RI unwittingly a party to money laundering: BI
RI unwittingly a party to money laundering: BI
JAKARTA (JP): Bank Indonesia has admitted that some dirty
money from international organized crime may have entered
Indonesia in the form of legal foreign investment via a complex
money laundering process.
Yunus Husein of Bank Indonesia's directorate for legal affairs
said on Friday that the country's free foreign exchange system,
and the strong appetite for foreign investment amid a low saving-
investment gap were among factors encouraging the inflow of the
money.
"If you ask me whether there's ill-gotten money coming here,
of course there is. But it's like the wind, you know it exists
but you can't hold it," Yunus told a seminar on money laundering.
Former deputy of the national police chief Koesparmono Irsan
was also convinced that international drug cartels had targeted
Indonesia, like other developing nations, as a place to recycle
their money.
"They (drug cartels) have been enthusiastic in investing their
money in developing nations including Indonesia," said
Koesparmono, also a speaker in the seminar.
"There's a huge possibility that some of the foreign loans
(investments) entering Indonesia are directed here for money
laundering," he added.
Money laundering is the practice of converting ill-gotten
wealth, mostly obtained from drug runs, into legal investments
particularly in developing nations that lack measures to prevent
it.
According to some estimates, the volume of global money
laundering activities per year was around US$400 billion.
Despite the current political and economic problems, Indonesia
remains an attractive country for investment particularly as the
Indonesian Bank Restructuring Agency (IBRA) is offering some Rp
600 trillion (US$65 billion) worth of various banking assets for
sale at discounted rates. The agency is mandated to raise cash to
help finance the huge state budget deficit.
Last year, IBRA raised around Rp 18.9 trillion in cash from
the sale of banking assets, and this year it is targeted to raise
some Rp 27 trillion.
The government is also offering to sell state-owned companies
via initial public offering and private placement. The target is
to raise some Rp 6.5 trillion in privatization proceeds.
Yunus said that Indonesia was facing a dilemma over the money
laundering problem.
He said that there has been strong international pressure for
the country to participate in the curbing of the global money
laundering problem.
But he added that the crisis-hit country badly needed the
foreign investment.
"There has been heavy international pressure ...," he said,
adding that the country risked being isolated if it failed to
respond to the pressure.
He explained that as part of the response, the government and
Bank Indonesia had jointly drafted a law on anti-money
laundering.
He added that the draft law had been proposed to the House of
Representatives. It is not clear when the legislators would
approve the bill.
Yunus said that according to the draft law, money coming from
corruption, smuggling, banking crime, narcotics and drug
operations, terrorism, and the trading of women, children and
slaves were considered as ill-gotten money.
Yunus said that if Indonesia declined to participate in the
international effort to curb money laundering, the so-called
Financial Action Task Force of the G-7 nations might include the
country in its "hit list."
He said that the G-7 nations had vowed to cut bank dealings
with countries that declined to halt the flow of such money.
"If this happens, domestic banks will also suffer," he said.
(rei)
JAKARTA (JP): Bank Indonesia has admitted that some dirty
money from international organized crime may have entered
Indonesia in the form of legal foreign investment via a complex
money laundering process.
Yunus Husein of Bank Indonesia's directorate for legal affairs
said on Friday that the country's free foreign exchange system,
and the strong appetite for foreign investment amid a low saving-
investment gap were among factors encouraging the inflow of the
money.
"If you ask me whether there's ill-gotten money coming here,
of course there is. But it's like the wind, you know it exists
but you can't hold it," Yunus told a seminar on money laundering.
Former deputy of the national police chief Koesparmono Irsan
was also convinced that international drug cartels had targeted
Indonesia, like other developing nations, as a place to recycle
their money.
"They (drug cartels) have been enthusiastic in investing their
money in developing nations including Indonesia," said
Koesparmono, also a speaker in the seminar.
"There's a huge possibility that some of the foreign loans
(investments) entering Indonesia are directed here for money
laundering," he added.
Money laundering is the practice of converting ill-gotten
wealth, mostly obtained from drug runs, into legal investments
particularly in developing nations that lack measures to prevent
it.
According to some estimates, the volume of global money
laundering activities per year was around US$400 billion.
Despite the current political and economic problems, Indonesia
remains an attractive country for investment particularly as the
Indonesian Bank Restructuring Agency (IBRA) is offering some Rp
600 trillion (US$65 billion) worth of various banking assets for
sale at discounted rates. The agency is mandated to raise cash to
help finance the huge state budget deficit.
Last year, IBRA raised around Rp 18.9 trillion in cash from
the sale of banking assets, and this year it is targeted to raise
some Rp 27 trillion.
The government is also offering to sell state-owned companies
via initial public offering and private placement. The target is
to raise some Rp 6.5 trillion in privatization proceeds.
Yunus said that Indonesia was facing a dilemma over the money
laundering problem.
He said that there has been strong international pressure for
the country to participate in the curbing of the global money
laundering problem.
But he added that the crisis-hit country badly needed the
foreign investment.
"There has been heavy international pressure ...," he said,
adding that the country risked being isolated if it failed to
respond to the pressure.
He explained that as part of the response, the government and
Bank Indonesia had jointly drafted a law on anti-money
laundering.
He added that the draft law had been proposed to the House of
Representatives. It is not clear when the legislators would
approve the bill.
Yunus said that according to the draft law, money coming from
corruption, smuggling, banking crime, narcotics and drug
operations, terrorism, and the trading of women, children and
slaves were considered as ill-gotten money.
Yunus said that if Indonesia declined to participate in the
international effort to curb money laundering, the so-called
Financial Action Task Force of the G-7 nations might include the
country in its "hit list."
He said that the G-7 nations had vowed to cut bank dealings
with countries that declined to halt the flow of such money.
"If this happens, domestic banks will also suffer," he said.
(rei)