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Eyeing offshore assets, Jokowi picks new PPATK chief

New men: Kiagus Ahmad Badaruddin (center) and Dian Ediana Rae (right) are sworn-in in front of President Joko “Jokowi” Widodo during their inauguration as new chairman and deputy chairman, respectively, of the Financial Transaction Reports and Analysis Centre (PPATK) at the State Palace in Jakarta on Wednesday

Ina Parlina (The Jakarta Post)
Jakarta
Thu, October 27, 2016

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Eyeing offshore assets, Jokowi picks new PPATK chief

P

resident Joko “Jokowi” Widodo, who has been on a relentless mission to rally funds for the state budget through the tax amnesty, has a new engine to monitor offshore funds and assets.

Jokowi inaugurated on Wednesday Kiagus Ahmad Badaruddin, known for his stellar career in legal affairs and oversight at the Finance Ministry, as the new Financial Transaction Reports and Analysis Centre (PPATK) chairman, in the hope that he can help bring back funds or prevent them from flowing to other countries.

Returning Indonesians’ funds parked in various forms of assets abroad has become the focus of Jokowi’s tax amnesty campaign, which aims to increase revenues from taxpayers’ undeclared assets.

While the campaign has recorded success at home, the amount of repatriated funds remains low, standing at Rp 143 trillion last week, less than 15 percent of the Rp 1 quadrillion targeted.

Kiagus is known as a close aide of Finance Minister Sri Mulyani Indrawati, back from when she served the post in president Susilo Bambang Yudhoyono’s Cabinet.

Alongside Kiagus, Jokowi appointed Dian Ediana Rae, previously stationed at Bank Indonesia (BI), as deputy chairman.

“We need such figures,” Jokowi told reporters after the inauguration ceremony at the State Palace, praising both as “professionals with integrity, experience and good track records”.

He said he wanted the two to improve PPATK capability in monitoring, analyzing and evaluating suspicious financial transactions.

“So the PPATK can be a reliable institution that carries out its tasks well, whether in terms of prevention or eradication of money laundering and other crimes like terrorism financing, drugs and tax crimes,” Jokowi said, adding that he also wanted to see better cooperation between the PPATK and related institutions such as the Finance Ministry, Financial Services Authority (OJK), as well as law enforcement agencies.

Kiagus has a different background from his predecessor, Muhammad Yusuf, who spent 20 years as a prosecutor before joining the PPATK as head of its legal and regulation division in 2008, before being appointed chairman of the PPATK.

He started his career at the Finance Ministry in 1977 and held various positions, including the ministry’s director of treasury in which he oversaw budget implementation. His oversaw internal monitoring at the Finance Ministry as its inspector general before he was appointed to lead the PPATK.

Kiagus was also assigned at the Corruption Eradication Commission (KPK) to lead its planning and finance division.

Banks and other financial institutions are required to report irregular fund flows to the PPATK to scrutinize any suspicious behavior in the financial system. Should the PPATK spot further suspicious conduct in its analysis, the institution is obliged to pass the information on to relevant law enforcement agencies for them to launch an investigation.

Kiagus pledges the two will do their best to create a more independent and credible PPATK that is able to promote better cooperation between all stakeholders, particularly in supporting Jokowi’s tax amnesty campaign by “working together with the tax office” to hunt for tax evaders.

The PPATK has played a part in country’s war on drugs, terrorism and corruption. It helped the National Narcotics Agency’s (BNN) investigation into a Rp 2.7 trillion drug trafficking case.

The PPATK also discovered a huge amount of money flowing into Indonesia from at least 10 other countries suspected to be used to fund terrorism. It had also been distributed for charity and social activities.

Yusuf said, among the main challenges for the two new leaders was introducing a regulation to monitor non-profit organizations and NGOs.

“Because it is difficult to trace the flow of funds of such non-formal organizations; without proper anticipation, [such money] can be misused,” said Yusuf who will return to the Attorney General’s Office (AGO) as a lecturer in its training and education division.

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