The Jakarta Post
Muhammad Yusuf, the chief of Indonesia's financial intelligence unit locally known as the Financial Transaction Report and Analysis Centre (PPATK), is understandably frustrated because law enforcement agencies have not properly followed up and acted on the work of his institution in the line with the anti-money laundering drive.
Yusuf said between 2003 ' when PPATK was set up to implement the 2002 Money Laundering Law ' and the end of last year, PPATK had submitted 2,840 reports to the National Police and Attorney General's Office (AGO) that were based on the analysis and examination of suspicious financial transactions. But only 1,250 reports or 43.3 percent had been taken seriously by the law enforcement agencies. Of these 1,250 reports, only 125 had ended up in courts as money-laundering cases tied to corruption and drug trafficking as the predicate crimes.
PPATK employees monitor suspicious transactions through banks and other financial institutions as a way of fighting money laundering. Financial institutions and other companies, such as property developers and car dealers, have been asked to report any large cash transactions (more than Rp 500 million or about US$39,277) and other financial deals that are outside the profiles of their customers to the authorities at PPATK.
PPATK analyzes and examines the reports to ascertain whether the suspicious transactions have strong evidence of money laundering. Only transactions with strong evidence of money laundering are submitted to law enforcing agencies for further investigation and prosecution.
Frustrated by the weak response from the police and AGO, PPATK has started to send reports to the Corruption Eradication Commission (KPK). But the number of money laundering cases that finally reach the court is still negligible in comparison with the number of reports that are submitted by PPATK.
PPATK recently upped the ante by asking the directorate general of taxation to follow up the PPATK reports on financial transactions by auditing the annual tax returns of the individuals or companies implicated in the transactions.
Yusuf said cross-checking the money flows to the bank accounts of those implicated in suspicious financial transactions against what they reported in their annual tax returns would be effective in discovering tax evasion and other tax crimes. The rationale is that even though the police or AGO are not able to discover any predicate crimes related to the suspicious financial transactions, PPATK reports would not simply be wasted because the reports could still lead to the discovery of tax evasion and consequently bring additional revenues to the state.
The annual tax returns filed by taxpayers shall 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 and houses. Hence, auditing the tax returns of those implicated in big suspicious financial transactions, including 45 incumbent and former governors, regents and mayors, would not only be effective in discovering tax crimes but also bringing in additional revenue to the state through tax penalties.
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