September 02, 2010

http://www.thejakartaglobe.com/home/revised-money-laundering-bill-still-not-good-enough-watchdogs-warn/394124

Jakarta. Watchdogs on Wednesday said they were still not satisfied with the draft revision to the 2003 Money Laundering Law, even after lawmakers agreed to expand access to reports from the Financial Transaction Reports and Analysis Center (PPATK).

The House of Representatives Commission III last week finalized the draft for the Law on Money Laundering, which included the crucial point of granting access to the PPATK’s reports to six state institutions, including the Corruption Eradication Commission (KPK).

However, the lawmakers dropped the article that would have given PPATK the authority to conduct further probes based on its own reports on suspicious financial transactions.

Transparency International Indonesia argued that the authority of institutions such as the KPK, the National Narcotics Agency (BNN) and the tax office to work on PPATK reports would not amount to much unless the police and the attorney general first indicated potential money laundering in suspected accounts.

“Handing over the analysis reports to the police and the attorney general to probe for indications of money laundering has proven ineffective,” said Vidya Dyasanti of TII.

As of April 2010, of the 2,044 financial transactions flagged as suspicious by PPATK, 1,030 were suspected to have been linked to corruption activities, but only 26 cases have been prosecuted using the current money-laundering law, according to data gathered by TII.

Vidya said the PPATK should be given the authority to conduct its own probe so that it could determine early on whether suspicious financial transactions were cases of money laundering.

Vidya also said that allowing the PPATK to conduct its own probe was a way to deal with money-laundering cases involving police officials themselves, referring to the recent discovery of suspiciously large bank accounts owned by high-ranking police officers.

Moreover, Transparency International also criticized the lawmakers’ unwillingness to make the PPATK an independent body. PPATK is currently appointed by the president as recommended by the finance minister and the governor of Bank Indonesia.

“There is an urgency for independence in order to prevent [PPATK] from becoming a political instrument,” Vidya said.

During the Bank Century scandal, PPATK failed to push the KPK to do more in investigating the bailout because “its authority was limited since it had to report to the president,” Vidya said.

Donal Fariz, from Indonesian Corruption Watch, said that a small group of lawmakers has from the beginning tried to undermine the PPATK.

“Some lawmakers have been misleading the public by saying that giving power to the PPATK would make them a ‘superbody’, which made the general public apathetic to the idea,” he said.

Moreover, these lawmakers also made false accusations through the media saying that the PPATK requested the right to arrest and confiscate, which were not true, he added.