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Lawmakers launder money

Publication Date : 04-01-2013

 

If Indonesia's National Police, Attorney General's Office and Corruption Eradication Commission do not change their mindset and approach to dealing with money-laundering cases, the reports of the financial intelligence unit on large cash transactions through the bank accounts of 20 House of Representatives’ lawmakers will end up in the trash bin.

Money-laundering cases differ from other criminal cases as the indictment is virtually the verdict, due to the fact that the burden of proof lies on the suspect or defendant.

The Financial Transaction Reports and Analysis Centre (PPATK) or financial intelligence unit revealed on Wednesday it had submitted reports to the three law-enforcement agencies on cash transactions worth hundreds of billions of rupiah involving the bank accounts of 20 members of the House budget committee.

The reports were based on the analysis of 1,000 out of more than 2,000 suspicious financial transactions involving the bank accounts of House members that the financial intelligence unit had so far received from financial service companies.

The cash transactions were classified as suspicious because their amounts were huge, far exceeding the maximum sum allowed for a single cash transaction, and because the money flowing through their bank accounts did not conform to the legal earning profile of the politicians.

We are afraid the reports will eventually lead to nothing if law enforcers insist on first investigating and uncovering the background crimes from which the money was derived.

The fate of the reports could be similar to the suspicious financial transactions worth millions of dollars that passed through the bank accounts of 15 police officers that the PPATK reported to the National Police chief in 2005.

What, then, is the use of the politically independent financial intelligence unit if most of its well-researched and analysed reports on suspicious transactions are so easily dismissed by the police and other law enforcers?

We strongly believe that most of the reports on suspicious financial transactions filed by the PPATK with the law enforcement agencies are strong evidence of money laundering for several reasons.

First of all, the transactions are de facto indications of money laundering. If they were not, financial companies would not have risked upsetting or embarrassing their customers by reporting the deals to the PPATK.

Lawyers and financial experts at the PPATK, the agency in charge of enforcing the 2002 Money Laundering Law, always thoroughly analyse reports of suspicious transactions they receive from financial institutions.

Only when they are completely convinced that the transactions hold strong indications of money laundering will the PPATK submit the cases to law enforcement agencies for further investigation and eventual prosecution. The PPATK is not authorised to prosecute.

That is why not even 0.1 per cent of the thousands of suspicious transactions reported by financial companies to the PPATK annually were eventually filed as official reports to law enforcing agencies.

But the beauty of the Money Laundering Law, like similar laws in other countries, is that the burden of proof lies on the suspects or defendants, meaning that a person whose bank accounts are involved in suspicious transactions is required to prove that the money was not ill-gotten.

That is why strongly enforced money-laundering laws also are a boost to the fight against corruption and other crimes such as drug trafficking, illegal logging, smuggling and tax crimes.

Put another way, an effective anti-money-laundering campaign will make it extremely difficult for corrupters, tax evaders and other big criminals to introduce their ill-gotten money into the legal financial system.

 

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