report suspicious financial transactions.

The agency was supposed to be established last August.

"The decision rests in the hands of President Megawati," said Yunus.

Money laundering is the practice of converting money generated from corruption, bribery, smuggling, banking-related crimes, drug-related crimes, human trafficking and terrorism into legal investments.

FATF is an international organization, which is vested with power to take steps against governments included on the blacklist. The steps included warning multinational corporations from doing business in those countries and forcing banks to collect detailed information before conducting transactions with individuals or companies in those countries.

Indonesia and 14 other countries are blacklisted by the international agency.

The countries are the Cook Islands, Dominica, Egypt, Grenada, Guatemala, the Marshall Islands, Myanmar, Nauru, Nigeria, Niue, the Philippines, Russia, St. Vincent, the Grenadines and Ukraine.