Financing of Terrorism Set to Face Scrutiny

The House of Representatives has begun deliberating on a bill that will regulate detection and monitoring of suspicious funds in the latest move to eradicate terrorism and radical ideologies. 

The bill is part of a comprehensive de-radicalization and antiterrorism plan, announced on Monday, that is being prepared by a team of 24 government agencies led by Vice President Boediono. 

The coordination team expects to complete a master plan for anti-terror and de-radicalization programs before the end of the year, but a legal umbrella is needed to enforce implementation of the programs. 

The National Agency for the Eradication of Terrorism (BNPT) and the office of the coordinating minister for political, legal and security affairs have submitted a draft law to parliament intended to be deliberated and passed into law in time for implementation of the anti-terror master plan in early 2013. 

Terrorism analyst Wawan Purwanto said on Tuesday that terrorism and radical ideologies persisted because violent acts were supported by hefty amounts of funding from several sources. 

BNPT chairman Ansyaad Mbai said that during May alone his officials captured 11 suspects who hacked multilevel marketing websites and stole at least Rp 8 billion ($835,000). This money was used to finance terrorist training in Poso, Central Sulawesi, and produce explosives that were used in churches. 

Wawan said online hacking was one of the many funding techniques used by terrorists. Others included smuggling various products, narcotics trading, posing as mobile phone-card agents and even conducting business activities that resemble corporate social responsibility or welfare activities. The methods allows them to conceal their identities. The funds are channelled to terror cells, which can be difficult to detect. 

Another method used by terrorists is stealing from wealthy targets, especially those considered “infidels” according to the offenders’ beliefs. 

Wawan said the new draft law being debated in parliament was expected to provide clear stipulations on the status and traffic of funds so the authorities may detect terror funding at the earliest stage. 

The terrorism observer said radicalism and terrorism prevailed because many people subscribed to the ideas of terrorists and supported their activities. 

“It is not easy to reverse such people’s belief and value system, so a total re-education is necessary,” Wawan said. 

The House has established a special anti-terrorism committee led by retired Com. Gen. Adang Daradjatun, a former deputy chief of the National Police force who is now a member of the House’s Commission III. 

Agus Santoso, deputy chairman of the Financial Transaction Reports and Analysis Center (PPATK), said the anti-terrorism funding law was urgent and must be issued in time to cope with terror threats. 

But in order to avoid the impression that the government is reinstating dictatorial practices of the past, Adang said the law will protect recipients of fund transfers so police cannot take action against them arbitrarily, but only when proven guilty in court. 

“It is the district court that will decide whether such recipients play a role in terrorism funding,” Adang said.

In spite of the anti-terrorism funding endeavors, analysts said it would be difficult for the government to thoroughly detect the flow of terrorists’ funds because many Indonesians have multiple identity cards, potentially allowing an unidentified terrorist to open accounts in government-controlled banks using fake identities. 

From 2004 to 2009, official records shows there were at least 80 suspicious transactions through dozens of bank branches in Jakarta, Bekasi, Yogyakarta, Solo, Makassar and Poso. 

Existing laws already outlaw some terror financing activity.