Indonesia’s Role to Strengthen Global Assets Recovery Cooperation

Nowdays, no doubt that corruption is one of the greatest obstacle of economic and social development around the world. As stated by Lord Acton, “power tends to corrupt, absolute power corrupt absolutely”,  corruption does not just steal money from where it is needed the most, it leads to weak governance as well as encourage abuse of power in the government.

Besides causing abuse of power, corruption has also caused huge financial losses to countries where corruptors are suspected of hiding their stolen property in other countries. For example, corruptors in Indonesia are known to keep their corruption in Singapore, Australia, America and Switzerland. Not only the moneu, the property is even protected by bank secrecy rules that are generally applied to developed countries where corrupt assets are kept.

It is very apprehensive and ‘sad’ where corruptors from Indonesia, countries with high corruption rates, their corrupt assets are protected by countries with low corruption rates. This inequality certainly raises the question of whether the borrowed funds of poor and developing countries are derived from corrupt money laundered or stored in the Bank of the rich countries.

Understanding the dangers of corruption and the difficulty of recovering corrupt money, many countries believe that in order to enforce law and good governance, joint effort to eradicate corruption is necessary to punish corruptors and restore state assets. In this regards, it is aclnowledged that country like Indonesia supported the United Nations initiative to establish the United Nations Convention against Corruption (UNCAC) in 2003 (Indonesia through Law No.7 Year 2006 has ratified UNCAC).

Through UNCAC, countries state that corruption is no longer a local problem in a country but can also affect global economy so international cooperation is needed to ‘eradicate it’. Through this convention, countries have opportunities to encourage active and genuine role of developed countries to assist the return of corrupt assets. UNCAC provides an opportunity to facilitate the assets recovery that are hampered by bank secrecy provisions, provided that the countries where the assets are held ratified UNCAC.

However, despite UNCAC, efforts on assets recovery are not easy. The Convention has no binding force as long as it has not been ratified. The data show that many developed countries are the main obstacles in assets recovery by not ratifying the convention on the establishment of UNCAC.

The same problem also occurred when UNCAC launched an initiative called Stolen Asset Recovery (StAR) which was launched on September 17, 2007. The StAR initiative idea is based on the World Bank’s awareness that developing countries need help in returning stolen assets that result from criminal acts. Actually, this initiative is well-regarded to assist developing countries, but it must be understood that this initiative is not a legal instrument that can be directly applied as well as other UN conventions. StAR’s success depends largely on the effective partnerships between developed and developing countries and between bilateral and multilateral agencies concerned. StAR also relates to whether or not a UNCAC is ratified by a country.

As stated by the Indonesian National Law Commission, the StAR initiative is not an easy means by developing countries to recover stolen and stored money at the center-financial centers in developed countries fortified by law, professionalism, technology and politics

The National Law Commission of Indonesia also said that the success of UNCAC and StAR is highly dependent on the participation and compliance of developed countries and developing countries without exception. Without this, the StAR initiative will remain as a discourse, not as the missing link in an effective anti corruption effort and constitute a formidable deterrent to corruption.

Finally, UNCAC has not received by half of the G-8 countries and by the world’s financial centers where stolen money is deposited where stolen money is deposited,

Policy Recommendation

International cooperation on assets recovery becomes an important step to restore corrupt assets and demonstrate Indonesia’s role in global anti-corruption cooperation. Without it and only relying on UNCAC that have not been ratified by most of the G8 countries, it will be very difficult for Indonesia to recover stolen corrupt assets.

Therefore, in order to strengthen global recovery assets cooperation and improve Indonesia’s role and its bargaining position in the global political arena, it may be recommended as follows:

1. Urge the developed countries, through international institutions, to create international cooperation that is more in line with the limited ability of developing countries to access of technology and international politics in order to return stolen assets.

2. Strengthen the institutional function of Anti-Corruption and money laundering in Indonesia by streamlining functions and increasing the authority of PPATK and KPK, for example by giving authority to seize the assets of a person or group even though they are suspected of corruption. Preventive measures are important to prevent the flow of funds or assets abroad.

3. Conducting diplomacy with other developing countries to create a more conducive atmosphere to seek, freeze, confiscate and take over assets from corrupt in the world’s financial centers

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