Terrorism Financing (Senegal)-Dec 18 08 - Pa - centif.sn · • Financing of terrorism typologies...

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The Forum on Anti Terrorism and Its FinancingThe Forum on Anti Terrorism and Its Financing1818––19 December 200819 December 2008

DakarDakar-- SenegalSenegal

Presented by :Presented by :

Panji Achmad, SH, LL.MPanji Achmad, SH, LL.MGroup Head of AnalystsGroup Head of Analysts

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PRESENTATION OUTLINE

• Introduction

• Why focus on financing of terrorism ?

• Legal basis of CFT: Indonesian Perspectives

• Indonesia’s AML & CFT schema

• The role of FIU (PPATK) in CFT and the obstacles

• The role of Banks in CFT and the obstacles

• Financing of terrorism typologies

• Strategy for combating financing of terrorism

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Population: 240Population: 240 miomio87%87% moslemsmoslems (200(200 miomio))

17.500 islands17.500 islands++ 22 miomio km2km2

2.770 x Singapore2.770 x Singapore

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BALI BOMBING I (2002)Victims: 202 killed (164 foreigners), 209 injured

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JW MARRIOT BOMBING (2003)Victims: 12 killed, 150 injured

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AUSTRALIAN EMBASSY BOMBING (2004)Victims: 11 killed, 140 injured

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BALI BOMBING II (2005)Victims: 23 killed, 129 injured

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BALI BOMBING II (2005)

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3 Bombers of Bali Bombing I

Final verdict: Death penalty executed by Firing Squad 09

Nov 08

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How to approach and fight againstTerrorism Financing?

An Indonesian approach…..

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New Approach

Follow the money ? Follow the suspect ?

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Follow the money approach

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WHY FOLLOW THE MONEY TRAIL ?

Benefits:• To identify the finances and financiers of crime and

terrorism

• Following the money can lead to the most senior orpowerful people in the terrorist organization

• To proactively detect terrorist and their actions andactivities

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WHAT FINANCIAL INFORMATION MAY TELL YOU

• Location of persons at certain times• Relationship between related parties• Involvement of related people• Who controls the funds• Identification documents, phone number, addresses• The assets held• Travel undertaken by related person

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INDONESIAN FIU (INTRAC/PPATK)

is an independent agency in implementing itsduties and authority for preventing anderadicating the criminal offences of moneylaundering and CFT, responsible directly to thePresident of the Republic of Indonesia.

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Request and receive report fromFinancial Service Provider (PJK)

Request for information concerning thedevelopment of investigation /legalsuit

Auditing the PJK

THE AUTHORITY of PPATKTHE AUTHORITY of PPATK

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II.1. Obligation to report to INTRAC

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Who have to report?

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Reporting Parties & Customs

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How to report to INTRAC ?

1. Manual reports

2. On line reports

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$

FSP

STR&CTR

STR&CTR

CUSTOMS

CBCC

CBCC

manual

manual & on-line

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II.2. Type of Reports to PPATK

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II.2. Type of Reports to PPATK

Suspicious Transaction Reports(STRs)

Cash Transaction Reports (CTRs)

Cross Border Cash CarryingReports (CBRs)

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(STRs)

a.deviating from the profile, characteristics or theusual transaction patterns of the customerconcerned;

b.by customers that can be reasonably suspected tobe conducted for the purpose of avoidingreporting of the transactions; or

c.whether or not completed using assets that arereasonably suspected to constitute the proceedsof crime.

Suspicious Financial Transactions shall be financialtransactions:

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CASH TRANSACTION REPORTs (CTRs)

Cash Financial Transactions shall be withdrawals,deposits or entrustments on a cash basis or usingother monetary instruments, utilizing Providers ofFinancial Services, to a cumulative total ofRp.500,000,000.00 (five hundred million rupiah) ormore or an equivalent amount in anotherCurrency (approx.USD55,000), made either in onetransaction or in several transactions within 1 (one)business day.

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CROSS BORDER CASH CARRYING REPORTs (CBCCRs)

• Any person taking cash into or out of the territory ofthe Republic of Indonesia in the amount of Rp 100million or more, or the equivalent in anothercurrency (approx.USD10,000), must report to theDirectorate General of Customs and Excise.

• The Directorate General of Customs and Excise mustreport the information received within 5 (five) daysto the PPATK/INTRAC.

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Data contained on Reports received

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THE ROLE OF BANKS IN CFT

To implement the KYC Principles

To do building capacity (training)

To oblige to report STRs and CTRs to the PPATK

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THE OBSTACLES FACED BY BANKS

The difficulties in detecting any financial transactionrelated to FT

- Small amount of money

- The transactions are in line with the customerprofile

With regard to FT, most of banks reports is based on theFIU (PPATK)/ the Police inquiry

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ANALYSIS PROCESS CONDUCTED BY PPATK

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A Process to Analyse STRs

FIU

FSP

DATABASE

VISUAL LINK

TRACES

INQUIRY FSP

Regulator

ANALYSES

FIU- LNYES NO

AGO/POLICE

KPK

PPNS

COURT

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ANALISYS TOOLS

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Current Approach

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THE PPATK’S ANALYSIS REPORT RELATED TO TERRORISMAs of 31 October 2008

612TOTAL:

25Can not be identified

5Smuggling

5Illegal Logging

1Theft

4Currency Counterfeiting

1Child Pornography

11Narcotics

15Bribery

5Gambling

7Tax Evasion

6 (1%)Terrorism

21False Document

29Banking Fraud

10Fraud Attempting

201Fraud

266Corruption

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THE PPATK’S ANALYSIS REPORT RELATED TO TERRORISM

43%

33%

2%

5%

1%4%

1%1%

2%

0%

0%

2%1%

1%1%

3%

Corruption

Fraud

Fraud Attempting

Banking Fraud

False Document

Terrorism

Tax Evasion

Gambling

Bribery

Narcotics

Child Pornography

Currency Counterfeiting

Theft

Illegal Logging

Smuggling

Can not be identif ied

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Port *) 7

Total Report 2764

Batam 1490

Jakarta 1127

Bandung 1

Tanjung Balai Karimun 95

Denpasar 43

Dumai 1

Medan 7

*) Batam, Cengkareng Airport, Bandung PostOffice, Tanjung Balai Karimun Harbor,Denpasar Airport, Dumai & Medan

CROSS BORDER CASH CARRYING (CBCC) REPORTsAs of 30 Oktober 2008

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How to trace?How to trace?

-- Depends on method of payments to be used;Depends on method of payments to be used;-- Need work together and coordination with PSONeed work together and coordination with PSO

Tracing Financial Transaction

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INDONESIAN PAYMENT SYSTEM

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Methods of Payments

Depend on payment system used by reported party:• Cash paper money & coins…(-)• Non Cash (IDR)

• Through ACH• Through Funds Transfer System/RTGS• Others

• Paper based (TC,)• Card Based (KK, ATM, Debit Card, SVC)

• Transfer through other channel outside banking system(money remittances)

Payment system operators (PSO) and members mayPayment system operators (PSO) and members mayreport and provide information to INTRACreport and provide information to INTRAC

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Operators & Instruments

Conducting cross check to reporting parties and others:Operators of Payment System in Indonesia- Funds Transfer

• Operated by CB• Operated by Bank Internal (intra bank)/ External (inter bank)• Operated by Non Bank Money Remittance Non Bank

• Payment Instruments• Paper based

• Issued by bank TC,• Issued by non Bank TC

• Card based• Issued by bank (ATM, CC, DC, SVC, EM)• Issued by non bank (CC, SVC, EM)• E-Money/ SVC/Prepaid Card Bank & Non Bank

• Money Remittances• Operated by Bank• Operated by non bank (WU, MG)

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CLEARING SYSTEMCLEARING SYSTEM

Bank B Data

Bank C, Data

Bank D Data

Operator

Bank A Data

• Exchange of payment instruments issued bycommercial banks

• Settlement will be conducted by central bank bydebiting or crediting bank’s account at theoperator of clearing Data

Cek/BGBank A

Transfer toBank C

Transfer toBank C

Cek/BGBank D Transfer ke

Bank B

Transfer toBank C

Cek/BGBank A

Transfer toBank B

Transfer toBank D

Cek/BGBank C

Transfer toBank A

Transfer toBank B

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EFT OPERATOR

Receiving B DataST

Sending BankData ST

Central System of RTGSRCC (Operator)

Data ….

Bank sends a fundtransfer instrumentfor benefit of areceiving bankthrough RT data…

Receivingconfirmationfrom RCCdata…

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MoneyGramTransaction Centre– Denver (Data ST)

SendAgent

ReceiveAgent

Sender Receiver

MoneyGramSystem

MoneyGramSystem

Sender advises Receiver of MoneyGram referencenumber

Transfer through Remittances

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E-Money Scheme

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New Approach to be more successful

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FUNDING of TERRORIST GROUPS

Sources of funding :Sources of funding :

Proceed of illegal activity : Kidnap for ransom, robbery,counterfeit goods, narcotics trafficking or front companies

Barter/trading, eg. food for arms

Proceeds derived from legitimate business activity set upby terrorist group

Donations from charities/NPO/NGO’s

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STRs RELATED TO CFT

PPATK has received > 39 STRs from FinancialService Providers related to terrorism (as of 30September 2008)

6 of result STRs related to terrorism financinghas been transferred to Police HQ

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Future Threats

Various transactions:• through non banking system (hawalah)• through internet basis;• by using paperless instruments;• by using negotiable instruments:• by using e-money.

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THE OBSTACLES FACED BY PPATK

- The using of cash transactions difficult to tracethe flow of money;

- Fake ID .

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Conclusion

The FIU has played an important role in the context ofCombating Financing of Terrorism.

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THANK YOU

Merci Beaucoup

TERIMA KASIH