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The Effect of Money Laundering in Indonesia

By: CULPA BINHOT (110110090367) PERWIRA(110110090316)

Introduction

The term money laundering first was used in the United States. In the 1930s organized crime organization hid money from their criminal acts by investing in Laundry Mats. By investing in these laundry mats the money that was acquired illegally went through legal transactions resulting in difficulty for law enforcers to track the illicit money. Now money laundering has become a transnational organized crime, and has affected many countries including Indonesia. If Indonesia wants to free itself from money laundering, it has to answer two questions, 1. What measures need to be taken to solve money laundering and, 2. What steps are needed to be taken to sustain a money laundering free in Indonesia.

Money laundering as said before was an act done by organized criminals to hide their illicit money. But what is money laundering truly? According to the United Nations Convention Against Illicit Traffic in Narcotic, Drugs and Psychotropic Substances of 1988, money laundering is the conversion or transfer of property, knowing that such property is derived from any serious (indictable) offence or offences, for the purpose of concealing or disguising the illicit of the property or of assisting any person who is involved in the commission of such an offence or offences to evade the legal consequences of his actions; or the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from a serious (indictable) offence or offences or from a serious (indictable) offence or offences or from an act of participation in such an offence or offences. In the same convention it states that money laundering consists of the acquisition, possession or use of property, knowing at the time of

receipt that such property was derived from an offence or offences or from an act of participation in such offence or offences. In Indonesia money laundering has become a convenient way for corruptors to hide the illicit money they make. Money laundering has grown parallel to the growth of corruption in Indonesia. Indonesia as one of the most corrupt countries in the world also has a high ratio in money laundering. Corruptors in Indonesia invest their illicit money in property and in private companies. Worsening the problem, these money launderers are mostly high government officials that use their power to hide their illicit money. The action of money laundering in Indonesia has many negative impacts like making it harder for law enforcers to track illicit money and inflicting great financial loss to the government. First, it will cause difficulties for law enforcers to solve criminal cases, because illicit money that in itself is evidence is hidden through legal transactions, making it harder for law enforcers to track the illicit money and the perpetrator. Second, because these money launderers are mostly high government officials and the money that is laundered is mostly government money, the government is at great loss. The money that is truly meant for development of the country is gone. The poor become poorer and the development of the country comes to a standstill. Looking at the severity of money laundering, Indonesia has made laws to stop this crime. Undang-Undang nomor 15 tahun 2002 was enacted to counter the rise of money laundering in Indonesia, in this law the punishment for money laundering is a maximal of 15 years in prison. Seeing that money laundering is a transnational crime Indonesia, Indonesia has also signed bilateral and multilateral

treaties and conventions with other countries to stop transnational money laundering. In the end, Indonesia has taken a great step to slow and eventually stop money laundering happening in Indonesia. Now what the government must do is vigorously enforce the law, and make all citizens understand that money laundering will only hurt our country.