Advocates Obligation to Play an Active Role Regarding Support

Eradicate Money Laundering Crimes

Dyah Ersita Yustanti

Universitas 17 Agustus 1945 Jakarta, Indonesia

Keywords: Advocates, Money Laundering.

Abstract: Advocates are a profession that can contribute to preventing money laundering activities from

developing, where based on Government Regulation No. 43 of 2015, advocates are one of the professions

that are required to report in the agenda of eradicating money laundering. The reporting obligation is

accompanied by the provision of protection based on Law Number 8 of 2010. However, the nature of

advocates who are obliged to maintain client confidentiality makes advocates in a difficult position to

report regarding the possibility of money laundering which makes advocates vulnerable to being used as

gatekeepers.

INTRODUCTION

Advocates as people who carry out the profession of

providing legal services to people in court or who

have a license to practice law in courts throughout

Indonesia have an important role in combating money

laundering. Especially since entering the time of

globalization, stamped by the spread of data and data

innovation and open interest in social and political

forms, has entered all viewpoints of human life. The

effect of globalization isn't as it were positive but can

moreover have negative impacts such as moving

control relations, uncommon security courses of

action, and the extending crevice between wealthy

and destitute nations (Sularto RB, 2018,p.127).

One of the biggest issues is transnational money

laundering were without surveillance money

laundering can erode the integrity of a country's

financial institutions. Due to the high integration of

capital markets, money laundering can also affect

currencies and interest rates. Ultimately, laundered

money flows into the global financial system, where

it can damage national economies and currencies.

Fundamentally, According to Government

Regulation No. 43 Year 2015, there are several

professions that have the responsibility to report

suspicious financial transactions to Financial

Transaction Reports and Analysis Center (FTRAC),

which includes the advocate profession.

The obstacles faced by the legal professions such

as advocates which are vulnerable to being used as

gatekeepers by perpetrators of money laundering

crimes to hide or disguise the origin of assets that are

the proceeds of criminal acts by taking refuge behind

the confidentiality provisions of professional

relationships with service users which are regulated

in accordance with statutory provisions.

LITERATUR REVIEW

The theory used in this study includes the theory of

legal effectiveness. Legal effectiveness means that

people actually act in accordance with legal norms as

they should act, that the norms are actually applied

and obeyed (Usman.S,2009,p.12). This is related to

the author's hope that advocates can play an active

role in eradicating money laundering, especially

transnational money laundering which is one of the

issues in the G20.

There are several previous articles that discuss

issues surrounding advocates and their relation to

money laundering, such as the honorarium of

advocates that can be categorized as money

laundering crimes, or regarding the possibility for

advocates to also help with money laundering. This

article is different from the articles that have been

written before because this article is more focused on

highlighting issues related to the Advocate's

obligation to report and its correlation with the

Yustanti, D.

Advocates Obligation to Play an Active Role Regarding Support Eradicate Money Laundering Crimes.

DOI: 10.5220/0011904100003582

In Proceedings of the 3rd International Seminar and Call for Paper (ISCP) UTA â

Z45 Jakarta (ISCP UTA’45 Jakarta 2022), pages 61-64

ISBN: 978-989-758-654-5; ISSN: 2828-853X

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

advocate's obligation to maintain client

confidentiality.

METHODS

This study uses normative juridical research methods.

Normative juridical research is legal literature

research conducted by examining primary and

secondary legal materials using the legislation

approach and legal concept analysis approach, made

by reviewing all laws and regulations relating to legal

issues(Soekanto,2015).

Normative legal research functions to provide

juridical argument when there is gap, obscurity, and

norm conflicts. Furthermore, legal research has the

role of maintaining critical aspects of legal science as

a normative science that is sui generis (Efendy &

Ibrahim, 2018).

RESULTS AND DISCUSSION

4.1 The Responsibility of Advocates as

Whistleblowers to Prevent and

Eradicate Money Laundering

According to Lance Cole A whistleblower (Hall,

2014) is often understood as a reporting witness.

People who provide reports or testimony regarding an

alleged criminal offense to law enforcement officials

in the criminal justice process. However, to be called

a whistleblower, the witness must fulfill at least two

basic criteria. The first criterion is that the

whistleblower submits or discloses the report to the

competent authority or to the mass media or public.

By disclosing to the competent authority or mass

media, it is hoped that allegations of a crime can be

uncovered and exposed. Protection of whistleblowers

is a state obligation as a guarantee of physical and

non-physical safety. So that the whistleblower gets

the flexibility and freedom in providing information

if they find suspicious financial transactions. To

emphasize the guarantee for the whistleblower, it is

legalized in Law Number 8 Year 2010 Chapter IX on

Protection for Whistleblowers and Witnesses. Along

with the existence of Government Regulation

Number 43 of 2015, it is expected to be able to

suppress money laundering crimes so that it requires

Advocates to report, so Advocates are obliged to

carry out their role as reporters. Suspicious Financial

Transactions according to Law Number 8 of 2010

concerning Prevention and Eradication of Money

Laundering Crime and according to Government

Regulation No.43 of 2015 concerning Reporting

Parties in the Prevention and Eradication of Money

Laundering Crime, namely Suspicious Financial

Transactions are:

a. Financial Transactions that deviate from the

profile, characteristics, or habitual pattern of

Transactions of the Service User concerned;

b. Financial Transactions by Service Users that

should be suspected of being carried out with the

aim of avoiding the reporting of the relevant

Transactions that must be carried out by the

Reporting Party in accordance with the provisions

of laws and regulations governing the prevention

and eradication of money laundering criminal

acts;

c. Financial Transactions conducted or canceled

using Assets suspected of originating from the

proceeds of a criminal offense; or

d. Financial Transactions requested by FTRAC to be

reported by the Reporting Party because they

involve Assets suspected of originating from the

proceeds of a criminal offense.

Unlike financial service providers, Advocates

may only report in accordance with Article 8

paragraph (1) of Government Regulation No.43 of

2015 concerning Reporting Parties in the Prevention

and Eradication of Money Laundering Crimes,

namely regarding:

a. Purchase and sale of property;

b. Management of money, securities, and/or other

financial service products;

c. Management of current accounts, savings

accounts, deposit accounts, and/or securities

accounts;

d. Operation and management of the company;

and/or

e. Establishment, purchase, and sale of legal entities

Advocates do have an obligation to apply the

principle of recognizing service users and have an

obligation to report suspicious financial transactions,

but it is limited to the purchase and sale of property,

management of money, securities, and/or other

financial service products, management of current

accounts, savings accounts, deposit accounts, and/or

securities accounts, operation and management of

companies, and/or establishment, purchase, and sale

of legal entities. So advocates do not need to worry,

because there are exceptions when they are ensuring

the legal position of Service Users or handling a case,

arbitration, or alternative dispute resolution.

Basically, advocates as legal subjects can report

suspicious financial transactions to the authorities.

ISCP UTA’45 Jakarta 2022 - International Seminar and Call for Paper Universitas 17 Agustus 1945 Jakarta

4.2 The Obligation of Advocates to

Play an Active Role in Eradicate

Money Laundering Crimes and It’s

Relation to Maintain Client

Confidentiality

Money laundering is a process or action that aims to

hide or disguise the origin of money or assets

obtained from the proceeds of a criminal offense

which is then converted into assets that act as if they

came from legitimate activities (Arifin,2011). In

accordance with Article 2 of Law Number 15 of 2002,

criminal acts that trigger money laundering include

corruption, bribery, smuggling of goods/immigrant

labor, banking, narcotics, psychotropic drugs,

trafficking of budah/women/children/illegal

weapons, kidnapping, terrorism, theft,

embezzlement, and fraud. Based on its normative

perspective, the Law on money laundering is very

effectively implemented. Therefore, all parties must

be able to work together, especially the advocate

profession as a service provider. Based on the report

data from FTRAC research from January 2020 to

December 2020, there were 710 professionals and

consultants registered as reported based on

Suspicious Financial Transaction Reports.

Advocates as a profession have an obligation to

report indications of money laundering to FTRAC,

the urgency is that advocates are expected to be able

to apply the principle of knowing the client (know

your customer) in order to avoid all types of crimes,

one of which is money laundering (Lubis,2020). Law

enforcement for the crime of money laundering or

money laundering is still little revealed in Indonesia.

Although the effect of state losses arising from the act

of money laundering is far greater than the original

crime, such as cases of corruption, narcotics

trafficking, and other illegal business activities that

are growing. The various modes used by the

perpetrators of money laundering crimes start from

using other parties such as lawyers to engineer the

flow of funds from illegal business activities as if it

were a source of halal funds. So that the advocate

profession, which is expected to be a law enforcer, is

actually included in the vortex of this criminal action.

Because the competence of advocates can be misused

to cover up these crimes only for the benefit of clients.

In terms of money laundering, the advocate

profession has a strategic role, either as a perpetrator

or a position utilized by his client or as a reporter. It

is possible that a money laundering crime occurs and

is known by the advocate but does not want to report

it for fear of losing the client.

The potential for advocates to be involved in

money laundering crimes because one of the

professions that can be a proxy for the main

perpetrators of money laundering crimes because

they can manage the flow of funds so that illegal

activities are not indicated. Advocates can take care

of creating new companies so that they are not

suspected. Therefore, advocates who are authorized

to handle corruption cases as well as money

laundering crimes and are indicated to be involved in

this crime are asked to immediately report to FTRAC.

If the advocate argues, then he/she can be penalized

for being involved in this crime. However, advocates

cannot be penalized if they report their clients'

criminal acts.

Basically, if accepting a client is a business and

reports to FTRAC then the advocate needs to get

protection and immunity. In addition, advocates have

the obligation to maintain the confidentiality of each

client's data. Law No.18/2003 on advocates itself has

explicitly regulated client secrecy. However,

according to Article 19 of the Advocates Law, the

confidentiality of client relationships does not apply

when law enforcement agencies request advocates or

their law offices to disclose data related to alleged

money laundering crimes. The advocate law provides

advocates with confidentiality of (client) data.

However, if it is related to money laundering crime,

it does not apply. This is in line with the law on

money laundering no. 8 of 2010 article 45 that:

“In exercising its authority as referred to in this

law, the provisions of laws and regulations and codes

of ethics governing confidentiality shall not apply to

FTRAC.”

For this reason, every advocate and law office

must apply the principle of know your customer

(KYC) or know their client's profile in depth. This is

necessary so that advocates can avoid all forms of

crime including money laundering crimes. Because

during this practice, law offices often ignore the KYC

principle. In order to obtain a fee for services

provided with an unspecified nominal. Advocates do

not care about the source of their client's funds.

However, it returns to the advocate himself because it

is a challenge in implementing his professionalism.

There are various ways to mitigate (prevent) risks

so that advocates avoid involvement in money

laundering. One of them is that advocates must ensure

compliance and discipline in the client screening

process through the specified standards and

requirements. Then, philosophically advocates instill

the thought that the legal profession is not immune to

money laundering crimes and must recognize human

resources and aggressively socialize anti-money

Advocates Obligation to Play an Active Role Regarding Support Eradicate Money Laundering Crimes

laundering principles periodically. In addition to legal

risks, there are reputational and operational risks for

advocates involved in money laundering, namely loss

of reputation and trust from the public.

CONCLUSIONS

Based on the above description, the conclusion of this

article is that Advocates should be able to play an active

role and even have an obligation to report if clients

conduct suspicious financial activities based on

Government Regulation No.43 of 2015, and are

protected if they report in accordance with Law Number

8 Year 2010 Chapter IX on Protection for

Whistleblowers and Witnesses. Along with the existence

of Government Regulation Number 43 of 2015, it is

expected to be able to suppress money laundering crimes

so that it requires Advocates to report. Advocates are

also obliged to be careful in accepting clients so as to

avoid participating in money laundering.

Other than

legal risks, there are reputational and operational risks

for advocates involved in money laundering, namely

loss of reputation and trust from the public.

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Tindak Pidana Pencucian Uang Di

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Metode Penelitian

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Whistleblower Laws in the 21st

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Increased Complexity

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Law.Pennsylvania.

Irman,T. (2017)

Money Laundering

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Utama. Jakarta.

Lubis,L. (2020). Advokat VS Pencucian Uang. Deepublish.

Yogyakarta.

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Penelitian Hukum Normatif (Suatu

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ISCP UTA’45 Jakarta 2022 - International Seminar and Call for Paper Universitas 17 Agustus 1945 Jakarta