Bali: A 'Heaven' for Money Laundering?

(7/18/2009)

Both BisnisBali and the Bali Post carry articles suggesting Bali has earned the dubious distinction of becoming a "heaven" for money launderers.

The Head of the Bali branch of Bank Indonesia, Drs. Viraguna Bagoes Oka, speaking at a meeting on money laundering, said, "the potential (for money laundering) is very high in Bali, especially in light of the high level of investment activity."

The Bank Indonesia official blamed imperfections in current "anti-money laundering" regulations for fostering these activities in the banking, hotel, foreign exchange and property sectors. "Transactions in the property sector are both numerous and large, with participants coming from various places," he explained.

Viraguna called on his colleagues in the banking sector to act firmly in supervising and preventing money laundering in Bali.

He also bemoaned the effects of money laundering on Indonesia's economy, society and law. "I call on banks to obtain detailed information on those making sizeable transactions," he said.

When asked about the modus operandi for money laundering in Bali, Viraguna said tracking such activities is difficult. Such illegal transactions are often broken down into smaller amounts, using a wide number of brokers and nominees. To counteract these problems he called for clear personal identification, ensuring people do not employ two different sets of identity papers.

Separately, the Vice-Chairman of the Law and Enforcement for the Center the Analysis of Financial Transactions (PPATK), Bambang Permantoro, highlighted property transactions as being ripe with opportunity for money laundering activities. To date, PPATK has referred over 700 cases of money laundering to the police for prosecution.

Bambang told the press that while new technology has widened the opportunities for money laundering, that same technology has also opened new avenues for law enforcement officials to track such activities.