Yesterday a friend of mine posted an article about journalists boycott against Starbucks Coffee on his facebook page. The article says that the coffee shop chains is ultimately owned by the infamous Sjamsul Nursalim, one of the Indonesian tycoons who had allegedly embezzled USD 607 million of the state’s money through BLBI scheme. Sjamsul has reportedly resided in Singapore since he was granted a discretion to fly there for “medical treatment” few years ago.
Sjamsul Nursalim is not alone. In 2006, the Indonesia Financial Intelligence Unit (PPATK) reported that as many as 200 financial crime fugitives from Indonesia were residing in Singapore. How much money have these crooks brought into Singapore’s financial systems? Dradjad Wibowo, an economist, came up with an estimate of USD 120 billion.
Interestingly, the Government of Singapore has consistently stated that they do not hide corruptors. Furthermore, the spokesperson of Singapore Corrupt Practices Investigation Bureau said that “In regard to foreign corruption fugitives, as long as sufficient evidence is provided to show that money laundering or any other offence has been committed in Singapore the law enforcement authorities will take swift and necessary action to investigate and/or seize the assets.”
Good. But wait, if that’s the case then why our corruptors keep choosing Singapore as their “safe haven”?
Here is the way I see it.
If “evidence” is what Singaporean Government requires from us, then forget about the investigation, let alone asset seizure or extradition. To provide an evidence, our law enforcement has to conduct an investigation first. And corruption case investigation can take months or even years before it reaches the conclusion. By the time the evidence enters the courtroom, the dirty money would have travelled halfway around the globe.
Good news is, a device called anti-money laundering (AML) has been invented. In AML, evidence is not critical. Rather, we use “suspicion”. Assume you’re a staff of a bank in Singapore. If an Indonesian customer deposits millions of dollar and you’re not convinced about the source of the money you should file a suspicious transaction report (STR) to Suspicious Transactions Reporting Office (STRO). Ideally, STRO will then analyse your report and liaise with the local law enforcement and/or PPATK, their peer in Indonesia. If the report is accurate, the analysis robust and the two financial intelligence talk to each other, an effort to hide proceed of crime in off-shore accounts may have been detected. And if this occurs consistently money launderers would think twice before entering Singapore’s financial system.
If that’s the case, then why is billions of dollars of “grey money” sitting there? Are the suspicious transaction reports from the industry accurate? Or do they report at all? Well, Singaporean Government claims that they have implemented a high standard of anti-money laundering. We should not worry about the industry then. They should have behaved as expected. Besides they’re world class financial institutions. They’re bound to global requirements on AML, which if they do not comply they would be banished from the global financial services community.
Now, let’s put things into perspective. We have hundreds of corruptors and criminals hiding their money in Singapore. Being bound to global AML requirements and regulated by a stringent AML standards, Singapore’s financial institutions have most probably implemented a robust AML system and reported criminals’ financial activities to the regulator. Unfortunately, what the regulator has done with the reports remains a mystery as you’re prohibited from tipping-off suspicious transaction reports.
Nevertheless, one thing for sure, whoever says that “evidence” is a prerequisite so that any foreign government can help us trace corruptors’ money knows nothing about money laundering. In the Singapore case, for example, “evidence” may not be the key word. “Good faith” is.