(Un) lawful Wealth
The government needs to consider stipulations on illicit enrichment in the future. The criminalization of illicit enrichment and the ratification of the asset confiscation bill can be the key to solving the problems.
"The world has enough for everyone's needs, but not everyone's greed". This sentence from Mahatma Gandhi is highly relevant to address the issues that are occurring in the Finance Ministry today.
Who would have thought that an act of violent abuse committed by an official's son would lead to the disclosure of suspicious wealth of a civil apparatus at the Directorate General of Taxes (DGT) of the Finance Ministry?
Bank accounts have been confiscated and it is suspected that there was Rp 500 billion (US$32.51 million) in funds. Funds that would be very beneficial if used in the public interest. This situation is basically due to Indonesia's very weak corruption law, both in terms of regulations and in the context of law enforcement.
The criminal act of money laundering (TPPU) regulations then are the key in investigating this case. Actually, the country’s TPPU system that can detect these various allegations early. One of the objectives of the TPPU system is to detect financial transaction flows. Therefore, if there is a financial transaction that is strongly suspected of involving a criminal act, this can be reported and further analyzed.
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Law No. 8/2010 concerning TPPU regulates the establishment of a Financial Transaction Reports and Analysis Center (PPATK) whose job is to receive reports, analyze them and forward them to the authorities. The obligation to report is borne by various parties, including financial services, such as banks, capital markets and financial institutions. Each reporting party is required to report suspicious transactions to the PPATK, transactions above Rp 500 million and transactions abroad.
One form of suspicious transaction is a transaction that is outside the profile, characteristics or habits of the service user. In this context, the financial services are required to strictly apply the know your customer principle, thus limiting the confidentiality principle of financial services.
Therefore, the financial services must know the profile of a DGT employee and inquire about the source of deposited funds if they exceed the proper profile. Article 25 Paragraph 4 of the Money Laundering Law provides for administrative sanctions to reporting parties who do not submit reports. Has the PPATK ever imposed administrative sanctions on dozens of DGT employee accounts whose sources of funds have been suspected?
One form of suspicious transaction is a transaction that is outside the profile, characteristics or habits of the service user.
The TPPU indicator failed to prevent the amount of suspicious funds from the Finance Ministry employees. In fact, Coordinating Political, Legal and Security Affairs Minister Mahfud MD has stated that there were suspicious funds of Rp 300 trillion. How many financial services are involved in managing these funds and whether they will be subject to administrative penalties is another question.
The next discussion is whether it is possible to prosecute for the possession of these assets using the TPPU Law without knowing the predicate crime?
Article 69 of the TPPU Law stipulates that evidence of money laundering offenses does not need to prove the predicate crime. Money laundering crime is essentially a subsidiary crime, namely a follow-up crime that requires a larger crime, commonly called a predicate crime. In fact, each of the main articles on TPPU in Articles 3-5 of the TPPU Law has an element of "predicate crime", so the question is, how can TPPU be proven without a predicate crime?
In this context, Article 69 of the TPPU Law has been reviewed by the Constitutional Court several times. In the Constitutional Court Ruling No. 77/PUU-XII/2014 it was stated that Article 69 of the Money Laundering Law actually resembles Article 480 of the Criminal Code regarding penadahan (the crime act of collecting illegal objects), where the crime stands alone without the need to prove a predicate crime.
Then, in the Constitutional Court Ruling No. 90/PUU-XIII/2015 it is was considered not necessary to prove a predicate crime, but the predicate crime still had to exist and be proven. In this ruling, it is recommended to use Article 75 of the TPPU Law that regulates the merger of predicate criminal cases and money laundering. This was also reinforced by the Constitutional Court Ruling No. 35/PUU-XV/2017.
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Each of the court’s rulings emphasizes that Article 69 of the TPPU Law is constitutional, but proving the predicate crime is important. Thus, the PPATK's task now is to provide the results of the analysis to law enforcers to then analyze the sources of said wealth.
The indictment of money laundering without predicate crime as stipulated in Article 69 of the TPPU Law is possible, but has the potential to cause legal complications and does not resolve the predicate crime problem. This can be seen in the driving license (SIM) simulator corruption case. In the indictment at the Corruption Court, the case of which had been decided with a ruling No. 20/PID.SUS/TPK/2013/PN.JKT.PST dated September 3 2013, the defendant was charged with three counts, namely the charge of corruption in the driving license simulator, which was procured in 2011, the money laundering indictment for the proceeds of corruption, bribery in the driving license simulator case and money laundering indictment for the defendant's assets from 2003 to 2010.
In the first and second indictments, there were no legal problems because it was clear that the TPPU and its predicate crime were clear. However, in the third indictment, there was no predicate crime being charged.
The PPATK's task now is to provide the results of the analysis to law enforcers to then analyze the sources of said wealth.
During the verification process, it was only stated that it was an alleged criminal act of corruption, but it was not explained what corruption was or how. During the trial at the district court, the panel of judges assessed that the assets acquired from 2003 to 21 October 2010 amounted to Rp 54.63 billion and $60,000 where the assets did not match the official income from the National Police during the same period of Rp. 407.14 million and other income Rp1.2 billion. Thus, it is considered illegitimate property.
Therefore, a reverse proof is performed. At that time, the defendant called witnesses and explained the source of his wealth. However, because the defendant was unable to explain the source of the assets, at the district court trial it was stated that the TPPU indictment had been fulfilled. This was reinforced by the decision of appeal on the Jakarta High Court Ruling No. 36/PID/TPK/2013/PT.DKI and the Cassation Ruling through the Supreme Court ruling No. 537/K.Pid.Sus/2014.
However, the problem reemerged in the review process (PK). In the final ruling in Supreme Court Ruling No. 97 PK/Pid.Sus/2021, the third indictment of TPPU was declared flawed because it did not have a predicate crime so that the Corruption Eradication Commission (KPK) even had to return the confiscated assets based on the third indictment.
This means that the indictment of money laundering without predicate crimes will still cause problems in Indonesia. One of the factors causing the various problems above is the absence of regulation regarding illicit enrichment or unexplained wealth in Indonesia's corruption institutions.
Basically, the United Nations Convention Against Corruption (UNCAC), just like Indonesia with Law No. 7/2006, has regulated illicit enrichment as one of the important articles that can be criminalized. Article 20 of the UNCAC regulates the criminalization of public officials’ growing wealth particularly when they cannot explain it.
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Jeffrey Boles defines illicit enrichment or illegal wealth as the addition of wealth of a public official whose source cannot be explained.
The purpose of illicit enrichment criminalization is to prevent the corrupt behavior of state officials. Various regional conventions have regulated this, such as the Inter-American Convention Against Corruption (IACAC), the African Union Convention on Preventing and Combating Corruption (AUCPCC) and the Economic Community of West African States (ECOWAS) Protocol on the Fight Against Corruption.
One of the controversies of illicit enrichment criminalization is the arrangement of the reverse burden of proof as stipulated in TPPU and corruption. This principle is considered to be violating the principle of the presumption of innocence and human rights so that the criminalization of illicit enrichment is still hampered.
For example in Indonesia, in the the 2018 and early 2019 versions of the draft Criminal Code (RKUHP), there were proposals for stipulations on illicit enrichment. Article 693 of the 2018 RKUHP reads "Any civil servant or state administrator who illegally enriches themselves, with an increase in their wealth that cannot be explained reasonably in relation to their legitimate income, shall be punished...” However, this provision no longer exists in the September 2019 RKUHP.
With the current phenomenal cases, the government needs to consider stipulations on illicit enrichment in the future.
In addition, the (immediate) enactment of the asset confiscation bill can also be a solution. Article 3 Paragraph (1) of the asset confiscation bill provides legitimacy to confiscate and seize assets that are disproportionate to the subject’s income and cannot be explained. This process can even be carried out without going through criminal proceedings (nonconviction based) so that the process only focuses on assets. This way, the criminalization of illicit enrichment and the ratification of the asset confiscation bill can be the key to solving today's complicated problems.
Muhammad Fatahillah Akbar
Muhammad Fatahillah Akbar, Lecturer at the Department of Criminal Law, Faculty of Law UGM
This article was translated by Kurnia Siswo.
