T

he revelation last week that the Attorney General'€™s Office (AGO) has been examining the bank accounts of eight incumbent and former governors and regents implicated in suspicious financial transactions worth the equivalent of tens of millions of dollars is hardly a surprise.

Last year, the Home Ministry disclosed that almost 200 regional government heads and regional councilors had been jailed and tried for corruption or summoned as witnesses in graft cases.

What we are concerned about is that the suspicious bank transactions, which were reported by the Financial Transaction Reports and Analysis Centre (PPATK), might evaporate without any due legal process as happened to the suspicious bank transactions of a dozen senior police officers in 2005.

The difference this time, which somewhat buoys our optimism, is that the reports on the suspicious transactions were filed not only with the National Police and AGO but also with the Corruption Eradication Commission (KPK), which in the public'€™s perception, still has an impeccable reputation in handling graft cases.

But again despite the KPK involvement in examining the suspicious transactions since 2012 there are still a major risk that most of them will eventually be dismissed for lack of legal evidence.

The problem is that the police, AGO and even judges at the corruption courts do not yet have a uniform perception on the enforcement of the 2002 Money Laundering Law. Several of them still assume that the predicated crimes from which the laundered money was derived should first be proven before money-laundering cases can be brought to court.

Whereas the basic principle of the Money Laundering Law, like similar laws in other countries, is that the burden of proof lies on the shoulders of the suspects or defendants. It is the owners of bank accounts involved in suspicious financial transactions who should prove, with legal evidence, that the money flowing to their accounts was legally earned.

Given this different stance we have often suggested that tax auditors move immediately to audit the tax returns of officials or businesspeople who, according to the analysis by the PPATK, are suspected of being involved in suspicious transactions.

Simply examining officials'€™ annual tax returns will not capture the whole picture about their actual income because they could understate the taxes due on their real income with fake documents.

But auditing their annual tax returns against the suspicious transactions through their bank accounts will detect whether the officials hid their assets to evade taxes or laundered ill-gotten assets. This is because annual income tax returns stipulate taxpayer data covering not only their tax payment records but also all their financial and fixed assets such as deposits at banks, bonds, investments, cars, houses etc.

It would be much easier to uncover tax evasion and money laundering through auditing the tax returns of officials implicated in suspicious transactions than proving the predicated crimes from which laundered money was derived.