TEMPO.CO, Jakarta - Financial Transaction Reports and Analysis Center (PPATK) has detected suspicious fund flows from several overseas companies to Indonesia involving several local banks.
THE transactions reported by Financial Crimes Enforcement Network (FinCEN) occurred during the period 2011-2015. The investigation carried out by International Consortium of Investigative Journalists (ICIJ) including Tempo found that Indonesian businessmen were named in some of the thousands of transactions mentioned in the documents dubbed the FinCEN files.
PPATK Chairman Dian Ediana Rae said his agency was already working with the US financial intelligence agency to follow up on the report. "We didn't have anything to hide," Dian, 60, stressed during a special interview with Tempo on September 11.
He added many cracks in the system -- from inconsistent identity data to minimal banking oversight -- enabled individuals to commit money laundering crimes. "That's why we are trying to fix the oversight mechanism. We don't want loopholes," said Dian, the successor of Kiagus Ahmad Badaruddin who passed away last March.
Speaking to Tempo reporters Mahardika Satria Hadi, Raymundus Rikang, and Nur Alfiyah, Dian explained how criminals were making use of these loopholes during the Covid-19 pandemic. The PPATK has also received reports from other countries about crimes involving Indonesian citizens. Four Indonesians have been accused of defrauding two companies from China and Italy. They diverted tens of billions of rupiah by stealing customer data and falsifying identities. During the interview that took place in PPATK's office in Central Jakarta, Dian also talked about the default by the state insurer Asuransi Jiwasraya.
Joint investigation by the ICIJ found thousands of suspicious transactions in reports by banks to the US financial intelligence unit, FinCEN during the period 2011-2015. Some of the transactions involved Indonesian businessmen. Did the PPATK manage to detect these transactions?
Yes, it is related to compromised business email accounts. Not just FinCen, but also the FBI was working with us to expedite the case. The PPATK has the authority to freeze the funds. As soon as we received information from them, we froze the transactions for 15 days while sorting out everything before we took over the case and handed over to the law enforcement agencies.
How many transactions were detected during that period?
If I remember correctly, more than 10. This is quite interesting. If people commit that kind of fraud, first, it is difficult to detect and it takes time. Second, the money involved will be huge. Export-import businesses are not small businesses.
Has the PPATK already informed the banks of the alert from US's financial intelligence unit?
It wasn't just an alert. We followed up and cooperated with FinCen. That's why many compromised business email cases in the US could be resolved. FinCen stepped in. And we didn't have anything to hide. We also informed the law enforcement authorities.
Is the PPATK capable of detecting each suspicious transaction with the existing system?
We are trying to seal all the cracks in the system. There is still room for people to engage in money-laundering crimes. For example, when normal banks are strict, scammers would go to rural banks. When rural banks are regulated, they would move to microfinancing institutions or to cooperatives. That's why we suddenly hear about saving and lending cooperatives getting themselves caught in scams involving trillions of rupiah. Therefore, we are working to fix the oversight mechanism. We don't want any loophole.
Are there still a lot of loopholes?
Quite a lot but we use risk-based principles. It means we focus on those with highest risks in order for us to make the best use of our resources.
Do the loopholes still exist because many banks still don't report irregular transactions of their important customers?
Yes, that still happens. We don't know whether they don't report intentionally, or if it's because they are scared or because they don't know that the account owners who committing crimes were state officials.
What is the PPATK doing to address this issue?
We investigate and if we find a violation like that, the fines we impose on the bank are not small. Many have been slapped with hefty fines but we may not publicize them. We can even use Article 5 of Law No. 8/2010 on prevention and eradication of money laundering crimes, if we want. It (the failure to report) constitutes a passive money-laundering crime.