Anissa S. Febrina,Jakarta – Overlapping audits and unclear jurisdiction, not to mention the financial services industry's code of secrecy, are the main reasons for low compliance of securities companies in reporting suspicious transactions, an association says.
Association of Indonesian Securities Companies (APEI) chairwoman Lily Widjaja said in Jakarta on Wednesday that only four of the association's 150 members reported suspicious transactions since rules against money laundering took effect last January.
"Our members are not well informed about matters concerning compliance audit jurisdiction," Lily said after a workshop on enhancing the participation of the capital markets in combating money laundering.
Securities companies, she added, only acknowledged that they came under the jurisdiction of the Capital Market Supervisory Agency (Bapepam). "Some companies honestly do not know whether it is legal or not to hand over financial information to the Financial Transaction Reports Analysis Center (PPATK)." In order to intensify the campaign against money laundering, the government plans to expand the powers of the watchdog, the PPATK.
It will be given the power to seek reports from non-bank financial institutions, including securities companies. Bapepam has required securities firms to report suspicious transactions since January last year.
"Bapepam and the PPATK need to work more closely together in auditing securities companies and ensuring the upholding of the code of secrecy in respect of every report," Lily said.
In reality, she added, although the confidentiality of such reports was guaranteed by law, there were cases in which sensitive information had been leaked to the public.
This made companies even more reluctant to submit reports on suspicious transactions, she said.
Bapepam legal bureau head Robinson Simbolon explained that in the future there would be much stricter enforcement of the code of secrecy.
He added that his bureau and the PPATK would collaborate in auditing securities firms. "We have signed an MoU with the PPATK to avoid overlapping audits in the future." Bapepam director Darmin Nasution said that strict sanctions would be imposed on companies failing to report suspicious transactions.
Currently, financial services providers face fines of between Rp 250 million (about US$26,250) and Rp 1 billion for not reporting such transactions.
"The number of reports has increased from only four last year to 18 this month alone," he said, adding that this figure was still far less than hoped for.
Money laundering continues to be a major problem with Indonesia still being monitored by global anti money-laundering watchdog, the Financial Action Task Force (FATF), although it was removed from the list of Non-Cooperative Countries and Territories (NCCT) last February.
The FATF is set to review Indonesia's situation at a plenary session in Cape Town, South Africa, in mid-February to decide whether the country can be removed from the list of countries being monitored.