Terror leader Abu Bakar Bashir found guilty

Indonesian cleric Abu Bakar Bashir has been found guilty of inciting terrorism and financing an Aceh-based terrorist cell and sentenced to 15 years in prison, ending a decade-long effort by authorities to put the firebrand militant who endorsed the Bali bombings behind bars.

Hundreds of Bashir's supporters, who chanted "God is great" as judges spent hours reading through a summary of evidence, erupted in jeers when the verdict was read out.

Bashir was convicted for arranging the financing of a terrorist cell uncovered in the Indonesian province of Aceh last year, a new grouping that included a who's who of the remnants of the terrorist group Jemaah Islamiah and other assorted militants.

Prosecutors said Bashir was the "emir" of figurehead of the group, and had held at least one planning meeting with Dulmatin, a senior figure in the Bali bombings that killed 202 people, including 88 Australians.

Prosecutors had demanded a life sentence.

Amid an extraordinary security presence that included balaclava-clad snipers on nearby buildings, a defiant and beaming Bashir arrived at the court denouncing Australia and America, saying they wanted to "elimiinate" him because he was "fighting for Islam".

"Australia and America have a very big role ... in determining the court's verdict," Bashir said. "[They would] killl me if they can. If they can't, they just want to get me out of society."

He called on his supporters to keep up the fight for an Islamic state but stopped short of advocating violent retaliation if he was given a lengthy prison term.

"Don't be sympathetic to me, but carry out things on the way to Allah."

Maintaining his innocence before the verdict was read out, Bashir insisted "I am not a terrorist.

"If I helped in Aceh, then it is not wrong. It's in the Koran. It's a defence agains the war on Islam."

Among his supporters at the court were men wearing jackets emblazoned in Indonesian "Holy warrior, not terrorist".

One man leading the chanting was decked out in a shirt with Bashir's photograph printed on the front, and a large image of the former al-Qaeda leader Osama bin Laden on the back.

Bashir was implicated in the Bali atrocity as he co-founded Jemaah Islamiah and some of the members of the cell had attended his school. Bashir repeatedly praised the bombings and those involved as "holy warriors".

He labelled Australian and other foreign tourists who frequent Bali as "maggots".

But authorities failed in an attempt to bring him to justice on unrelated terrorism offences soon after the first Bali bombings in 2002 and Bashir only served a short term for "rebellion".

A second, later, attempt to convict him of conspiracy involving the Bali attacks also failed after an initial guilty verdict was overturned on appeal.

Before the verdict, Bashir said he would appeal against any finding of guilt against him.

It is feared the sentence could spark an angry response from the supporters, and authorities have been on high alert for the possibility of retaliation.

Prosecutors had demanded a life sentence for Bashir, who was accused of using the radical organisation which he now leads, Jemaah Ansharut Tauhid, as a front to fund a terrorist cell and paramilitary camp found last year in a mountainous jungle area of Aceh on the northern tip of Sumatra.

AAP reports: Reading out the verdict, the chief judge said the evidence presented in the case had proved the defendant had "incited others" to commit acts of terrorism by persuading them to undertake military training at the Aceh camp.

"As well, he persuaded them to commit violence, which led to the deaths of policemen, and which created an atmosphere of terror ... especially for the people of Aceh in general."

Bashir, the former spiritual leader of Jemaah Islamiah, the group responsible for the 2002 Bali bombings, has denied the charges throughout the trial, which began in February.

He has not denied knowing about the Aceh camp but has previously said the activities happening there were merely a type of training called idad, which all Muslims must undertake.

A large cache of ammunition and weapons, including AK-47 rifles, was found when the paramilitary camp was raided by police in February last year.

Source: SMH

Indonesia AML Agency Reports 1,800 Officials to Corruption Authorities

Indonesia's anti-money laundering agency on Tuesday called on government institutions, including the House of Representatives and law enforcers, to be transparent about what they do with reports of suspicious bank accounts held by their staff.

Muhammad Yusuf, chairman of the Financial Transaction Reports and Analysis Center (PPATK), said the list of more than 1,800 people who since 2003 had been detected as having suspiciously large bank accounts did not only include young civil servants and police officers, as had previously been said.

The names of the account holders also included some members of the House and officials working in law enforcement institutions, Yusuf said.

He declined to identify people on the list by name, but said the data had been submitted to their respective employers as well as to the police, prosecutors and the Corruption Eradication Commission (KPK) for further action.

“Regarding the details and the development of the legal processes — which cases are legally processed and which are not — you will have to ask them,” Yusuf said of the institutions.

And since it was now up to the institutions to investigate and sanction those unable to explain the source of their wealth, he called for transparency, including for cases that end up being dropped.

“If it turns out true that A has an account containing, let us say, Rp 20 billion to Rp 30 billion [$2.2 million to $3.3 million], but investigations fail to find enough evidence, it is OK, there is no problem with that, as long as the public is told,” Yusuf said.

He said the PPATK was planning to regularly query the relevant government institutions about the progress of the cases reported among their ranks.

“We will do it once every two or three months,” Yusuf said, adding that every time they would synchronize the information they had with those of the institutions concerned.

He added that if the ministries responded that they had to drop an investigation for lack of evidence, his institution would demand data to authenticate the claim rather than accept it on face value. “We want to be more comprehensive, not like in the past,” he said.

The state administrative reform deputy minister, Eko Prasodjo, said last month that his ministry would soon begin investigating the “fat accounts” of young civil servants after PPATK announced that 10 civil servants aged 28 to 38 held bank accounts worth hundreds of billion rupiah. 

The National Police last year said it had investigated reports of 17 suspiciously large bank accounts held by senior police officers. 

Only three of those accounts were found to have irregularities, but those three belonged to officers already convicted of or on trial for other crimes.

On Monday, the private Indonesian Survey Institute (LSI) announced the results of a survey it conducted last month that found that only 44 percent of respondents were satisfied with President Susilo Bambang Yudhoyono’s corruption eradication efforts, the lowest in five years.

The survey blamed long-unresolved cases and the KPK’s declining reputation for the erosion of public trust.

The government on the weekend flagged a plan to force civil servants to disclose their wealth.

Source: Jakarta Globe

Ghana fingered in Australia massive identity fraud

Ghana has been named as one of the countries whose citizens are stealing the identities of Australians.

News out in the Australian media say the theft which is in a large scale involves spies, drug dealers, illegal immigrants and people engaged in money laundering.

The report say passport details of five people emailed to a travel agent for travel for people from Ghana has been found.

One report by the Herald Sun citing documents from the country’s Department of Foreign Affairs and trade says the illegal practice of forging passports of living Australians is widespread.

According to the report, a fake or doctored Australian passport has been found, on average, once a week in the past three years.

Fake passports were detected at ports in countries including Britain, Dubai, Ghana, Thailand, Hong Kong, Indonesia, Malaysia, Egypt, Turkey, and Peru, the report indicated.

According to the report, some of the passports were in the hands of spies, smugglers and thieves.

Australian passports were used in 525 frauds in the last financial year, and many people were caught lying to get a passport, it said.

Source: Citifmonline

Indonesia seen long way from beating money laundering

Urip Hudiono, The Jakarta Post, Jakarta

An economist says Indonesia will continue to be at risk of high inflation, volatile markets and lack of business competitiveness unless it steps up the battle against money laundering.

Despite having been removed from the Financial Action Task Force (FATF)'s money laundering blacklist, Indonesia has much work to do to strengthen domestic laws and institutions meant to tackle the crime, economist Faisal Basri of the University of Indonesia told a forum here over the weekend.

He urged the authorities to use this week's visit by the global money laundering watchdog's Asia Pacific Group (APG) to push for further amendments aimed at strengthening the Money Laundering Law.

"Indonesia must be constantly warned of the dangers of money laundering. Being off the list should not be our only goal in eradicating (money laundering), but how it can help improve the health of our economy," Faisal said.

"The fact now is that Indonesia shows all the symptoms of an economy plagued by money laundering, and there are still many who for their own interests don't want to see a stronger anti-money laundering regime."

Likening laundered money to toxins in the blood stream, Faisal said when illegal funds entered the financial system it made it difficult for monetary authorities to determine effective policies.

He said this was one reason Indonesia had relatively higher inflation than other countries in the region.

Laundered money invested in the capital markets can make these markets more volatile and susceptible to capital flight, he said, while business competitiveness will be distorted by businesses set up merely to launder money.

Laundered money can also contribute to the creation of an "underground economy", which Faisal estimates already accounts for 40 percent of Indonesia's economy -- which, again, can undermine the implementation of economic policies.

"Although this (underground economy) includes the informal sector, it also includes those (sectors) related to corruption, smuggling and the illegal funds being laundered, making the whole economy unhealthy," he said.

Financial Transaction Reporting and Analysis Center (PPATK) chief Yunus Husein expects another amendment of the Money Laundering Law will help in establishing a better equipped institution to deal with the problem.

A proposed amendment to the law was submitted to the House of Representatives in October last year.

If passed, it would require non-financial service businesses and professionals who potentially could be involved in money laundering -- such as car dealers, property companies, jewelry traders, notaries and public accountants -- to report suspicious transactions.

The current law requires only banks and financial service companies to report suspicious transactions.

The amendment also would give more investigative powers to the PPATK, as well as the authority to block financial transactions suspected of being related to money laundering.

This would be the third amendment to the law, which was passed in 2002 after Indonesia was included on the FATF's list of non-cooperative countries.

Indonesia was removed from the list in 2005.

http://www.thejakartapost.com/detailheadlines.asp?fileid=20071029.B08&irec=7

Sri Lanka: International Conference on Countering Terrorism

Sri Lanka: International Conference on Countering Terrorism draws international terrorism experts to Colombo

20th October 2007

The three-day International Conference on Countering Terrorism is now on in Colombo on the theme 'Terrorism: A Challenge to Democratically Elected Governments.' The Conference, brought together renowned terrorism experts, including from the academia and the media, from 23 countries including Australia, China, Czech Republic, France, Germany, India, Indonesia, Russia, Singapore, South Africa, the United States and Vietnam. It was also widely attended by the Diplomatic Community .

Delivering the Inaugural Address, Foreign Minister Rohitha Bogollagama, highlighted that "Sri Lanka had been a foot soldier in the battle against terrorism over a long period of time and notwithstanding some impediments and setbacks, can in several aspects count itself as having been a success story in the battle against terrorism." Sri Lanka's refusal to compromise or condone terrorism while constantly seeking to resolve the conflict through political means, to persuade other states to proscribe the LTTE, prevent money flows and apprehend those conniving with terrorists, has been significant. Successive governments and the people of Sri Lanka have also shown considerable resilience in the face of terror, whilst also ensuring that economic growth was not compromised. The Minister hoped that the deliberations of this Conference would, among other matters focus on the need for states to go beyond merely adopting conventions, to convert these into tangible action by developing enabling legislation and taking concrete action against those including terrorist front organizations operating from their soil. Noting that a bulk of maritime traffic passes through the Indian Ocean region and that in recent times many acts of terrorism had taken place in these waters, the Minister emphasized the urgent necessity to develop robust modalities to arrest the growing threat that faces Indian Ocean states from terrorists.

The former Director of the European Center for the Study of Conflicts in France, and one of the earliest writers in the field of terrorism, Dr. Gerard Chaliand traced the evolution of terrorism over the years. Referring to the LTTE, he said "the independence they ask cannot be granted and should not be granted, not only because no State is willing to accept such a blow to its sovereignity but also because, like the Shining Path or the Khmer Rouges, the LTTE under the leadership of V. Prabhakaran is a totalitarian movement, which has transformed its groups into a killing machine." He said "the most important thing about the LTTE is that it is a totalitarian movement fighting in a country which is democratic." He said the "LTTE has brutally eliminated all other parties or groups willing to represent the Tamils". "An absolutely intolerant sect, no peace seems possible with V. Prabhakaran as we have seen from the peace process of 2002-2005, which was but a tactical truce", Dr. Chaliand added.

Secretary of Foreign Affairs, Dr. Palitha Kohona delivering the vote-of-thanks repeated the unprecedented challenge Sri Lanka faces in combating terrorism and Sri Lanka. He said the world had focused on international terrorism only after 9/11 but terrorism had affected countries long before then. He emphasized that "the international rule of law against terrorism is being strong themed each year," adding that "there are 13 UN Conventions addressing different dimensions of the global terrorist threat and a comprehensive convention is being negotiated." The Foreign Secretary pointed out that "terrorism will never be eradicated solely by cooperation among law enforcement officials. It requires a concerted political effort and policy coordination among countries. Further it also requires an ability to understand and minimize the motivation and impetus that inspire terrorist acts."

Renowned Chairman of the French Anti-Terrorist Judges, Judge Jean Louis Bruguiere, who was the Guest of Honour of the Conference, and addressing the first panel of the day focused on the international responses to terrorism, traced the manner in which international efforts at responding to terrorism have evolved over the years, stating that if the fight against terrorism is an inescapable requirement, "we owe it to ourselves to reinforce our international cooperation at every level, notably by adopting multilateral or bilateral conventions in the field of judicial cooperation as well as extradition." He said the French Government considers "that an organization like the LTTE is a terrorist organization like any other and that its activities even in the area of logistics, have to be repressed with the same vigour as for terrorist networks operating on our [French] soil and threatening us directly" and that on this basis "that in April this year the French Government had dismantled a vast network of Tamil militants who actively supported the LTTE, notably at the financial level."

This session, which was chaired by the Dean of the Faculty of Arts of the University of Colombo, Prof. Amal Jayawardena,while the discussants were the Executive Director of the Regional Centre for Strategic Studies, Dr. Rifaat Hussain and the Senior Terrorism Prevention Officer of the United Nations Office on Drugs and Crime, Vienna, Dr. Ms. Irka Kuleshnyk.

Addressing the panel on regional responses to terrorism, former Commander of the Indian Army, Gen. V. P. Malik emphasized the need to combat and defeat terrorism in all its manifestations. He said "terrorist activities anywhere will stop only when their fuel runs out." Gen. Malik who traced the important steps taken to counter terrorism in South Asia, emphasized the need for a regional strategy and cooperation, but essentially local operatives and doctrines.

Former Secretary General of SAARC, Ambassador Nihal Rodrigo, chaired this session, while the discussants comprised the Associate Research Fellow of the China Institute of International Studies, Prof. Zhang Lijun, the Deputy Director of the Russian Foreign Ministry, Mr. Vladimir Titokerni as well as the Pro-Chancellor and Director of the School of Science and Forensic Science, National Law University Rajastan, India, Prof. P. Chandra Sekharan.

The third thematic session focused on the domestic dimensions of terrorism where the head of the International Centre for Political Violence and Terrorism Research in Singapore, Dr. Rohan Gunaratna, who was the principal speaker, who joining the deliberations on a video link, highlighted the recent successes of the security forces in combating LTTE terrorism. He noted that within the year the Sri Lanka Navy destroyed eight merchant vessels. In order to defeat the LTTE, Dr. Gunaratna articulated the need for strengthening and building capacity in the intelligence field, with a high degree of professionalism, and also stressed the necessity for special forces and elite units that could target the leadership of the LTTE.

Former Inspector General of Police, Mr. Chandra Fernando chaired the discussion at which intervention were made by Deputy Solicitor General, Mr. Dappula de Livera and Prof. Karunaratne Hangawatte of the University of Nevada.

The final panel discussion of the day focused of the critical area of combating terrorist financing, where the Founder and CEO of World-Check, Mr. David Leppan spoke extensively on the manner in which terror groups collect funds and their illegal activities.

Researcher of the Centre for Policing, Intelligence and Counter Terrorism of the Macquarie University of Australia, Mr. Shanaka Jayasekera the co-speaker at this session noted that the LTTE's supply chain capability has been significantly disrupted, estimated at between 65% to 70%. This would result in the need for the LTTE to aggressively campaign for fund raising activities in the 12 top level resource mobilization countries. In order to maintain the advantage the Government has achieved, it is imperative that the fund-raising be curbed with international cooperation in the next few months. Therefore it is suggested that a contact group be established as a prelude to the commencement of a political process."

The Deputy Governor of the Central Bank, Dr. Ms. Ranee Jayamaha chaired the sessions, at which the discussants were Mrs. Joan De Zilva Moonesinghe formerly of the Financial Investigation Unit and the Advisor of the Financial Investigation Unit of the Central Bank, Mr. Eric Stonecipher.

Ministry of Foreign Affairs
Colombo

20 October 2007

U.S. Intelligence Chief Outlines Successes Against Terrorism

Michael Hayden, the director of the Central Intelligence Agency, spoke recently of the international community's successes against terrorism in key regions of the world and diminished worldwide support for al-Qaida.

Hayden told the Washington-based Atlantic Council of the United States November 13 that the United States - in cooperation with partners such as Iraq, Saudi Arabia, Indonesia and the Philippines - has greatly diminished the reach of several terrorist groups.

Al-Qaida in Iraq, for example, "is on the verge of strategic defeat," with the flow of money, weapons and foreign fighters into Iraq now "greatly diminished," Hayden said.

And al-Qaida's operational arm in Saudi Arabia largely has been defeated, he said. Indonesia has made inroads in detecting and disrupting terrorist plots in the past three years as a result of what he called "aggressive action by one of our most effective counterterrorism partners." Filipino allies have kept the pressure on the Abu-Sayef group, Hayden said, limiting its effectiveness.

While the remote, tribal areas on the Afghanistan-Pakistan border remain problematic, progress has been made, according to the CIA director. He said the practice of terrorists taking refuge in Pakistan's Federally Administered Tribal Areas is lessening. Due to cooperation among the Pakistan government, its military and the U.S. intelligence community, terrorist networks have lost many "decision makers, commanders, experienced and committed fighters" who, Hayden said, planned attacks against Europe and the United States.

The Pakistani government and military "deserves great credit for its current campaign against extremists," he added. More al-Qaida leaders have been killed or captured "in partnership with our Pakistani allies than ... with any other partner around the world," Hayden said.

The CIA official cited another reason for optimism in the fight against terrorism: "Some hard-line religious leaders are speaking out against al-Qaida's tactics and its ideology." Hayden cited generic polling showing declining support for al-Qaida and Osama bin Laden in predominantly Muslim countries.

More and more Muslims "are pushing back against the senseless violence and flawed worldview of al-Qaida," he said. Credible, authentic, influential Islamic voices are speaking out and "refuting al-Qaida's twisted justification for murdering innocents" as well as its ideology seeking to erase the distinction between combatants and noncombatants.

Besides Pakistan and Indonesia, Hayden praised the counterterrorism efforts of other U.S. partners such as Saudi Arabia and Iraq. Military and law enforcement activities and even efforts addressing the conflict of ideas have resulted in improvements in the Middle East and Southeast Asia, he said. "I have always said that the civilized world will win this fight when we win the war of ideas," he added.

NEXT STEPS

Efforts to defeat al-Qaida in the near future will continue to center on Yemen, Somalia and the Afghan-Pakistan border, according to Hayden. Intelligence suggests that some veterans of terror operations in Iraq are now drifting to other regions, such as North Africa and the Arabian Peninsula, in search of new action.

Even though al-Qaida has suffered serious setbacks in Iraq, Afghanistan and Pakistan, the intelligence-agency director said, "it remains a determined, adaptive enemy." Al-Qaida is still "the most dangerous threat we face," he told the Atlantic Council's Global Intelligence Forum.

In Hayden's opinion, al-Qaida's base of operations on Pakistan's border with Afghanistan remains "the single most important factor today in the group's resilience and its ability to threaten the West." He contends that the remote, tribal areas along the Afghan-Pakistan border have supported terrorist financing, recruiting, training and plotting in the past.

While al-Qaida-related operations in the tribal regions do not rise to the level of activity that once existed in Afghanistan, Hayden said, its recent efforts to destabilize Pakistan are worrisome.

The Pakistani army has been fighting extremists "forcefully and with considerable success since early August," Hayden said. The Pakistanis have a multibrigade operation under way in the tribal area of Bajaur, and while they have sustained losses, "they are also imposing significant casualties on our common enemy."

But when al-Qaida is dealt a blow, Hayden said, its senor leadership recalibrates. "They constantly look for ways to make up for losses, extend their reach, take advantage of opportunities, and we're seeing that ... in some places like ... Somalia or Yemen."

Yemen has witnessed an unprecedented number of attacks in 2008, Hayden said, including two against the U.S. Embassy. The sophistication of attacks and the range of targets are broadening. Hayden said that, like what has happened elsewhere, terrorist cells in Yemen "are operating from remote, tribal areas where the government has traditionally had very little authority."

That al-Qaida tends to gain strength only in isolated, ungoverned territories "may be the most damning thing we can say about this organization," Hayden said. It can subsist only beyond the reach of civilization and the reach of the rule of law.

HANDLING THE TRANSITION

As head of the CIA, Hayden's service may continue into the Obama administration, although frequently a new president appoints his own director. Asked about his interest in continuing in his present position - which includes conducting daily presidential intelligence briefings at the White House - the director said he serves at the pleasure of the president, but would consider staying if asked.

As this is the first wartime presidential transition for the United States in 40 years, some thought is being given by transition officials to keeping some Bush appointees, at least temporarily, so the transfer of power from one administration to another is as seamless as possible.

Hayden said members of the Bush administration have been directed to "make this the smoothest transition in recorded history." With the United States on a wartime footing and al-Qaida already having made a critical remark about President-elect Barack Obama on the Internet, the director said, efforts are under way to get a new team ready for any contingency as swiftly as possible "so that there is no diminution in the ability of the Republic to defend itself."

Video of the forum ( http://www.acus.org/event_blog/cia-director-event ) is available on the Atlantic Council Web site. A transcript of Hayden's remarks ( https://www.cia.gov/news-information/speeches-testimony/directors-remarks-at-the-atlantic-council.html ) is available on the CIA Web site.

For more information about U.S. policy, see Confronting Terrorism ( http://fpolicy.america.gov/fpolicy/security/counterterrorism.html) on America.gov.

Source: NewsBlaze

Indonesia: Money laundering hard to beat

Dicky Christanto, The Jakarta Post, Denpasar

No major progress is evident in Indonesia's fight against money laundering, three years after the financial intelligence agency started work.

Chairman of the Indonesian Financial Transactions Report and Analysis Center (PPATK) said Tuesday the government lacked data on money recovered from money laundering.

"This weakness has made it hard for us to show progress. I hope the government will take this into consideration," he said.

When asked about national performance in combating money laundering, Husein said the results were "so-so".

"Of course there have been cases we have managed to tackle, in cooperation with other law enforcement agencies, but I admit there are many cases unsolved," he said.

Revision of the 2003 money laundering law has been in limbo since last year, as many have opposed expansion of the PPATK's authority. The draft revision requires that professionals and goods and services providers should come within the remit of the PPATK, as well as financial service providers.

PPATK is hosting the third Asia Pacific Group (APG) discussion on money laundering, which opened Tuesday and lasts until Friday.

Yunus said during the four-day event that participants would exchange and update information on money laundering cases, as well as evaluate progress combating it. APG members will evaluate Indonesia's progress report Wednesday.

In his opening remarks, Coordinating Minister for Political, Legal and Security Affairs Widodo Adi Sucipto said Indonesia was expecting much from the discussions to help improve its efforts to address money laundering.

"We should intensify international cooperation and maintain the speed and accuracy of information exchange through this meeting, as money laundering cannot be conducted within a single jurisdiction, acting alone," Widodo said.

"I hope we will identify innovative strategies to bring about an international community free from money laundering, terrorism and terrorist financing."

Participants included National Intelligence Agency (BIN) chief Syamsir Siregar, president of the Financial Action Task Force (FATF) Antonio Gustafo Rodriguez and commissioner of the Australian Federal Police Mick Keelty.

The regional discussions are attended by 290 senior officials from 36 member countries and six observers, plus representatives from 19 international organizations.

FATF president Antonio Gustafo Rodriguez expected the conference to help APG formulate mechanisms to combat money laundering and terrorist financing.

"A global solution is needed as money laundering and terrorist financing have become a global challenge for us all," he said.

Source: The Jakarta Post

Indonesia: Police arrest two linked to money laundering syndicate

Police said Thursday they had arrested two people linked to international money laundering crimes on the Internet.

"The suspects were arrested two days ago in Medan *in North Sumatra*," National Police chief of criminal investigation division Com. Gen. Susno Duadji told The Jakarta Post.

"They are suspected of committing fraud via the Internet," he added.

Tempo Interaktif news portal identified the suspects as Hendrianto, a 45-year old Indonesian citizen and Singaporean Yap Kok Yong Carlson, 30, who were swooped on at the Swiss Bell Hotel in Medan.

Susno said the police were still pursuing four other members of the syndicate, namely Andreas Nicholas, a UK national, Ricard Pereira of Singapore, Phanos Tenizes of Cyprus and Christanto of Indonesia.

Susno said the four fugitives were already on an international wanted list of criminals.

"We are cooperating with the British Interpol to nab Andreas," he told tempointeraktif.com earlier Thursday.

The investigation, Susno said, began when the Austrian Embassy received a report from one of its citizens, Emmeran Fischer, who had fallen victim to the syndicate.

Fischer, Susno said, saw an ad-vertisement for cheap electronic goods at www.alibaba.com. On Dec. 8, 2008, Fischer met with the suspects at the MMTC Warehouse, on Jl. Williem Iskandar No. B-20 in Pancing, Medan.

Their transaction involved 32,000 units of electronic goods, including 5,000 Nintendo Wiis, 5,000 Nintendo NHL Games, 5,000 Nintendo Pro Evolution Games, 5,400 Sony PS3s, and 800 Apple iPhones.

"The transaction had a value of around US$1 million," said Susno. Fischer transferred the money to Bank Mega's branch in Batam, through the JP Morgan Chase Bank in New York.

The delivery was made to company named Anugerah Jaya Perkasa. However, when the delivery deadline came around on Dec. 20, 2008, the purchased goods never arrived in Vienna, Austria.

The offenders claimed bad weather had impeded the delivery, and requested more money to send the goods by sea.

"The victim then sent an additional $900,000 for the delivery," Susno said. "But the promise was still not upheld."

Following leads from the report, the police went to the warehouse and found two boxes containing thousands of packages.

However, when the packages were thoroughly searched, police revealed they contained nothing more than bricks and paper.

"Only three packages contained electronic goods and they were the samples used during the initial transaction," he said.

The police and the Report and Financial Transaction Analysis Center (PPATK) are currently investigating a possible money laundering operation through three bank accounts belonging to the suspects.

The banks involved Panin Bank's branch in Medan, Bank Niaga's branch in Medan, Bank Mega's branch in Medan and DBS Bank in Singapore

Source: The Jakarta Post

Indonesia: House Under Pressure For Money Laundering Bill

The House of Representatives’ Commission III on law and human rights agreed on Monday to push deliberation of money laundering prevention and eradication bill as international pressure mounts for Indonesia to cooperate in efforts against the crime.

A working party will be set up to discuss the bill, which if approved, would replace a 2002 law. The new law would aim to boost the authority of the Financial Transaction and Report Analysis Center (PPATK) in dealing with money laundering cases.

Yunus Husein, PPATK’s head, said the existing law against money laundering did not meet international standards. Unlike in Malaysia, Singapore and Australia, for example, only entities dealing with financial issues such as banks, money changers, pension funds, insurance companies and post offices are mandated to report suspect transactions to the PPATK, he said.

Yunus said tainted money could enter business transactions involving property, jewelry and even through certain professions such as the law.

He hoped the House would speed up discussion of the bill, which the government submitted to the House three years ago.

He also said that several political parties had different drafts. One party, he said, opposed a proposal to give PPATK authority to tap a phone conversation, while another wanted to secure financial privacy in bank records.

Yunus said that he did not mind if PPATK were not given authority to tap phones as long as it still could access records from telephone providers or other law enforcers such as the police and the Corruption Eradication Commission (KPK).

“In the stock exchange, people manipulate trading, but we don’t know who controls the money and it would be hard to prove the transaction link without knowing about the conversation,” he said.

“If we want to know the link, we really need [to know about] the conversation, because money doesn’t talk,” Yunus said.

Andi Mattalatta, the Justice and Human Rights Minister and a Golkar Party member, said that while his party did not believe PPATK should have the authority to tap phone conversations, the Democratic Party believed this should be allowed.

Andi said a proposal from a House faction had asked for the removal of the word “prevention” from the bill’s title, leaving only “eradication,” but he said the term was needed as prevention was more effective in tackling money laundering.

“We still need prevention, because we can only save the state 10 percent if the case has already occurred,” the minister said.

Source: Jakarta Globe

Sri Lanka FIU signed MOUs with FIUs of Philippines and Nepal

The Financial Intelligence Unit (FIU) of Sri Lanka recently signed Memoranda of Understanding (MOU) with FIUs of Philippines and Nepal to share financial information to facilitate the investigation and prosecution of persons suspected of money laundering and terrorist financing.

The signing ceremony was held in Brisbane, Australia during the Annual Meeting of the Asia Pacific Group on Money Laundering, said the Central Bank of Sri Lanka in a press release.

FIUs have been established in more than 130 countries as dedicated institutions to facilitate fight against money laundering, terrorist financing and other unlawful activities.

In Sri Lanka the FIU was established in 2006 under the Financial Transactions Reporting Act (FTRA) No.6 of 2006 and now operates in the Central Bank of Sri Lanka.

It also said money launderers and terrorist financiers are most often internationally connected and operate across borders. Financial intelligence and authorities also need to be internationally organized to fight these activities. Therefore, there is a need for FIUs to co-operate with each other and to exchange information.

MOUs will facilitate greater co-operation and co-ordination among FIUs in the exchange of financial intelligence.

The FIU-Sri Lanka has already entered into MOUs with Malaysia, Afghanistan, South Korea and Indonesia. Arrangements are currently being made to sign similar MOUs with other FIUs in the region including India, Bangladesh and Japan.

Source: Isria

Lawmakers to provide legal protection to PPTAK

House of Representatives politicians initiating an inquiry into Bank Century scandal have pledged to provide legal protection to the Financial Transactions Report and Analysis Center (PPATK) to unveil recipients of suspicious transfers of the bailout funds the bank has received.


Maruarar Siarit of the Indonesian Democratic Party of Struggle (PDI-P) said on Saturday the anti-money laundering body could disclose the suspicious transfers to the House’s special committee of inquiry.

“That’s what the inquiry is for. The forum is protected by the law. From the beginning we the initiators of the inquiry motion have provided legal protection to whoever wants to tell the truth,” Maruarar was quoted by kompas.com.

Maruarar and a number of House lawmakers from various factions met with former president Abdurrahman “Gus Dur” Wahid at the Nahdlatul Ulama office on Saturday to seek the latter’s support for the inquiry.

The initiators, called the Team of Nine, will invite PPATK chairman Yunus Husein for a meeting to hear from him legal barriers to efforts to unveil the recipients of the suspicious transfers.

The 2003 law on money laundering prohibits PPATK from revealing such bank transfers to the public.

The House will hold a plenary session on Dec. 1 to decide whether to approve an inquiry into the scandal. Speculation has been rife that some of the Rp 6.76 trillion bailout funds went to a political party linked to President Susilo Bambang Yudhoyono to help him win reelection.

Yudhoyono and Vice President Boediono have denied the allegations.

Source: The Jakarta Post

Indonesians plead guilty for trying to export arms illegally

BALTIMORE (AP): Two Indonesian men have pleaded guilty to tryingto illegally export arms to Indonesia through undercover U.S.federal agents, a sting that also netted a suspectedinternational arms dealer and three men associated with the SriLanka rebel group the Tamil Tigers.

Reinhard Rusli, 33, and Helmi Soedirdja, 34, who also pleadedguilty to money laundering, represented one of two conspiraciesthat federal agents allege were being orchestrated by suspectedinternational arms dealer Haji Subandi of Indonesia. They enteredtheir pleas in court Tuesday.

Reinhard and Helmi, as well as the other men, were swept up inan undercover operation conducted by U.S. Immigration and CustomsEnforcement, the FBI and the Defense Criminal InvestigativeService.

The pair contacted undercover agents to acquire night visionand holographic weapons sight devices, which they said would beused by the Indonesian military. The hardware they were trying tobuy was on a list requiring a special license or permission fromthe U.S. State Department to export them.

"The technology itself could be extremely dangerous if it falls into the wrong hands," said Jim Dinkins, acting specialagent in charge of ICE's office in Baltimore. "It couldeventually be used against the United States."

In the other conspiracy, Subandi made numerous requests to theundercover agents between March 2004 and April 2006 on behalf ofTamil Tigers to acquire night-vision goggles, special forcesweaponry, communication devices, sonar technology and unmannedaerial vehicles, according to a federal indictment.

Subandi has been charged with Haniffa Bin Osman and ErickWotulo. They are charged with conspiracy to export arms andmunitions, conspiracy to provide material support to a foreignterrorist organization, and money laundering. ThirunavukarasuVaratharasa, 36, of Sri Lanka, also is charged with being part ofthe conspiracy.

Authorities said that among the weapons Osman sought topurchase were surface-to-air missiles.

All the men were arrested in September in Guam, where they metto examine the weapons, which weighed 3.5 tons and filled up 14pallets in a truck. They remain in federal custody, and a trialwas scheduled for May 14 in federal court in Baltimore.

The Tamil Tigers are a rebel group that began fighting in 1983for a separate state on Sri Lanka. The group was added to the U.S. State Department's list of foreign terrorist organizationsin 1997. The designation bars the group from raising money,obtaining weaponry or lobbying for support in the United States.

Reinhard and Helmi face a maximum sentence of 20 years inprison, followed by five years of supervised release and a$500,000 (euro385,000) fine for money laundering and 10 years inprison, followed by three years of supervised release and a$1,000,000 (euro770,000) fine for attempted exportation of arms.

U.S. District Judge Catherine Blake scheduled sentencing forReinhard and Helmi for April 27. (**)

http://www.thejakartapost.com/detailtoplatest.asp?fileid=20070131103929&irec=0

Indonesia: “Money Laundering Still Difficult for AGO to Handle”

The Attorney General’s Office (AGO) is still experiencing difficulties in handling money laundering cases despite the Financial Transactions Reporting and Analysis Center (PPATKA) always providing carbon copies to the AGO in relation to money laundering.

“Authority over money laundering and the type of crime that it is still haven’t yet been determined as a criminal act of corruption,” said Attorney General Abdul Rahman Saleh, during a hearing with the House Law Commission, on Monday (29/1).

Rahman Saleh said currently the AGO continues to study money laundering criminal acts.

Up to now, he went on to say, the PPATK more often reports money laundering case to the police.

However, Rahman Saleh said, the AGO also feels it has the right to handle money laundering cases.

“A decree which emphasizes that money laundering is included in criminal acts of corruption is necessary,” he said.

In the mean time, Yasonna Laoli, House Law Commission, said that it was better for the AGO to have authority over the handling of money laundering cases.

The reason for this, he said, was that many of the money laundering sources were results of corruption.

http://www.tempointeractive.com/hg/nasional/2007/01/29/brk,20070129-92138,uk.html

ASEAN leaders agree to put teeth into group

By Bill Tarrant

CEBU, Philippines (Reuters) - Leaders of the Association of Southeast Asian Nations adopted on Friday bold proposals that could turn a group often derided as a talk shop to a rules-based bloc with bite.

The 10 leaders, whose members range from an absolute monarchy and military juntas to parliamentary democracies and one-party communist states, have agreed to start drafting a charter that would give ASEAN a legal basis for the first time since it was founded at the height of the Vietnam war nearly 40 years ago.

At a news conference to announce the decision, an ASEAN "Eminent Persons Group" said they studied the European Union as a reference, but that ASEAN would not become another Brussels.

"Since visiting the EU, I've become more conservative with ASEAN, because we learned that the EU is not that good an organisation that can be transferred to ASEAN," said former Malaysian deputy premier Musa Hitam.

The group will still take decisions by consensus for sensitive issues, but will conduct voting over non-controversial issues, according to a summary of the proposals.

The most ground-breaking proposal gives ASEAN the power to suspend, or in extreme cases, expel members for serious breaches of the charter.

Panel chairman and former Philippines president Fidel Ramos said an ASEAN charter will allow the group to compete as a bloc in the "new order" of the 21st century.

"We must reposition ourselves to be more competitive in a globalised economy and the new order of the 21st century."

CARING AND SHARING

The ASEAN leaders arrived in the central Philippines city of Cebu for a summit -- rescheduled from last month amid typhoon and terrorist warnings -- that aims to create a "caring and sharing" community in the region.

Men in traditional island gear stood atop a new convention centre in Cebu blowing conch horns. Women in flowing green gowns danced and twirled red umbrellas on the ground as presidents, prime ministers, a king and former generals pulled up in limousines.

Searchlights raked the night, filled with the sounds of beating drums and shrieking whistles in a cacophonous Filipino welcome.

A sudden downpour did little to dampen spirits for the biggest event in Cebu since Ferdinand Magellan ended his circumnavigation of the globe here in 1521, slain by a chieftain unhappy that his land was being claimed in the name of Spain.

The Philippines was on high alert after three bombings on Wednesday night, hundreds of miles to the south of the venue, killed eight people and wounded dozens.

Officials suspected Islamic militants and said the blasts were designed to embarrass the Philippines ahead of the ASEAN meetings and a broader East Asia summit next week. More than 13,000 police and troops have been deployed in and around Cebu.

The series of ASEAN meetings began with foreign ministers rebuking Myanmar on Thursday for dragging its feet on democratic reforms it has promised ASEAN it would take.

The new charter proposals could theoretically put Myanmar's membership in jeopardy if the junta continued to be recalcitrant.

The grouping, with a population the size of Europe's, plans to bring forward the establishment of an economic community from 2020 to 2015, according to a draft declaration.

ASEAN leaders will also discuss poverty alleviation in countries that have some of the globe's smallest per capita incomes, and disaster prevention in a region that has seen a devastating tsunami, earthquakes, volcanic eruptions, floods, forest fires and pandemics over the last couple of years.

Southeast Asian leaders will also sign a counter-terrorism agreement that will clamp down on the movement of arms and fighters between its remote islands through information exchange, border controls and a crackdown on terrorist financing.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

(Additional reporting by Carmel Crimmins, Manny Mogato, Chris Buckley, and Rosemarie Francisco)

© Reuters 2007. All Rights Reserved.

http://in.today.reuters.com/news/newsArticle.aspx?type=worldNews&storyID=2007-01-12T193955Z_01_NOOTR_RTRJONC_0_India-283347-1.xml

Indonesia: Finance Ministry steps up anti-corruption campaign

Urip Hudiono, The Jakarta Post, Jakarta

The Finance Ministry's inspector general and anti-money laundering watchdog the Financial Report and Analysis Center (PPATK) have agreed to step up efforts to confront corruption in the ministry.

Under the memorandum of understanding signed in Jakarta Friday, the Finance Ministry and PPATK will improve first-step detection and prevention of any indicated acts of corruption within the ministry by sharing information about any suspicious financial transactions relating to officials, ministry inspector general Permana Agung said.

"The reporting and recording of such suspicious transactions are important if we want to eradicate corruption -- to collect the preliminary evidence needed to indict any indicated acts of graft," he said.

The MoU was signed by Permana and PPATK head Yunus Husein.

It is expected to strengthen the inspector's investigation bureau, formed in 2004, and follow similar agreements already signed between the Finance Ministry's directorate generals and the PPATK.

The MoU also adds to cross-cooperation already existing with the Corruption Eradication Commission, the Supreme Audit Agency, Bank Indonesia, the National Police, and the Attorney General's Office.

Yunus said he expected the MoU would further help the efforts of authorities to prevent money laundering, particularly of funds coming from corruption.

"Even criminals work together -- that's why it's called organized crime -- so why don't the authorities cooperate as well?" he said.

Yunus said that 178 of the 433 cases PPATK had submitted to law enforcers for follow up being related to corruption. The total amount of money involved added up to around Rp 100 trillion.

The PPATK had, as of last year since its establishment in 2002, received 6,793 suspicious transaction reports and nearly 2 million transactions above Rp 500 million from the financial sector, as well as 1,432 cash transactions above Rp 100 million from the customs.

Perama said the Finance Ministry's tax office, customs office and the treasury directorate general were the areas of the ministry with the greatest records of corruption.

Finance Minister Sri Mulyani Indrawati, who witnessed Friday's MoU signing said the new cooperation with PPATK was not aimed at finding a scapegoat for corruption within the ministry, but to improve the ministry's overall performance.

"What's important is building trust within and with PPATK, so we can all work better in the future," she said.

http://www.thejakartapost.com/detailbusiness.asp?fileid=20070113.L02&irec=1

Abu-linked group’s bank account frozen in Philippines

By Rey E. Requejo

The Court of Appeals has ordered a freeze on the bank accounts of International Islamic Relief Organization, suspected to be a conduit of funding for Abu Sayyaf and other groups linked to Al Qaida in the country.

In a four-page resolution penned by Associate Justice Arcangelita Romilla Lontok, the CA’s Third Division issued the freeze order at the request of the Anti-Money Laundering Council. Covered by the court order is IIRO’s bank account number 0200100100000011145671, with the Bank of Philippine Islands.

The court said there is probable cause that the account is being used to bankroll terrorist activities in the country. Associate Justices Portia Alino Hormachuelos and Amelita Tolentino concurred with the ruling.

IIRO, a Saudi-based charitable institution the United States which has been associated with terrorism , is being suspected of funding terrorist attacks overseas, including the Sept. 11, 2001 attacks in the US where thousands of people were killed.

“Having determined that probable cause exists thus finding merit in the petition, a freeze order, effective for a period of 20 days against account no. 0200100100000011145671, in the name of Islamic Relief Organization with the Bank of Philippine Islands and all related web accounts is granted and subject bank is also ordered to submit to this court and the AMLC a detailed return on the freeze order within 24 hours from receipt,” the CA ruled.

AMLC sought the freeze on IIRO’s bank account after the US Department of Treasury issued a press release citing the involvement of IIRO’s the organization’s branches in the Philippines and Indonesia in the fund raising for Al Qaida and its affiliates.

The press release also revealed that the IIRO’s branch in the country served as liaison for ASG with other Islamic extremist groups.

In seeking the freeze of the organization’s bank accounts, AMLC cited the approval of the United Nations 1267 Sanctions Committee on Aug. 4, the inclusion of the Philippine branch of the IIRO and Abd Al-Hamid Sulaiman Al-Mujil to its list of individuals and entities associated with Osama bin Laden. Al-Mujil is an executive director of the organization in the Saudi Arabia.

The anti-money laundering body told the court that the US government, through its embassy in Manila, requested the assistance of the Philippine government to check the existence of funds and economic resources, including property or interests in property owned or controlled directly or indirectly owned by Al-Mujil and IIRO’s Philippine branch and to freeze the same if any be found.

Investigations conducted by AMLC showed the existence of account no. 0200100100000011145671 and 0200200100000012000472 under the name of IIRO with the BPI. But further investigation indicated that only account no. 0200100100000011145671 is active.

AMLC subsequently issued Resolution 81, series of 2006, which authorized the executive director of the AMLC-Secretariat or the Office of the Solicitor General to file an application for the issuance of a freeze order against the said bank account.

The council said the freezing of the bank account is consistent with the provisions of the UN Security Council’s Resolution 1373, which requires UN member states “to freeze terrorist assets without delay and to prohibit their nationals or persons in their territories from financing terrorism.”

http://www.manilastandardtoday.com/?page=politics3_dec12_2006

Two arrested for money laundering

JAKARTA: The city police said Monday they had made two arrests in connection to a US$3.1 million money-laundering case at pulp and paper maker group Raja Garuda Mas.

The chief of the city police's monetary crime division, Sr. Adj. Comr. Aris Munandar, identified the two suspects as Hendri Susilo and Agustinus Feri Sutanto.

"We arrested Hendri on Dec. 2 at a nightclub in Hayam Wuruk, West Jakarta. Ferry was arrested two days later in Grogol, West Jakarta," Aris said.

The two are believed to be accomplices of Raja Garuda Mas finance executive Vincent, who remains at large.

Aris said police began investigating the case after receiving a report from the company on Nov. 16.

Aris said that under orders from Vincent, Hendri had set up clearing accounts under fictional companies named PT Asian Agri Jaya and Asian Agro Utama at Bank Panin, Jakarta. On Nov. 16, US$ 3.1 million was transferred into the accounts from an account under the fictional companies' names at Singaporean Fortis Bank.

"We suspect Vincent of embezzling money from RGM (Raja Mas Group) and moving it through different bank accounts," Aris said.

Ferry withdrew cash from the bank a few days before he was caught, but told journalists: "I don't know anything, I was only helping my brother".

Hendri has confessed to his part in the crime.

"I did set up fictional companies and clearing accounts under those companies under Vincent's orders," he said. --JP

http://www.thejakartapost.com/detailcity.asp?fileid=20061212.C06&irec=5

Indonesia, South Africa, Cayman expand cooperation on money laundering

JAKARTA (AFP) - Indonesia's anti-money laundering watchdog has signed agreements with the Cayman Islands and South Africa to exchange financial intelligence and help combat the financing of terrorism.

http://cayman-island-travel.com/2006/12/11/indonesia-south-africa-cayman-expand-cooperation-on-money-laundering-afp-via-yahoo7-news/

Myanmar state bank rejects deposits suspected as money laundering

The state-run Myanmar Economic Bank (MEB) has rejected to offer bank services to deposits suspected as money laundering, the local Voice journal reported Monday, quoting the bank sources.

Previously, some MEB made no investigation on sources of money with which depositors opened their accounts, the report said.

In June 2002, Myanmar promulgated a law to control money laundering and financial institutions such as banks were set to report to the Central Control Board (CCB) their clients' fiscal activities and report any cashes exceeding 100 million kyats (100, 000 US dollars) and any other suspicious account activities.

In 2005, the Myanmar authorities closed three local private banks -- the Myanmar Mayflower Bank, the Asia Wealth Bank and the Universal Bank for allegedly linking with money laundering and the banks' operation has been taken over by the State Economic Bank.

Meanwhile, The CCB of Myanmar and the Anti-Money Laundering Office of Thailand reached a MoU on such cooperation in July 2005, which covers exchanging information on financial intelligence relating to money laundering.

Another MoU with Indonesia on the same purpose is also being expected to be initiated soon, local reports said, adding that once the document is formally signed, Indonesia will become another member country of the Association of Southeast Asian Nations (ASEAN) with which Myanmar cooperates in combating money laundering after Thailand.

As one of the international assistance in suppressing money laundering, Australia is funding Myanmar a 15-month project of developing guidelines for financial investigators of the country since October 2005, which has been under implementation by the Australian Transaction Reports and Analysis Center, according to the Financial Intelligence Unit of the Myanmar Home Ministry.

The project covers a series of workshops to train Myanmar officials in terms of technique for investigating money laundering, courses on online banking, electronic reporting, data analyzing systems and combating financial terrorism.

As part of its increased international cooperation in the aspects, Myanmar joined in signing the UN Convention Against Transnational Organized Crime in April 2004.

Private banks were nationalized in Myanmar in 1963 during the previous government but after the country started to adopt the market-oriented economic system in late 1988, private banks were allowed to operate again since 1992 and since then there had been 20 such banks across Myanmar with a total of 350 branches.

With the take-over of the three banks by the government and the merger of three other cooperative banks to become a public-listed bank in recent years, there remained 15 of such banks in operation as of the end of 2005.

Source: Xinhua

http://english.people.com.cn/200612/11/eng20061211_331113.html

KPK signs MoU to help fight corruption in banking sector

Bank Indonesia and the Corruption Eradication Commission (KPK) have signed a memorandum of understanding (MoU) to improve cooperation in the prevention and tackling of corruption in the banking sector.

The MoU, signed by BI Governor Burhanuddin Abdullah and KPK director Taufiequrachman Ruki, envisages the establishment of an integrated "bank-customer information assessment center", as well as programs to improve the capacity of personnel in the two institutions in handling banking-sector corruption cases.

"We expect that the effort to eradicate corruption will become more effective from now on, while at the same time avoiding negative excesses," Burhanuddin said.

"Fighting corruption should help the economy and growth, instead of hampering them."

Burhanuddin's words are in contrast to recent remarks by Vice President Jusuf Kalla, who said the anticorruption drive had led to reluctance among public officials about making decisions, especially over procurements.

He claimed that many executives of state-owned banks were reticent about extending project loans out of fear of later being accused of corruption. Similarly, he argued, many managers of state-financed projects were also afraid to make spending decisions, to the detriment of economic growth.

For his part, Burhanuddin said that many of the controversies affecting the banking industry were not necessarily indications of graft. Therefore, he said that he hoped better coordination and cooperation between BI and the KPK should help straighten out possible misunderstandings.

Burhanuddin further said that BI had itself been active in promoting transparency and accountability within the banking sector, requiring lenders to implement such principles as "Know Your Customer", good corporate governance and proper selection tests for bank managers and owners.

BI previously signed MoUs with the Attorney General's Office (AGO), the National Police and the country's anti-money laundering watchdog, the Financial Transactions Reporting and Analysis Center (PPATK), with a view to preventing banking sector crimes. Meanwhile, the KPK recently signed an MoU with the PPATK.

Commenting on BI's hopes that the latest MoU would help clean up the banking sector, Bank Negara Indonesia president Sigit Pramono, who also attended the event, said that the anti-graft drive had created problems for many bank executives due to its "shock-therapy" nature.

"Of course, there will be some adverse effects, but we cannot simply say that there has been less lending as a result," said Sigit, who also chairs the National Banks Association (Perbanas).

"In addition, there are problems in the real sector hampering higher credit growth."

BI figures show that total bank lending amounted to Rp 66 trillion as of October, representing an increase of only 8 percent compared to the same period last year -- much lower than the 13-15 percent target.

A slowdown in economic growth this year -- rather than the antigraft drive -- is seen by most objective commentators as being the main reason for the disappointing loan growth, with high inflation and interest rates curbing consumer demand and spending, and borrowing demand from companies.

http://www.thejakartapost.com/detailbusiness.asp?fileid=20061209.L01&irec=0