Indonesia prepares terror financing law

Khabar Southeast Asia

Indonesia prepares terror financing law

Agus Santoso, deputy chairman of the money-laundering watchdog PPATK, hopes Indonesia will have a new law targeting terrorist financing by February. The law would enable authorities to freeze bank accounts used to finance terrorism.

Agus Santoso, deputy chairman of the money-laundering watchdog PPATK, hopes Indonesia will have a new law targeting terrorist financing by February. The law would enable authorities to freeze bank accounts used to finance terrorism. [2012: Oktofani]

New legislation will enable authorities to seize assets and freeze bank accounts.

Indonesia hopes to have a potent new weapon against terrorism this year: a law enabling authorities to freeze bank accounts or seize assets of terrorists and those who finance them.

The law will create the legal mechanisms needed to target terror financing, according to Agus Santoso, deputy chairman of the Financial Transaction Reports and Analysis Centre (PPATK), an independent institution charged with fighting money laundering and other financial crimes.

“We have been working on this regulation for the past three years. We really hope that it will pass by February 2013,” he said, adding that the law is urgently needed.

From January to July 2012, financial service providers reported 191 suspicious financial transactions to PPATK. Analysis of the transactions found that 48 were linked to terrorism financing.

The proposed law is not the result of pressure from other nations, Agus said. “We know for a fact that Indonesia has been threatened with terrorism for many years. Therefore, our need for this law is real,” he said.

Terrorism risk undermines economy

Although the country insists it does not need outside pressure in order to act, experts acknowledge there is a concern about meeting global standards.

“Indonesia is one of two G-20 countries that does not have regulations regarding the funding of terror-related activities,” Santoso said.

On December 12th, Indonesian Finance Minister Agus Martowardojo said the timing is becoming urgent. Without the new statute, international institutions such as the Financial Action Task Force (FATF) could label Indonesia a non-cooperative jurisdiction, he told reporters.

“It needs to be passed soon because FATF will review Indonesia in 2013. We need that law to be able to say that Indonesia has a law to prevent funding for terrorists,”
he said. “If we are downgraded to a non-cooperative jurisdiction, we will be put on the same level as countries unworthy of international financial transactions.”

Being labeled “unworthy” could hurt the country’s economy, the finance minister added.

Militants find innovative ways to obtain funds

Recent incidents underscore the need for updated legislation as extremist cells find sophisticated new ways of drumming up money.

In May 2012, the anti-terror squad Detachment 88 captured 11 individuals suspected of hacking into multilevel marketing websites and stealing some 8 billion rupiah ($835,000). The money allegedly was used to finance terrorist activities such as terrorist trainings in Poso, Central Sulawesi and to produce explosive devices used in churches.

Rizki Gunawan and Cahya Fitriyanta, two of 11 alleged terrorist hackers, are currently on trial in West Jakarta District Court, charged under the 2003 Anti-Terrorism Law and the 2010 Anti-Money Laundering Law.

According to Agus, however, the existing laws do not precisely fit the alleged crimes, demonstrating the need for a new legislation.

In particular, he said, the 2010 Anti-Money Laundering Law “does not specifically regulate the terrorism financing system,” he said, adding that a Counter Terrorism Financing Law would close the gap.

The new law will be strictly implemented and applied to anyone who finances terrorism activity, he stressed.

“The person does not have to be a terrorist. Any individual or organisation that supports terrorist activity will be subject to this law,” he said.

Concerns over implementation

Ordinary citizens told Khabar that the government should also work to make the Indonesian public better aware of the dangers.

Taufan Restu Putra, a 32 year-old Jakarta resident, said he appreciates government efforts to protect Indonesian citizens and the Indonesian financial system with this new law, but he expressed some concern about how it would be implemented.

“What if somehow a terrorist asked me for financial support, but he didn’t tell me the truth that the money will be used to finance terrorist activity? Will I also be charged because I am considered to have supported terrorist activity?” he commented.

“I think the government needs to publicize the regulation properly as soon as it is passed – especially in the remote villages and also the mosques. So that anyone who has a good intention to give to a charity will not be manipulated by terrorists to gain financial support,” he said.

Indonesia puts alleged terrorist hacker on trial

Khabar Southeast Asia

Indonesia puts alleged terrorist hacker on trial

Alleged hacker Cahya Fitriyanta listens as his indictment is read out at West Jakarta District Court on October 8th. Prosecutors have accused him of premeditated murder, money laundering and electronic-system hacking. [Elisabeth Oktofani/Khabar]

The case is significant as Indonesia works to “connect the dots” on terrorism funding.

The trial of alleged hacker Cahya Fitriyanta currently under way in Jakarta represents the first time a suspect accused of stealing money online to finance terrorism has been prosecuted in Indonesia.

Prosecutors are seeking the death penalty for the 26-year-old cell phone technician, who has been charged with premeditated murder, money laundering and hacking an electronic system. His trial opened at West Jakarta District Court on October 8th.

According to the indictment obtained by Khabar Southeast Asia, Santoso, the leader of the Qoid Asykari Jamaah Ansharut Tauhid (JAT) Poso branch, ordered Cahya and Rizki Gunawan, another alleged hacker, to collect money to finance military trainings, weapons purchases and the support of terrorists’ wives.

Together they stole a total of Rp 960.3m ($100,200) by hacking an online investment website from July to November 2011.

Prosecutor Bambang Haryadi, who has handled many terrorism cases, told Khabar that Cahya’s case is the first connected with online terrorism financing to go on trial. But it will be a challenge for prosecutors to present all the necessary evidence, especially regarding fund movements and bank transactions, he said.

“Up to now, we already had hardware evidence such as the computer processor unit for money laundering and also electronic-system hacking charges,” he said. “We also need to present the funds movement and bank transactions. Therefore, we have to ask the Financial Transaction Reports and Analysis Centre (PPATK) to provide us the transaction analysis for the evidence.

“It will take some time. However, we will try our best with the evidence that we have obtained.”

Noor Huda Ismail, a terrorism expert and founder of the Institute for International Peacebuilding, told Khabar that the legal system has not been able to connect all the dots on terrorism funding.

“One of the challenges for the Indonesian courts is to prove these circumstances. Since the 2002 Bali bombing, the court has not found any evidence, such as bank transfer receipts, to prove where the funding came from,” he said.

Cahya is being prosecuted under the 2010 Anti-Money Laundering Law because Indonesia does not have a law that specifically regulates terrorism financing, he said.

“Unfortunately we do not have specific regulation for terrorism financing. But the government is now working on the anti-terrorism financing law. The draft has been submitted to the House of Representatives (DPR).”

Between July and September 2011, Cahya and Rizki hacked, an online investment website, and stole approximately Rp 500m ($52,200). Cahya again hacked the site and stole another Rp 460,286,000 ($48,000) between September and November of last year.

According to the indictment, Cahya provided up to Rp 10m ($1,050) in financial support to the wives of terrorists in Bima, West Nusa Tenggara, through Jipo, a terrorist suspect who is at large. Cahya also gave up to Rp 150m ($15,650) for jihad preparation, also through Jipo.

Rizki gave financial support up to Rp 220m ($23,000) for jihadists in Poso and Rp 250,000 ($25) for operational funding of the church bombing in Solo in September 2011.

Cahya and Rizki attended military-style training in Poso and Malino, both in Sulawesi, for nine days in the second quarter of 2011, along with 20 other people from Java, Kalimantan, Sulawesi and West Nusa Tenggara province, the indictment said.

During the session, they got physical training, assembled homemade bombs, shot guns and practiced archery and basic military tactics.

The purpose of the training was to prepare for Jihad Fisabililah, or violent attacks on nonbelievers, including Christians in Poso and the Indonesian government, because it has not implemented Sharia Law.