Jakarta- Post issuance of President Regulation No. 13 of 2018 on Principle Application in Recognizing Beneficial Ownerships to Corporations in the Prevention and Eradication of Money Laundering Crimes (TPPU) and Terrorism Financing Crimes (TPPT), all types of corporations are required to declare and report beneficial ownership through a platform provided by the Ministry of Law and Human Rights. Furthermore, Indonesia has also placed compliance and disclosure of beneficial ownership (BO) as one of the priority actions under the National Strategy for Corruption Prevention by Presidential Regulation 54 of 2018 concerning the National Strategy for Corruption Prevention. The action plan aims to provide accurately and integrated BO data that can be accessed by the public and used for handling cases, licensing, and procuring goods and services.
Based on developments reported by the National Secretariat for Corruption Prevention Strategy, however, there is only 665,088 corporations (27.76% of the total corporations) have declared their beneficial ownership. There are many reasons why corporate compliance rates are so low. First, many companies are unfamiliar with “beneficial ownership” and have difficulty defining their beneficial owner(s). In addition to these well-meaning but uninformed companies, many companies are allegedly set up to facilitate crime, and they will avoid complying or feeling obligated to disclose beneficial ownership as long as it is deemed profitable.
In response to the beneficial ownership disclosures’ law compliance by corporations, the United Nations Office on Drugs and Crimes (UNODC), the United Nations Development Program (UNDP), Publish What You Pay (PWYP) Indonesia, Transparency International Indonesia, and the Ministry of Law and Human Rights held a Public-Private Dialogue titled Beneficial Ownership Transparency on 13 October 2022 at the Mandarin Oriental Hotel, Central Jakarta. This agenda facilitates honest communication and discussion between the government and the business world regarding beneficial ownership disclosure and management.
More than 190 participants from various backgrounds attended the event, including business stakeholders from important industries in Indonesia (extractive industries, plantations, agriculture, and health), notaries, lawyers, government representatives, and civil society organizations. This activity facilitated honest communication and discussion between the government and the business world regarding the disclosure and management of beneficial ownership and identified challenges and obstacles faced by the private sector in disclosing beneficial ownership information.
Speakers at the event discussed issues such as digitization and data sharing as tools to assist governments in using beneficial ownership information to prevent corruption and money laundering; experiences and challenges in identifying, disclosing, and managing beneficial ownership information; potential benefits for the community by having to access to beneficial ownership information, especially in monitoring government procurement of goods/services, industrial licensing, and conflicts of interest.
Representatives from the private sector highlighted the need for precise compliance requirements for Beneficial Ownership disclosure that apply to all companies and the importance of transparency in an equal system for all companies. The results of a survey conducted during the workshop indicated that the private sector expects better assistance and guidance from the government to comply with beneficial ownership disclosure regulations.