SETTING CASH THRESHOLD

Posted by AsiaViews | Apr 23, 2018 | 0 |

INDONESIA

The Jakarta Post-Apr 20

The sum of Rp100 million (US$7,300) or its equivalent in foreign currencies set as the maximum cash transaction threshold in the bill on cash transactions seems appropriate for such a vast archipelagic country as Indonesia, even though the Corruption Eradication Commission (KPK) recommended a much smaller threshold of Rp25 million, in view of the advances in electronic payments.

Indeed, with the growth of debit cards, electronic transfers and mobile payments, the need for big cash payments should have declined significantly as long as the transactions are legal. Big cash transactions are the dominant payment mechanism only for drug dealers, corrupt officials, money launderers, tax evaders and other criminals. Cash facilitates crime because it is anonymous, and big bills are especially problematic because they are so easy to carry and conceal.

But to prevent the cash threshold from becoming a contentious issue that could protract the upcoming deliberation of the bill, a Rp100 million cash threshold could be appropriate. We urgently need a law on cash transactions because money laundering and corruption are still massive problems in the country. Just look at the huge number of United States and Singapore dollar, or Rp100,000, bills often seized by the KPK from corruption suspects during raids.

Moreover, the cash transactions bill will complement the 2010 Money-Laundering Law, which has required finance companies and sellers of high-value goods such as jewelry or property to adhere to the “know-your-customer” code in transactions of Rp 100 million or more. The law even requires cash transactions worth Rp500 million or more to be reported to the Financial Transactions Report and Analysis Centre (PPATK).

Bank Indonesia also requires non-bank payment system operators to implement prevention measures against money laundering through comprehensive customer due diligence (CDD) and to report any suspicious transactions to the PPATK and to freeze suspicious accounts. The central bank has also tightened the eligibility requirements for owners and directors of money changers and money remittance service providers

One of the main problems is the weakness in implementing the necessary safeguards and control mechanisms relating to CDD requirements.

Because of the absence of durable relationships with customers and the nature of transactions, money remitters and currency-exchange offices often find it particularly challenging to perform ongoing monitoring with a view to detecting anomalies and risk profiles.

The cash threshold will stimulate sectors providing high-value goods and services to ensure the ready availability of non-cash payment mechanisms such as electronic payment systems, where they can be recorded and tracked.

Hence, a law on cash transactions and its cash threshold will have an impact on combating financial crime: either by stopping such transactions, or by enabling law enforcement to access records that trace the origin and beneficiary of funds.

(first published in The Jakarta Post – http://www.thejakartapost.com/academia/2018/04/20/editorial-setting-cash-threshold.html)

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EXTRICATING NDONESIAN CHILDREN FROM ISIS INFLUENCE ABROAD

Indonesia urgently needs to revisit the possibility of repatriating the neediest of its young citizens stranded abroad, whose families had earlier joined ISIS. Most of these children are in camps in northern Syria but there are also small numbers in the Philippines, Afghanistan and Iraq. “Extricating Indonesian Children from ISIS Influence Abroad”, the latest report from the Institute for Policy Analysis of Conflict (IPAC) argues that the government could begin by bringing back small groups of unaccompanied children under ten years of age, who pose minimal security risk and are most vulnerable to deteriorating conditions in the camps.“The problem is that health and security conditions are worsening by the day in the Syrian camps, and the children are growing older,” says Dyah Kartika, IPAC analyst. “They need access to schools, a nurturing environment, and medical attention. If the government waits too long, the children will be further exposed to ISIS ideology.” The new report examines a 2019 list of Indonesians in camps and prisons run by the Kurdish Syrian Democratic Forces (SDF). The Indonesian government has been trying to verify their citizenship, but with pseudonyms, misspellings and bad transliterations, it is a daunting task. At the time the data was collected, between March and June 2019, there were 555 Indonesians in SDF camps and prisons, including 367 children. Among the children, approximately 277 were under the age of ten and 34 were unaccompanied. In June 2021, there are fewer than ten children who are both unaccompanied and under the age of ten that could be prioritized for return. Bringing back children of ISIS families is no easy task. The report analyses the main challenges faced by the Indonesian government. These include definitional issues, bureaucratic competition, the difficulty of verifying nationality, evaluating the toll of exposure to conflict, assessing security risk, and finding relatives or others willing to provide care once the children are returned. In addition, COVID has meant stringent restrictions on travel, placing further obstacles in the way of repatriation. There are several models for rehabilitation of children exposed to violent extremism in Indonesia that could be modified to accommodate the needs of children repatriated from abroad. The report examines these models and argues that the government does not need to have every detail of rehabilitation programs in place before it starts extricating children from ISIS influence. It can start by bringing back the most vulnerable children and then modify programs as needed.

“It’s important that the government see these children as victims” says Dyah. “They deserve a chance to be children again.”

SETTING CASH THRESHOLD