Nowadays, the crime pattern of money laundering has become more complex. The crime of money laundering is conducted not only in the territory of the Republic of Indonesia but at the outside of the territory of the Republic of Indonesia as well. Considering the current development of the crime of money laundering, Law Number 15 of 2002 on The Crime of Money Laundering (â€śLaw 15/2002″) jo. Law Number 25 of 2003 on Amendment of Law 15/2002 (â€śLaw 25/2003″) are no longer suitable. Therefore, to conform with the international standard measurement of prevention and eradication of the crime of Â money laundering, on October 2010, the government has issued the Law Number 8 of 2010 on Prevention and Eradication of the Crime of Money Laundering (â€śLaw 8/2010″) to substitute of Law 15/2002 and Law 25/2003.
Crime of Money Laundering
The result of criminal act is the asset obtained through the following criminal actions: corruption, bribery, narcotics, psychotropic, manpower trafficking, migrants trafficking, criminal acts in banking, criminal acts in capital market, criminal acts in insurances, criminal acts in customs and duty, human trafficking, illegal arms trading, terrorism, abduction, theft, embezzlement, fraud, currency counterfeiting, gambling, prostitution, criminal acts in taxation, criminal acts in forestry, criminal acts in environment, criminal acts in maritime and fisheries, and other criminal acts that are subjected to 4 (four) years or more imprisonment; which is such criminal acts are committed in the territory of the Republic Indonesia or outside the territory of the Republic Indonesia, and also considered as a crime acts according to Indonesian law.
Compliance supervision is the whole activities of the Supervisory Regulatory Agency (â€śSRA”) and/or the Financial Transactions Reports and Analysis Centre (â€śPPATK”) in order to ensure the compliances of the reporting party concerning the reporting obligation in accordance with the Law 8/2010, by issuing reporting regulations or guidelines, compliance auditing, supervising of the reporting obligation, and imposing sanctions.
The Reporting Party
The reporting party is any person that is obligated to report to PPATK under the Law 8/2010. There are 2 (two) types of the reporting party as set out in Article 17 of Law 8/2010. They are (i) providers of financial services, and (ii) providers of goods and/or other services, which is including the property company/agent as one of the providers of goods and/or other services. The reporting party other than as set out in Article 17 of Law 8 2010 is regulated in the Government Regulation.
The Know Your Customers Principle
The reporting party shall apply the Know Your Customers Principle (â€śPrinciple”) that set out by SRA. Service user is any person that uses the service of the reporting party. The Principle shall be applied by the reporting party when: (i) doing business with the service user, (ii) involving financial transactions in Rupiah or other currency in minimum transaction or equal to Rp 100.000.000,- (one hundred million Rupiah), (iii) there are suspicious financial transactions related to money laundering and terrorism financing crime.
The Principle, at least consists of: (i) service user identity, (ii) service user verification, and (iii) supervision of service userâ€™s transactions. Any Person who is conducting transaction with the reporting party shall provide the accurate identity and information that required by the reporting party, and at least shall consists of self identity, fund source, and the designation of the transactions by filling out the forms provided by the reporting party and attaching the supporting documents. In the event that the transactions is conducted on behalf of other person, the person who is conducting the transaction shall provide the identity, fund source, the designation of the transaction and the supporting documents of the conductor and such other party. With regards to the identity and/or the supporting documents are incomplete, the reporting party shall refuse the transaction.
The identity and the supporting documents required by the reporting party shall be in conformity with the laws and regulations issued by SRA. The reporting party must maintain all records and documents on the identity of any person who engages in the transaction for at least 5 (five) years since the end of the business relationship with the service user. The reporting party who is not performing such maintaining obligation may be sanctioned in accordance with the prevailing laws and regulations.
The financial services provider shall terminate the business relationship with the service user if: (i) the service user refuses to complies with the Principle, or (ii) the financial services provider is suspecting the validity of the information provided by the service user. The financial services provider shall report such termination to PPATK as a suspicious financial transaction.
1. The providers of financial services, as one of the reporting party shall submit the report to the PPATK of:
(i)Â Suspicious financial transactions
The report shall be submitted within 3 (three) business days after the providers of financial are aware that there is a suspicious financial transactions element.
(ii)Cash financial transactions in Rupiah or other currency in minimum amount of or equal to Rp 500.000.000,- (five hundred million Rupiah)
The report shall be submitted within 14 (fourteen) business days after the transaction date. This reporting obligation is exempted with: (i) the transaction conducted by financial services provider with government or central bank (ii) the transaction conducted for salary or retirement fund payment (iii) other transaction determined by the Head of PPATK or at the request of the financial services provider approved by PPATK.
(iii)Financial transaction of fund transfer to and from abroad
The report shall be submitted within 14 (fourteen) business days from the transaction date. The implementation of this reporting obligation must occur at the latest of 5 (five) years since the enforcement date of Law 8/2010.
The terms of the form, type, and the procedure of the report submission are further stipulated in PPATKâ€™s Head regulation.
2. As for the providers of goods and/or other services, they shall submit the report to the PPATK comprises the transaction of the service user both in Rupiah or in other currency that equal to the amount of Rp 500.000.000,- (five million hundred Rupiah) within 14 (fourteen) business days from the transaction date. The implementation of this reporting obligation must occur at the latest 2 (two) years since the enforcement date of Law 8/2010.
In the event that the reporting party does not perform the reporting obligations to PPATK as mentioned above, they shall be subjected to the administrative sanctions imposed by SRA.
Carrying Cash and Other Payment Instruments Into or Out of the Customs Region of Republic of Indonesia
Any person who is carrying cash in Rupiah and/or other currency, and/or other payment instruments carried out in check, travelerâ€™s check, payable promissory note, or gyro at least in the amount of or equal to Rp 100.000.000,- (one hundred million Rupiah) shall notify the General Directorate of Customs and Duty (â€śDirectorate”). The Directorate shall make a report of such carrying cash or other payment instruments for the PPATK with the maximum of 5 (five) business days from the notification receipt date. In the event that the person fails to notify the Directorate, he may be sanctioned to administrative sanction, which is a fine in the amount of 10% (ten percent) of the total amount of the carrying cash and/or other payment instruments, maximum of Rp 300.000.000,- (three hundred million Rupiah). The fine shall be deposited to the Stateâ€™s Treasury. The terms of procedure of carrying cash and/or other payment instruments, sanctions imposition, and the submission to the Stateâ€™s Treasury are further stipulated in Government Regulation.
PPATK is an independent institute constituted in order to prevent and eradicate the crime of money laundering. PPATK shall be responsible directly to the President. The functions of PPATK are to: (i) prevent and eradicate the crime of money laundering, (ii) manage the information and data obtained by PPATK, (iii) supervise over the compliance of the reporting party, (iv) analyze or examine the report and the information of Financial Transaction that indicates money laundering and/or other criminal act related to money laundering.
In order to perform their functions, PPATK shall be authorized to:
a. request and obtain data and information from the authorized government institution and/or private institution that has the authority to manage the data and information, including the data and information from the government institution and/or private institution that receives report of a particular profession;
b. coordinate with related institution concerning the prevention of the crime of money laundering;
c. issue a guidance on identifying the suspicious financial transaction;
d. provide recommendation to government with regards to the prevention of the crime of money laundering;
e. represent the government in organization and international forum in relation to the prevention and eradication of crime of money laundering;
f. arrange educational program and anti-money laundering training; and
g. arrange the dissemination of prevention and eradication of the crime of money laundering.
Examination and Temporary Suspension of Transaction
PPATK is the institution who has the obligation to examine the suspicious financial transaction related to the crime of money laundering. With regards to the examination, PPATK may request the financial services provider to temporary suspend all or part of the transaction. If the financial services provider accepts such request, the temporary suspension shall be recorded in the minutes of temporary suspension of transaction (â€śMinutes”). The temporary suspension of transaction shall be conducted in the maximum of 5 (five) business days and may be extended in no later than 15 (fifteen) business days after having obtained the receipt of the Minutes. In the event that PPATK finds the indication of money laundering, PPATK will submit the result of the examination to the investigator for further investigation in coordination with PPATK.
Investigation, Prosecution, and Examination before the Court
Investigation, prosecution, and examination before the court and the execution of the court decision of the criminal acts set out in the Law 8/2010 (as mentioned above), are conducted in accordance with the prevailing laws and regulations, unless regulated otherwise in the Law 8/2010. In order to carry out the investigation, prosecution, and examination of the crime of money laundering before the court, the criminal origin does not have to be proven first
Investigator, prosecutor, or the judge are authorized to order the reporting party to (i) temporary suspend the transaction and block the assets of the transaction (ii) request the reporting party to provide information in written form related to the assets of any person who has been reported by the PPATK to the investigator or the suspect, or the defendant.
The valid evidence in the verification of the crime of money laundering are (i) evidence as determined in the Law of the Criminal Proceeding; and/or (ii) other evidence in the form of information that is uttered, sent, received, or kept electronically through optical devices or similar optical devices and documents.
Protection for the Reporting Party and Witnesses
PPATKâ€™s officers, investigator, prosecutor, or judge are obligated to keep confidential of the reporting party. In the event they fail to keep confidential of the reporting party, the reporting party or his heirs is entitled to file a claim for compensation. Any person who is reporting a suspicion that the crime of money laundering may have occurred and any person who is giving testimony on the crime of money laundering, must be provided with special protection by the state against potential threats that endangering the person, his life, and/or his assess, and his family. The procedure of providing the special protection is further stipulated in laws and regulations.
1.Any person who is placing, transferring, assigning, spending, paying, donating, entrusting, carrying abroad, remodeling, exchanging into currency or obligation or other actions of assets that are known or reasonably suspected by him as the result from the criminal acts determined under Law 8/2010, in order to hiding or concealing the origins of the assets, shall be subjected, because of the crime of money laundering, to imprisonment at the maximum of 20 (twenty) years and the maximum fine of Rp 10.000.000.000,- (ten billion Rupiah).
2.Any person who is hiding or concealing the origins, source, location, designation, transfer of rights, or the actual ownership of the assets that are known or reasonably suspected by him as the result from the criminal acts determined under Law 8/2010, shall be subjected, because of the crime of money laundering, to imprisonment at the maximum of 20 (twenty) years and the maximum fine of Rp 5.000.000.000,- (five billion Rupiah).
3.Any person who is receiving or controlling the placement, transfer, payment, donation, contribution, entrustment, exchange, or using the assets that are known or reasonably suspected by him as the result from the criminal acts determined under Law 8/2010, shall be subjected, because of the crime of money laundering, to imprisonment at the maximum of 5 (five) years and the maximum fine of Rp 1.000.000.000,- (one billion Rupiah). This provision does not apply to the reporting party that has fulfilled his reporting obligation in accordance with Law 8/2010.
In the event that the person cannot afford to pay the fine sanctions, the fine sanctions will be replaced by imprisonment at the maximum of 1 (one) year and 4 (four) months.
The above provisions of sanctions also shall be imposed to any person who is residing in or outside the territory of the Republic of Indonesia that participates in attempting, assisting, or conspiring to conduct the crime of money laundering.
In the event that the crime of money laundering as stated in point 1 to 3 above are committed by corporation, the sanction shall be imposed to the corporation and/or the personnel of the corporation controller. The personnel of the corporation means any person who has the power or authority to make corporation policies or to carry out such corporation policies without the obligation to obtain the authority from his superior.
The sanctions shall be imposed to the corporation if the crime of money laundering is:
(i)conducted or ordered by the personnel of the corporation controller;
(ii)conducted in order to carry out the purpose and the objectives of the corporation;
(iii)conducted in accordance with the authority of the perpetrator or the commander;
(iv)conducted in order to provide benefits for the corporation.
The corporation shall be subject to the main sanction, that is, a fine at maximum amount of Rp 100.000.000.000,- (one hundred billion Rupiah). In addition to the main sanction, the corporation may also be subjected to the additional sanctions, such as; (i) announcement of the judgeâ€™s decision, (ii) suspension of all or part of the corporationâ€™s business, (iii) revocation of business license, (iv) corporation dissolution and/or prohibition, (v) confiscation of the corporationâ€™s assets by state, and/or (vi) takeover of the corporate by state.
In the event that the corporation cannot afford to pay the main sanctions, the main sanctions will be replaced by the confiscation of the corporationâ€™s assets or the personnel of the corporation controller, in the same amount of the fine sanction that imposed on the corporation. In the event that after the sales of the corporationâ€™s assets still do not cover the amount of fine sanction, the fine sanction will be replaced by imprisonment of the personnel of the corporation controller with taking into account the fine that was already paid.