T

he government is preparing a legal instrument that will allow closer monitoring of the funding of non-profit organizations after authorities detected that many of them were apparently receiving funds form terrorist-affiliated individuals and groups.

Financial Transaction Reports and Analysis Centre (PPATK) head Muhammad Yusuf said the government had drafted a government regulation on the issue.

“The government regulation draft has been submitted to the Law and Human Rights Ministry,” Yusuf said on Thursday, adding that the regulation could be made effective by year-end.

He stressed that tighter monitoring of non-profit organizations was vital, his agency having detected a number of cash transfers from terrorist-related individuals and groups to domestic organizations.

“The non-profit organizations work in various fields such as education, social affairs, religion and others,” Yusuf said, drawing speculation that Islamic boarding schools were among the organizations referred to.

The total amount of money transferred from terrorist-affiliated groups to domestic organizations is estimated to reach the billions of rupiah. The funds came from various countries such as Turkey, Australia and others, though Yusuf declined to elaborate further.

Of the domestic organizations that received the terrorist funds, he said, not all executive board members were aware of the situation. “The executive board members didn’t understand the profile of their donors. They thought that the organization providing the money was just an ordinary organization,” Yusuf said, adding he worried domestic organizations would be misused by foreign groups for evil ends.

“There is no law governing this — it’s difficult to know where the money comes from and where it goes,”
he added.

The new regulation will oblige domestic organizations to take several steps before receiving funding from any source, including obtaining a profile of the donor. “That way they can decide whether it is legal to accept the money. The PPATK, as the regulator, has the authority to audit and look at the source of the money and to whom it will go,” Yusuf said.

“We have at least 300,000 non-profit organizations across the archipelago, but no regulation on funding. That’s why we’re making this bill,” he said.

The new monitoring mechanism, he added, is also part of the implementation of the Nusa Dua Statement, an agreement made during the Second Counter-Terrorism Financing Summit in Nusa Dua, which ended on Thursday.

One of the points agreed by all participants from the 26 countries is improvements to the assessment of particular non-profit organizations thought likely to be connected to terrorism.

The participants also agreed to coordinate a joint regional assessment, create coordinated response options including outreach and education and identify, monitor and, where necessary, disrupt higher-risk charities and NPOs that have been compromised by terror groups.

Meanwhile, a terrorism expert from Nanyang Technological University in Singapore, Rohan Gunaratna, said that finance intelligence was a very powerful tool in the fight against terrorism. “Tracking money is very important to prevent attacks. Money is the life blood of terrorists,” Gunaratna said.

He added that terror attacks were commonly funded from overseas. Citing an example, Gunaratna said a terrorist leader had transferred money in 22 payments amounting to Rp 1.8 billion from Turkey to Indonesia. Similarly, at least Rp 70 million was sent from Turkey to fund an attack on Central Jakarta in January this year.

He added that Southeast Asia was facing a very severe threat from terrorism. “It is not only Indonesia — it is also Malaysia, Singapore, and the Philippines. It’s a regional issue, a regional problem, a regional challenge.”