The Jakarta Post, Jakarta | Tue, 07/20/2010 8:44 AM |

The country’s leading financial watchdog is conceding to legislators’ rejection of its proposal to investigate suspicious transactions, settling for the authority’s pledge to allow the body to “examine” such  transactions in a bill reviewing the money laundering law.

The director for laws and regulations at the Financial Transaction Reports and Analysis Centre (PPATK), Muhammad Yusuf, said he  was  optimistic a new money laundering law will be endorsed next month but said it would not likely grant the financial intelligence unit with the authority to further investigate as earlier hoped.

Yusuf said Monday that the right to investigate is among three main contentious issues in the deliberation on the bill on the revision of the 2003 Money Laundering Law.

The other two issues are who should be authorized to conduct investigations and the body’s capacity for international cooperation.

“We’ve proposed that the PPATK is given the authority to carry preliminary investigations, but the legislature disagrees despite our argument that it will not mean we will surpass authority of [law enforcement officials],” Yusuf said.

“They think it will overlap with the Criminal Code [KUHP],” he said, although the center has only pushed for a preliminary investigation. Given the resistance at the House, “we will probably only agree on using the term ‘examination’.”

Yusuf said the examination authority would allow the PPATK to request clarifications on suspicious transactions from involved parties.

However they would only be able to seek clarification through, for instance, correspondence, as without investigation authority the PPATK cannot summon any party for clarification. 

So far, the organization can only trace suspicious transactions based on reports from financial service providers such as banks, securities firms, insurance firms and money changers.

Scores of legislators have been named in graft cases investigated by the Corruption Eradication Commission (KPK), leading to suspicions that House members themselves seek to curb authorities’ means to investigate suspicious accounts.

Yusuf added the government also hoped the House would agree on granting the authority to probe money laundering cases to the KPK rather than the police and the Attorney General’s Office. “This multi- investigators policy is crucial because the police have failed to follow up many of our reports,” he said.

The spotlight is now on the National Police headquarters, which has for years ignored the PPATK’s reports of suspicious accounts belonging to senior police officers.

In 2006 the government submitted to the House a draft bill to revise the 2003 Money Laundering Law.

Yusuf said other issues the government and the House had agreed on included other types of financial service providers who would be obliged to report suspicious transactions to the PPATK or transactions worth at least Rp 500 million (US$55,500). They will include “car dealers, antique goods traders and real estate firms,” Yusuf said.

The government and the House have also agreed on the PPATK’s authority to temporarily freeze financial accounts of suspected parties.

The PPATK has been recently accused of trying to become a “super body”. A member of the House’s working committee on the bill, Bambang Soesatyo of the Golkar Party, reportedly said the House objected proposals to grant the PPATK powers to conduct further investigations, use wiretaps, detain suspects and receive incentives equal to 25 percent of the value of state money it manages to save.

“The accusation is misleading and totally incorrect,” Yusuf said.