While officials lauded Indonesia for securing a mutual legal agreement (MLA) with Switzerland, Indonesian tax evaders and criminals with assets parked in Swiss banks can continue to rest easy as the treaty would only come into force when it is ratified by the legislative bodies of both countries.

The Foreign Ministry is preparing the draft for the ratification bill, which was signed by Law and Human Rights Minister Yasonna Laoly and Swiss Justice Minister Karin Keller-Sutter in Bern on Monday.

However, a similar agreement with the United Arab Emirates (UAE), which was signed in 2014, is still in the pipeline.

Damos Dumoli Agusman, the Foreign Ministry’s director general for law and international treaties, said the ratification bill of the MLA with the UAE had just been completed and would be tabled at a House of Representatives plenary session for approval soon.

“The ratification of the MLA with Switzerland will be conducted in accordance with the procedures we have; it will not be different from any other agreement. The government will prepare the necessary documents in the form of the ratification bill,” he told The Jakarta Post via text message on Wednesday.

Hanafi Rais, deputy chairman of House Commission I overseeing intelligence, defense and foreign affairs, said the ratification of the MLA would very much depend on when the government submitted the ratification bill to the House.

Meanwhile, Commission I member Dave Akbarshah Fikarno Laksono said the ratification was supposed to be simple as the role of the House was to accept or decline the government’s proposal.

“Sometimes when it drags on for a while, it’s just because the government hasn’t submitted the proposal,” he said.

While the House has to discuss the bill, he did not rule out the possibility that the MLA with Switzerland could be ratified before the election.

“But it all depends on whether the government is willing to reach out to the House leadership to speed up the process,” he said.

Even though it would only be effective once approved, the agreement itself was hailed as a remarkable achievement for Indonesia to close a deal with Switzerland, a country traditionally known as a tax haven.

Based on the tax amnesty in 2016, Switzerland was one of the five main countries where wealthy Indonesians kept their money.

“But it all depends on whether the government is willing to reach out to the House leadership to speed up the process.”

Dave Akbarshah Fikarno Laksono

______________________

During the tax amnesty, Rp 4.8 quadrillion (US$345.24 billion) was declared by wealthy Indonesians, Rp 3.8 quadrillion of which was kept in Indonesia while Rp 1 quadrillion was kept in other countries.

However, according to the Tax Justice Network, at least $331 billion is parked overseas, much more than the Rp 145 trillion that was repatriated.

Center for Indonesia Taxation Analysis executive director Yustinus Prastowo said the agreement was important for allowing the two countries to enforce the law on corruption, money laundering and tax evasion.

“The MLA opens up the possibility for Indonesia to seek help in tracking wealth, determining the amount and repatriating it,” he said as quoted by kompas.com.

Financial Transaction Reports and Analysis Center deputy chairman Dian Ediana Rae said the agency was very much involved in the four-year negotiation for the agreement.

“With this agreement, it will certainly make it easier to track, freeze, confiscate and seize assets resulting from crimes such as corruption. This kind of agreement will certainly help to handle money from proceeds of crime and money laundering,” he said.

Transparency International Indonesia secretary-general Dadang Trisasongko expressed appreciation for the agreement, calling it strategic for the fight against corruption. He, however, warned that such an agreement could only work if law enforcement in Indonesia was in full gear.

“The important issue is to ensure that law enforcers can investigate cases in which the evidence is outside the country,” Dadang said.

Corruption Eradication Commission spokesman Febri Diansyah echoed Dadang’s concern, saying that in addition to international agreements, the capacity of law enforcers was also very important.

“This is because in the identification process from investigation to prosecution, it is very important [for law enforcers] to be able to find the evidence or results of crimes that are located abroad,” he said.

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