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.