I

ndonesian corruptors may have seen Hong Kong as a potential safe haven for hiding stolen state assets.

But their ventures to the island may end soon as legislators have signed a bill that will ratify a 2008 treaty that arranges for the forfeiture of the proceeds of crimes.

The House of Representatives Commission III for legal affairs endorsed late Wednesday a bill on mutual legal assistance (MLA) in criminal matters with Hong Kong’s Special Administrative Region of the People’s Republic of China.

“The ratification of the MLA will accelerate the investigation into corruption of state money involving Indonesian citizens, as well as citizens of Hong Kong,” Law and Human Rights Minister Amir Syamsuddin said.

Amir said the extradition of Indonesian fugitives from Hong Kong was excluded from the bill as Indonesia already had a 2001 law regarding the matter.

The MLA was first signed in April 2008 by then Indonesian attorney general Hendarman Supandji and Hong Kong secretary for justice Wong Yan Lung in Hong Kong.

“However, the treaty could not be put into immediate effect until Indonesia’s legislators approved a bill that would ratify it,” said Foreign Affairs Ministry spokesman Michael Tene.

The bill, slated to be passed into law during the House’s plenary session next week, will provide legal assistance including identification and confiscation of stolen state assets.

It will also enable the two countries to receive evidence, witness accounts and suspect identification in corruption cases, and will allow for a wide range of reciprocal assistance to be offered in the investigation and prosecution of criminal offenses and in the proceedings relating to criminal matters.

Indonesia, listed as one of the world’s most corrupt nations, has seen few attempts to ratify similar agreements with other countries that would help retrieve billions of dollars of state money stashed overseas by corrupt officials.

Aside from Hong Kong, corrupt Indonesian officials have hidden their ill-gotten gains in Singapore and Switzerland.

Commission III deputy chairman Aziz Syamsudin of the Golkar Party said the bill was a hallmark effort to recover billions of taxpayer dollars from overseas accounts.

He said the bill would also enable law enforcement agencies to trace and confiscate the assets of the former owners of Bank Century who fled overseas and stashed their stolen money in Hong Kong and in Europe.

The owners, Saudi Arabian national Hesham al Warraq and British citizen Rafat Ali Rizvi, stashed at least US$133 million of the bank’s asset in a Hong Kong bank, according to the National Police in April last year.

In total, the pair embezzled around Rp 12 trillion in bank assets, according to Hendarman in November 2009. Bank Century, now renamed Bank Mutiara, received a state bailout worth Rp 6.7 trillion
after it nearly collapsed in 2008.

In December 2010, the Central Jakarta District Court convicted Hesham and Rafat in absentia to 15 years in prison each for numerous counts of bank fraud that led to financial difficulties prior to the bailout.

“The passage of the bill serves as a legal boost to help retrieve assets of previous banking crimes,” said Commission III member Abdul Kadir Habsy of the Prosperous Justice Party (PKS).

He cited an example of efforts to recover stolen state assets from the late Hendra Rahardja, an Indonesian banking and business magnate, worth $800,000, in Hong Kong.

Hendra was sentenced to life in 2003 for his involvement in a corruption case worth Rp 1.95 trillion, related to the Bank Indonesia Liquidity Support (BLBI) program during the 1997/1998 Financial Crisis.