The treaty with the Swiss government will not immediately make it easier to recover money deposited by convicted corruptors in that nation. Political will is needed.
THE endeavor to recover funds deposited overseas is easier to talk about in a speech then it is to carry out on the ground. Treaties between governments do not immediately lead to funds flowing home even if they are suspected to be the proceeds of crime. The same will be true after the government of Indonesia signed a Treaty on Mutual Legal Assistance (MLA) with the Swiss government on July 14.
Returning the proceeds of crime is a long process. The experience of Nigeria when tracking down the wealth of former president Sani Abacha deposited overseas after the general died in 1998 is one example. Abacha’s US$458 million of assets were only recovered by the Nigerian government after seven years. And this was with the help of international pressure on tax havens such as Switzerland, which it is claimed have many accounts containing the proceeds of crime.
The implementation of the MLA will not immediately make the Swiss government hand over information about clients or assets deposited in banks there. The Swiss government could refuse requests that they deem not to have met requirements. Conversely, the Indonesian government must prove in a Swiss court that the assets are the proceeds of personal crime. The problem is that often criminals conceal assets. They use names or companies that are completely different, or even have no formal links with them. Without strong and accurate evidence, the courts in Switzerland are bound to refuse requests from the Indonesian government.
Experience shows that the government has repeatedly refused to recover criminal proceedings locked away in bank accounts overseas. One example is the US$5.2 million owned by former Bank Mandiri CEO Eduardus Cornelis William Neloe, who was found guilty of banking offenses. Although Neloe was sentenced to 10 years in jail, the Swiss government revoked the freezing of his assets. Now, five years after Neloe died, his assets have still not been returned to this country.
The illusion of returning the assets of Indonesians overseas to this country started in a speech by President Joko Widodo. In 2016, the President stated that he was in possession of data about companies that had deposited assets overseas. He even mentioned a figure of Rp11 quadrillion. He did not mention if all of this was the proceeds of crime. The endeavor to recover these rupiah took the form of a tax amnesty program. Although this resulted in Rp135 trillion of tax revenues, it was not able to recover funds from overseas.
The government is obliged to track down overseas assets owned by corrupt officials or that are the proceeds of tax evasion. The law enforcement authorities should make a sincere effort to do this, especially on the assets of people who have been found guilty by Indonesian courts. There is no need for the government to spend too much time pursuing assets that are still vague or illusory. What does need to be stepped up are efforts to trace the proceeds of money laundering in Indonesia. So far those efforts have not been too serious. For example, the Attorney General’s Office only seized Rp242 billion from the Rp4.4 trillion of assets owned by the President Suharto’s Supersemar Foundation that was found guilty of embezzling scholarship funds. The same is true for the assets of a number of people convicted of white collar crimes.
It will only be possible to persuade people to bring their savings back to Indonesia—especially those are not the result of criminal acts—if there are improvements to the investment climate. The most important of these is improvements to the system of preventing and eradicating corruption. With a low level of corruption, those with capital will gradually feel comfortable with depositing their funds in this country. Unfortunately, we are moving in the opposite direction.