Illustration Source: di sini, JAKARTA – The Financial Transaction Reports and Analysis Center (PPATK) is working intensively with the Corruption Eradication Commission (KPK) regarding the potential for money laundering of real company owners whose businesses operate in Indonesia.

The actual beneficial owner (BO) is generally the party that actually receives interest, dividends or royalties from businesses operating in a certain area. This understanding was obtained from the Directorate General of Taxes through a circular issued in 2005.

Said Imron, an officer at PPATK’s Director of Inter-Agency Cooperation and Public Relations, said that his party is working intensively with the KPK regarding the potential for money laundering and corruption on the real company owner issues. The beneficial owner issue was also discussed at the G20 forum in 2014.

“We were asked to submit a draft related to the beneficial owner of the G20, so we coordinate with each other,” Said said after speaking at a conference on the theme of Many Voices, One Purpose: The 6th Financial Transparency Conference, Tuesday (20/10/2015).

He said the role of the KPK was very important in relation to the BO issue, especially regarding the issue of eradicating corruption. Said explained that the effort was also related to who was the real controller or owner of the assets.

Said emphasized that some parties are getting smarter to avoid linking ownership with the alleged crime, because they can use a third party.

Therefore, the PPATK requires reporting parties — such as financial institutions — to know the details of their customers with the principles of Know Your Customer (KYC), Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD).

Said also said that he asked the Ministry of Law and Human Rights to make regulations related to Public Registration, which is useful for knowing who the real company owners are.

So far, the data held by the Directorate General of General Legal Administration (AHU) of the Ministry of Law and Human Rights is only limited to data provided by a notary. “AHU only delivers information submitted by notaries. They do not have the authority to know who BO is, “said Said.

The issue of company owners actually arose in connection with the findings of Global Financial Integrity (GFI). The Washington, D.C-based organization stated that the flow of illicit funds for the 2003-2012 period had increased to US $ 991.3 billion from the previous US $ 297.41 billion. GFI stated that the illegal flow of funds usually resulted from deliberate errors in recording the balance of payments and trading via fake invoices.

Publish What You Pay (PWYP) Indonesia estimates that illegal funds from all industrial sectors in Indonesia in the last 12 years have reached IDR 2,190 trillion. PWYP estimates are based on data on the contribution of Gross Domestic Product (GDP) of all sectors, which is processed through Indonesia’s Balance of Payment and Direction of Trade Statistics belonging to the International Monetary Fund (IMF) for the period 2003-2014.

Heather Lowe, Director of Government Relations at GFI, said that her party encourages countries to make Public Registration of the real company owners. Not only that, GFI also encourages companies to have a Legal Entity Identifier (LIA), especially companies that do business internationally.

He said the LIA system can at least help identify the main parent company of a particular business, even though it is not the real company owner. Heather explained that the LIA system will be applied when companies make transactions anywhere.

LIA, said Lowe, is the first step in knowing the company hierarchy before finally obtaining data on the real company owners. It is also useful for preventing money laundering and tax evasion crimes.

“Also related to government procurement, which companies will benefit. “Through LIA, we could identify whether they came from the same parent company or not,” he said.

The Director of Perkumpulan Prakarsa, Setyo Budiantoro said that the revision of the Law on General Tax Provisions needs to be carried out in efforts to find out who the real beneficiaries are. He said that currently there are no regulations that really regulate company data with the actual company owners, who have received the results of the company’s activities.

Source: here.