he Financial Transaction Reports and Analysis Center (PPATK) published the Indonesia Risk Assessment for Money Laundering Crimes 2021, which listed several new and emerging threats in money laundering as potential schemes that could develop into means of massive money laundering. One of these is criminal syndicates using bank accounts in someone else’s name.
We were recently surprised by a massive scheme that involved thousands of bank accounts in online gambling. It was reported that the Financial Services Authority (OJK) blocked 6,056 of these accounts. As a significant part of the financial ecosystem, banks were caught in the middle of this money laundering scandal, not only in relation to online gambling but also other criminal proceeds; and not just in Indonesia but also in other countries.
For instance, the media reported in June the involvement of dozens of financial institutions in Singapore’s largest scandal of online gambling-related money laundering. In mid-June, the Swiss Financial Market Supervisory Authority revealed that an international bank had seriously violated that country’s financial market law by breaching its obligations to prevent money laundering in connection with two politically exposed persons. Authorities in the two countries are reportedly imposing severe sanctions on the banks involved.
The two separate incidents involved different banking institutions in the same crime: money laundering.
In addition to facing severe sanctions from authorities, banks’ involvement in money laundering incidents could also severely damage their reputation. Without proper handling, such cases could even undermine public trust in financial institutions as a whole.
Aside from these cases in Singapore and Switzerland, various court rulings show that money laundering is also prevalent in Indonesia.
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We might be wondering, if the scheme of using someone else’s bank account to launder money was detected years ago, how can online gambling syndicates still exploit it? It is therefore important to delve deeper into the phenomenon and examine the existing regulations.