ndonesia’s government has proposed a law to parliament to limit cash transactions to curb bribery and money laundering in Southeast Asia’s biggest economy, the head of the country’s anti-money laundering watchdog said.
The draft bill, which limits cash payments to a maximum 100 million rupiah (U.S. $7,260), was assigned as a legislative priority for 2018, said Ki Agus Badaruddin, head of the Financial Transaction Reports and Analysis Centre (PPATK).
“Basically, the assumption is this restriction will reduce the space in which one can commit acts of money laundering and terrorism financing,” Badaruddin said.
No details were given on how such a law could be enforced.
About 85 percent of transactions in Indonesia are in cash and are harder to track than those done through banks or other electronic channels, making it a challenge for the government to fight money laundering, corruption and terrorism financing.
The PPATK detected an increase in bribery with most transactions in cash, Badaruddin told reporters.
PPATK had found more than a thousand suspicious cash transactions that could be related to the upcoming regional elections across Indonesia, versus 53 suspicious transactions done electronically, Tempo.co reported.
Indonesia placed 96th out of 180 countries in Transparency International’s annual Corruption Perceptions Index in 2017, on par with Colombia and Thailand.
Indonesia’s central bank, which was involved in drafting the bill, thinks the proposed limit could improve law enforcement, then-Bank Indonesia Gov. Agus Martowardojo said.
For people in charge of payment systems, “cash transaction is fine, but noncash is more efficient,” Martowardojo said, adding that the plan also supports the bank’s campaign of getting more people to transact electronically. Reuters
