Synopsis of the Anti-Money Laundering Bill

Synopsis of the Anti-Money Laundering Bill

JAKARTA (JP): The government has presented the much-awaited
money laundering bill to the House of Representatives for
deliberation in a move to combat money laundering practices. The
following is a synopsis of the bill, that consists of 10 chapters
and 52 articles.

Background to the drafting of the bill on money laundering:

* An increasing number of crimes produce and involve a huge
amount of funds, both inside the country and across its borders.

* The sources of funds collected from criminal activities are
concealed or disguised through various means, known as money
laundering.

* Money laundering must be prevented and eradicated so that
the frequency of crimes that produce huge amounts of funds could
be minimized so that national economic stability and security
could be maintained.

* Indonesia, as part of the international community, strives
to prevent and eradicate money laundering based on inter-
governmental agreements.

Money laundering is the laundering of money generated from
corruption, bribery, smuggling, banking-related crimes,
narcotics-related crimes, psychotropic substances-related crimes,
human trafficking, gambling and terrorism.

Money launderers are:

* Anyone who intentionally conceals or disguises the origin of
funds or money derived from criminal activities either under his
or her own name or other parties by placing the funds in
financial institutions, transferring it from one financial
institution to another, disbursing, giving or donating and
entrusting the funds to another party, carrying the money out of
the country or exchanging the money with other foreign currencies
or securities.

* Anyone who receives and owns the funds, donations,
assistance, loans or other kinds of funds clearly or allegedly
derived from criminal activities.

* Anyone who helps or cooperates in money laundering.

* Anyone outside Indonesian territory who provides help,
opportunities, facilities or information to facilitate money
laundering.

Those who are convicted of committing money laundering crimes
will be subject to a minimum jail sentence of five years and a
maximum of 15 years and fines of between Rp 5 billion and Rp 15
billion.

* Anyone who deliberately divides a cash transaction into
smaller transactions to avoid the obligation of reporting the
transaction, will be subject to a minimum jail sentence of three
years and a maximum of 10 years and fines of between Rp 3 billion
and Rp 10 billion.

* In the case where the crimes are committed by or under the
name of a corporation, the charges, sentences and fines would be
made against the corporation and or the management.

Crimes that are related to money laundering:

* Financial institutions that fail to report suspicious
transactions or transactions with a value of Rp 100 million and
above will be subject to fines of between Rp 250 million and Rp 1
billion.

* Witnesses, prosecutors, judges or other people associated
with a money laundering case under investigation who breach the
regulation that prohibits revealing the identity of those who
report the money laundering case will be subject to a jail
sentence of three years and a fine of Rp 150 million.

The Commission to Combat Money Laundering (KPTPPU)

* KPTPPU has been established to prevent and eradicate money
laundering crimes. KPTPPU is an independent institution and is
accountable to the House of Representatives.

* In carrying out its duties, KPTPPU is free from government
intervention or the intervention of any other party. In carrying
out his or her duties, the KPTPPU chairman is obliged to reject
any intervention from any party.

* KPTPPU is located in the capital of the Republic of
Indonesia and can have offshore representative offices.

* To help in the performance of its duties, KPTPPU is assisted
by the Secretariat and the Center for the Reporting and Analysis
of Financial Transactions (PPATK).

The duties of KPTPPU are:

* To seek facts and evidence related to money laundering;

* To cooperate with the police, the Attorney General's Office
and other parties;

* To evaluate reports of suspicious financial transactions to
detect early evidence of money laundering;

* To give suggestions and advise to the government regarding
policy to prevent and curb money laundering;

* To produce guidelines and publications related to efforts
to prevent and eradicate money laundering;

* To report its work to the House of Representatives, with a
copy sent to Bank Indonesia, at least once every six months.

The jurisdiction of the KPTPPU encompasses:

* Receiving reports of suspicious financial transactions from
financial institutions and other parties that conduct the
transactions;

* Conducting investigations into financial institutions and
other parties that conduct transactions, by reviewing records,
copying whole reports or records and questioning their personnel;

* Making guidelines, regulations and criteria about suspicious
financial transactions. Compiling statistical data and
disseminating information to financial institutions or other
parties;

* Conducting other legal measures for the purpose of
investigations;

* Filing recommendations with Bank Indonesia to impose
administrative sanctions against banks, to the minister of
finance to give administrative sanctions against nonbank
financial institutions, and related authorities to give
administrative sanctions against other companies.

Administrative sanctions cover written warnings; fines,
temporarily freezing of a company's operations and revocation of
licenses.

The Organizational Structure of KPTPPU

* The structure of KPTPPU consists of one chairperson, at
least 2 deputy chairpersons and 11 members.

* The chairperson and deputy chairperson are appointed by the
President after approval by the House of Representatives.

* The term of KPTPPU members is five years and they may be
appointed again for another term.

Reporting

* Financial institutions are obliged to report to KPTPPU
whenever they receive cash of Rp 100 million or more, foreign
currencies worth Rp 100 million or receive payment, deposits or
transfers of funds clearly or allegedly derived from criminal
acts. They must report those transactions within 14 working days
from the date of the transaction.

* The Directorate General of Customs and Excise is required to
give monthly reports to KPTPPU providing details about people who
bring in or out of the country cash of Rp 100 million and above.

Investigation, Prosecution and Trial

* Investigation, trial and prosecution against money
laundering crimes will be conducted in accordance with the
current criminal proceedings act, unless clearly stated otherwise
in the bill.

* KPTPPU is the only institution that has the jurisdiction to
investigate money laundering crimes.

* For the purposes of investigation, prosecution and trial, a
suspect or defendant can prove that his or her money is not
derived from criminal activities.

* During a trial, if a suspect or defendant fails to appear
before the court after three summons without valid reasons, the
trial can proceed without the presence of the defendant.

Premium for those who file reports

A premium is offered to anyone or any corporation that files a
report to KPTPPU about suspected money laundering, when after all
legal processes it is proven to be correct.

Protection for those who file reports

Anyone that files a report or testifies about suspected money
laundering crimes must receive protection from possible threats
that could endanger his or her life and the lives of his or her
family.

International cooperation

For the purpose of investigation, prosecution and trial,
bilateral or multilateral cooperation may be established with
other countries in accordance with prevailing regulations.