RI removed from money laundering list

RI removed from money laundering list

Rendi A. Witular, The Jakarta Post/Jakarta

After four years of pleading by the government, the global money
laundering watchdog, the Financial Action Task Force (FATF), has
finally removed Indonesia from its list of Non Cooperative
Countries and Territories (NCCT).

The announcement is expected to greatly improve international
financial institutions' confidence in Indonesia, which is still
considered to be marred by corruption and legal uncertainty.

Coordinating Minister for the Economy Aburizal Bakrie said the
government managed to convince the FATF over its efforts in
complying with the regulations and recommendations set out by the
task force.

"I am glad (about their decision) because it will help reduce
our country risk," he told the press on Friday at the State
Palace.

The decision was made after the FATF convened in Paris on
Wednesday to review the list and at the same time decide the fate
of Indonesia.

Since 2001, Indonesia has been on the "black" list along with
Nauru, Nigeria, the Philippines, Myanmar and the Cook Islands.
But after the meeting, Myanmar, Nauru and Nigeria remained on the
NCCT list.

The other three countries -- Indonesia, the Cook Islands and
the Philippines -- were removed from the list after recent visits
by FATF representatives to the countries, confirming that they
have been effectively implementing anti-money laundering
measures.

The Paris-based agency, set up by developed nations of the
Organization for Economic Cooperation and Development (OECD),
said in a statement that the three countries had applied systems
with stricter customer identification, suspicious transaction
reporting, bank examinations and legal capacities to investigate
and prosecute money launderers.

In addition to that, the three countries had developed
financial intelligence units, which analyze financial data,
coordinate national efforts and facilitate international
cooperation.

The FATF will now monitor the implementation of these measures
in the three countries to ensure that they sustain their recent
commitments and progress.

With the decision, Aburizal was hopeful that international
rating agencies would eventually upgrade Indonesia's ratings
soon.

"The decision will enable Indonesia to avoid higher risk
premiums and interest rates imposed on the government and local
firms when making transactions with international firms or when
issuing bonds or borrowing money," he said.

Another advantage is that it means there is now little risk of
a termination of correspondence alliances between domestic banks
and banks in member countries of the FATF; and the rejection of
letters of credit (L/Cs) issued by local banks.

"Other countries will no longer put us on their suspicious
lists when doing financial transactions with us," said Aburizal.

The government has taken several important steps to be
excluded from the noncooperative list, including passing an anti-
money laundering law and establishing the Financial Transaction
and Report Analysis Center (PPATK).

PPATK has audited the country's financial institutions to
disclose money laundering activities.

PPATK chairman Yunus Hussein said the FATF had outlined six
recommendations for Indonesia to be immediately implemented in a
bid to sustain its position in the future.

The recommendations include intensifying financial audits for
small banks, improving the audit process and systems, timely
prosecution process, capacity building for PPATK and its tasks,
drafting of a bill on mutual legal assistance for money
laundering suspects and widening the authority of PPATK.