Money Laundering Offenses

 

Money laundering is associated with assets derived from criminal offenses, including (a) corruption, (b) bribery, (c) narcotics, (d) psychotropic substances, (e) labor smuggling, (f) migrant smuggling, (g) banking crimes, (h) capital market crimes, (i) insurance-related crimes, (j) customs offenses, (k) excise offenses, (l) human trafficking, (m) arms trafficking, (n) terrorism, (o) kidnapping, (p) theft, (q) embezzlement, (r) fraud, (s) counterfeiting of currency, (t) gambling, (u) prostitution, (v) taxation-related crimes, (w) forestry-related crimes, (x) environmental crimes, (y) marine and fisheries-related crimes, or (z) any other criminal offense punishable by imprisonment of 4 (four) years or more, whether committed within or outside the territory of Indonesia, provided that such offense constitutes a criminal act under Indonesian law.
 

The criminal sanctions for the offense of money laundering apply to the following acts:
 

1. Any person (whether an individual or a corporation) – who places, transfers, diverts, spends, pays, grants, entrusts, carries abroad, converts, exchanges into currency or securities, or otherwise deals with, assets allegedly deriving from a criminal offense, for the purpose of concealing or disguising the origin of such assets – shal be subject to imprisonment for a maximum period of 20 (twenty) years and a fine up to IDR10,000,000,000.00 (ten billion Rupiah). In the event that the convicted person’s assets are insufficient to satisfy the fine, such fine shall be substituted with imprisonment for a maximum period of 1 (one) year and 4 (four) months;
    

2. Any person (whether an individual or a corporation) – who conceals or disguises the origin, source, location, designation, transfer of rights, or actuals ownership of assets allegedly deriving from criminal offense – shall be subject to imprisonment for a maximum period of 20 (twenty) years and a fine up to IDR5,000,000,000.00 (five billion Rupiah). In the event that the convicted person’s assets are insufficient to satisfy the fine, such fine shall be substituted with imprisonment for a maximum period of 1 (one) year and 4 (four) months; and
    

3. Any person (whether an individual or a corporation) – who receives or controls the placement, transfer, payment, grant, donation, entrustment, exchange, or use of assets allegedly deriving from criminal offense – shall be subject to imprisonment for a maximum period of 5 (five) years

and a fine up to IDR1,000,000,000.00 (one billion Rupiah). In the event that the convicted person’s assets are insufficient to satisfy the fine, such fine shall be substituted with imprisonment for a maximum period of 1 (one) year and 4 (four) months.

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The aforementioned sanctions of criminal offense may be imposed on a corporation if such offenses are (a) committed or ordered by the controlling personnel of the corporation, (b) carried out in the purposes and objectives of the corporation, (c) conducted in accordance with the duties and functions of the perpetrator or the person giving the order, and (d) intended to provide benefit to the corporation.

 

The criminal sanctions applicable to a corporation include (a) a fine up to IDR100,000,000,000.00 (one hundred billion Rupiah), (b) publication of the court judgment, (c) partially or wholly suspension of the corporation’s business activities, (d) revocation of the business license, (e) dissolution and/or prohibition of the corporation, (f) forfeiture of corporate assets to the state, and/or (g) takeover of the corporation by the state. Should the corporation is unable to pay the fine, such fine payment shall be substituted by the forfeiture of corporation’s assets or its controlling personnel’s assets. If the forfeited assets are insufficient to satisfy the fine, imprisonment shall be imposed on the controlling personnel.

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Anti-Money Laundering Reporting Obligations

 

For the purpose of preventing money laundering offenses, financial service providers – namely (a) banks, (b) financing companies, (c) insurance companies and insurance brokers, (d) pension funds, (e) securities companies, (f) investments managers, (g) custodians, (h) trustees, (i) giro services, (j) foreign exchange dealers, (k) card-based payment instrument operators, (l) e-money and/or e-wallet operators, (m) cooperatives engaged in savings and loan activities, (n) pawnshops, (o) companies operating in the commodity futures trading sector, and (p) money remittance service providers – are required to submit reports to the Indonesian Financial Transaction Reports and Analysis Center (Pusat Pelaporan dan Analisis Transaksi Keuangan “PPATK”) concerning:
 

1. suspicious financial transactions, with no later than 3 (three) days after the financial service provider becomes aware of such suspicious financial transactions;
    

2. cash financial transactions in the amount of at least IDR500,000,000.00 (five hundred million Rupiah) or in a foreign currency of an equivalent value, whether conducted in a single transaction or in multiple transactions within 1 (one) business day (this requirement shall not apply to (i) transactions conducted by financial service providers with the government and the central bank, (ii) transactions for the payment of salaries or pensions, and (iii) transactions as otherwise determined by PPATK), with no later than 14 (fourteen) days from the transaction date; and/or
    

3. financial transactions involving the transfer of funds to or from overseas, with no later than 14 (fourteen) days from the transaction date.

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If the above deadlines are exceeded, administrative sanctions shall be imposed. In addition, financial service providers are authorized to postpone the aforementioned transactions for a maximum period of 5 (five) days if their service users (a) conduct transactions that are reasonably suspected to involved assets deriving from criminal offense, (b) maintain accounts for the purpose of holding assets deriving from criminal offense, or (c) are known and/or reasonably suspected of using falsified documents. The implementation of such transaction postponement must be reported to PPATK no later than 24 (twenty four) hours from the time of postponement. If the transaction postponement has lasted for 5 (five) days, the financial service provider must decide whether to proceed with or reject the transaction.

 

In addition, providers of goods and/or services – namely property companies or property agents, motor vehicle dealers, dealers in gemstones and jewelry or precious metal, dealers in works of art and antiques, or auction houses – are required to submit reports to PPATK regarding transactions conducted by their service users in Indonesian Rupiah and/or foreign currency with a value of at least or equivalent to Rp500,000,000.00 (five hundred billion Rupiah). Such reports must be submitted no later than 14 (fourteen) days from the transaction date. If this time limit is exceeded, administrative sanctions shall be imposed.

 

Financial service providers and providers of goods and/or services shall not be subject to civil or criminal liability for the performance of their reporting obligations, unless there is an element of abuse of authority.

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Protection for Reporters and Witnesses 

 

In efforts to eradicate money laundering crimes in Indonesia, reporters and witnesses play an important role because they may be the first parties to become aware of indications of money laundering offenses. Therefore, the government provides legal protection and enforcement for reporters and witnesses so that they receive protection at all stages of the examination of money laundering cases. In addition, this protection is intended to encourage public participation in acting as reporters and witnesses in money laundering crimes in Indonesia.

 

PPATK officials and employees, investigators, public prosecutors, or judges are required to keep the identity of the reporting party and the reporter confidential. A reporter is defined as any person who, in good faith and voluntarily, reports suspected money laundering. Furthermore, violation of the obligation to maintain confidentiality entitles the whistleblower or his/her heirs to claim damages through the courts. In addition to confidentiality guarantees, every person who reports a suspected money laundering crime must be given special protection by the state from possible threats to their person, life, and/or property, including their family.
 

To further safeguard the reporter’s identity, court proceedings, witnesses, prosecutors, judges, and other persons involved in the investigation of money laundering crimes are prohibited from mentioning the name or address of the reporter or any other information that could reveal the reporter's identity. Prior to the examination in every hearing before the examination begins, the judge must expressly remind witnesses, prosecutors, and other persons involved in the examination of the case of this prohibition. Likewise, every person who gives testimony in a criminal investigation into money laundering shall be given special protection by the state from possible threats to their life, limb, and/or property, including that of their family.
 

Furthermore, reporters and/or witnesses cannot be prosecuted, either civilly or criminally, for reports and/or testimony given by them.  However, witnesses who give false testimony under oath shall be punished in accordance with the provisions of the Criminal Code.

 

Cooperation in the Prevention and Eradication of Money Laundering

 

National cooperation carried out by PPATK with relevant parties is formalized with or without a formal cooperation agreement. Formal cooperation includes, among others, memoranda of understanding. The relevant parties referred to are institutions that have a direct or indirect connection with efforts to prevent and eradicate money laundering in Indonesia.

In addition to national cooperation, PPATK also conducts international cooperation with counterpart institutions in other countries as well as with international organizations involved in the prevention and eradication of money laundering. Such international cooperation may be carried out through formal arrangements or based on mutual assistance mechanisms or the principle of reciprocity.
 

As part of these cooperation efforts, PPATK may engage in the exchange of information, whether by requesting, providing, or receiving information, both domestically and internationally. This exchange of information may involve, including:

 

1. law enforcement agencies;

2. institutions authorized to supervise financial service providers;

3. institutions tasked with auditing state financial management and accountability;

4. other institutions related to the prevention and eradication of money laundering or other crimes related to money laundering; and

5. financial intelligence units of other countries.

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The exchange of information may be conducted either on PPATK’s own initiative or upon request from parties authorized to request information from PPATK. Any request for information must be submitted in writing and signed by the competent authority, including:
 

1. the presiding judge;

2. the Chief of the Indonesian National Police or the head of the regional police;

3. the Attorney General or the head of the high court;

4. the head of an agency, institution, or commission in the event that the request is submitted by an investigator other than an investigator from the Indonesian National Police;

5. the leader, director, or equivalent official, or the head of a work unit or office in an institution authorized to supervise financial service providers;

6. The head of an institution tasked with examining the management and accountability of state finances;

7. The head of another institution related to the prevention and eradication of money laundering or other crimes related to money laundering; or

8. The head of a financial intelligence unit of another country.

 

Furthermore, in order to strengthen the prevention and eradication of money laundering, mutual legal assistance in criminal matters with other countries may be carried out through bilateral or multilateral forums, in accordance with applicable laws and regulations. Such cooperation may be implemented where the relevant country has entered into a mutual legal assistance agreement with the Republic of Indonesia or based on the principle of reciprocity. To enhance coordination among relevant agencies, a National Coordination Committee for the Prevention and Eradication of Money Laundering has been established.

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PPATK officials and employees, investigators, public prosecutors, or judges are required to keep the identity of the complainant party and the complainant confidential. Violations of the provision entitle the complainant or their heirs to claim compensation through the court. Any person who reports the occurrence of an alleged money laundering crime must be given special protection by the state from the possibility of threats that endanger their self, life, and/or property, including their family. Furthermore, in court hearing, witnesses, public prosecutors, judges, and other people related to money laundering crime under examination are prohibited from mentioning the name or address of the complainant or other matters that allow the disclosure of the complainant’s identity. Any person who gives testimony in the examination of money laundering crime must be given special protection by the state from any possible threat which endangers themselves, life, and/or property, including their family. Complainants and/or witnesses may not be prosecuted, either civilly or criminally, for reports and/or testimonies given by them. Witnesses who provide false information under oath will be subject to criminal sanctions in accordance with the provisions of the criminal code.
 

Then, National cooperation conducted by PPATK with related parties shall be set forth with or without formal forms of cooperation. Relevant parties are parties who have direct or indirect links with the prevention and eradication of money laundering crime in Indonesia. Subsequently, international cooperation is conducted by PPATK with similar agencies in other countries and international agencies related to the prevention and eradication of money laundering crime.
 

In conducting the prevention and eradication of money laundering crime, PPATK may conduct
cooperation in the exchange of information in the form of requesting, granting, and receiving information with parties, both nationally and internationally, which includes:

 

1. law enforcement agencies;

2. authorized agencies to supervise financial service providers;

3. agencies in charge of examining the management and responsibilities of state finances;

4. other agencies related to the prevention and eradication of Money Laundering crime or other criminal acts related to Money Laundering crime; and

5. financial intelligence units of other countries.

 

The request, provision, and receipt of information in the exchange of may be conducted on its own initiative or at the request of any party who may request information from the PPATK. The request for information to the PPATK shall be submitted in writing and signed by:
 

1. presiding judge of the panel;

2. Head of the National Police Force of the Republic of Indonesia or the head of the regional police force;

3. the Attorney General or the head of the high prosecutor’s office;

4. the head of an institution or agency or commission, in the event that the request is submitted by an investigator other than an investigator from the National Police Force of the Republic of Indonesia;

5. head, director or official of the same level, or head of a work unit or office in an authorized agency to supervise financial service providers;

6. the head of the agency in charge of examining the management and responsibilities of state finances;

7. heads of other agencies related to the prevention and eradication of money laundering crime or other criminal acts related to money laundering; or

8. head of financial intelligence unit of another country.

 

In order to prevent and eradicate money laundering crime, mutual aid cooperation in criminal matters may be conducted with other countries through bilateral or multilateral forum in accordance with the provisions of laws and regulations. The mutual aid cooperation may be implemented if the country in question has entered into a mutual aid cooperation agreement with the Unitary State of the Republic of Indonesia or based on the principle of reciprocity. Furthermore, In order to improve the coordination between relevant agencies in the prevention and eradication of money laundering crime, the National Coordinating Committee for the Prevention and Eradication of Money Laundering Crime shall be established.[5] The establishment of the National Coordination Committee for the Prevention and Eradication of Money Laundering Crime shall be regulated under a Regulation of the President. Then, in the event that there are developments of international conventions or international recommendations in the field of prevention and eradication of Money Laundering and terrorism financing crimes, the PPATK and the relevant agencies may implement said provisions in accordance with the provisions of laws and regulations.

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