THE ROLE OF GATEKEEPERS IN OBSCURING THE LOOTED: PRACTICAL CHALLENGES
JURNAL OPINIO JURIS Vol. 11 No. 01 Mei —Agustus 2012
THE ROLE OF GATEKEEPERS IN OBSCURING THE
LOOTED: PRACTICAL CHALLENGESArinta Luthri Handini
Abstrak
Gatekeeper dapat berperan sebagai pelindung pencuri aset-aset negara, tetapi
juga dapat menjadi hambatan baru bagi proses pengembalian aset yang dilakukan
oleh aparat penegak hukum. Keunggulan mereka adalah tidak saja terbiasa
dengan hukum dan birokrasi yang terkait dengan skema, tapi juga mempunyai
jaringan yang luas dengan orang dan institusi yang berpengaruh dan berkuasa.
Kegiatan mereka didukung dengan teknologi informasi dan komunikasi yang
melewati batas-batas yurisdiksi negara dan bersifat aktual. Oleh karena itu,
pencucian uang menjadi semakin canggih dan professional hingga tidak tampak
illegal. Sedangkan aparat penegak hukum terhambat oleh persoalan yurisdiksi
dalam upaya pengembalian aset dan harus memberikan bukti kuat bahwa aset
Gatekeeper dapat berperan dimaksud merupakan hasil tindakan kriminal.
sebagai pengawas yang membantu para penegak hukum atau sebaliknya
mengutamakan kepentingan klien. Dalam mengemban tugas yang seharusnya
menjadi perpanjangan aparat penegak hukum, perlu adanya pengembangan
integritas para gatekeeper dengan berbagai program dan peraturan.
Kata kunci: gatekeepers, money laundering, Guernsey, jurisdiction,
networking
The Gatekeepers: Whose gate do they keep?
It was in 2002, when the Financial Intelligence Service in Guernsey announced that the money owned by Tommy Soeharto, located in BNP Paribas Guernsey, was suspected as ill-gotten money. It was found out later in 2005 that US$10 million was successfully transmitted to Tommy’s associates’ accounts with the help from his lawyer, via government’s accounts.
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The story of professionals involved in money laundering scheme is well known for decades. Their involvements are no longer a complimentary part in the scheme but a necessity. With all the money involved and the need to conceal the proceeds of crime, the involvement of professionals becomes inevitable. A more precise role of gatekeepers can be found in another cleptocrat story of Marcos, in which the involvement of gatekeepers is vital in en suring that the fruits of Marcos’ crime were safely transferred to overseas accounts.
In Marcos’ case, the professional in the field was a KPMG employee named Marie-Gabrielle Koller. It happened on 23 March 1986, precisely a day before all the banks in S witzerland were ordered to seize Marcos’ assets, when the KPMG moved US$400 million from Credit Suisse Zurich to a trust investment in Liechtenstein called Limag Management und
1 Verwarltungs AG. It is obvious that the KPMG employee presented
more than an ordinary service but also the reassurance that her client’s satisfaction would always be a primary concern in any circumstance. Ensuring client’s satisfaction seems to have become the main goal of gatekeepers.
By definition, gatekeepers are those professionals who are not only accustomed with the law and bureaucracy involved in the scheme, but also well connected with powerful and influential people or institutions. The two aforementioned examples have shown how the professionals can act in a governmental sphere as well as in a private one. Thus, the professionals’ involvement has created a serious threat for the law enforcement agencies to detect and prove any ill-gotten money of public officials or other criminals. Having someone who knows how the systems work and who can provide the assurance of secured protection for the perpetrators’ assets has made the service from the professionals a one- stop service for all criminals.
The involvement of gatekeepers can occur in every stage of money laundering scheme, that is the placement, layering and integration stage. Having the professionals since the early stage is done to ensure that the
1 Lucy Komisar’s Marcos’ Missing Millions, in These Times,
on 10 September
2009.JURNAL OPINIO JURIS PENGEMBALIAN ASET CURIAN
ill-gotten assets are untraceable and yet can still be accessed for the perpetrators’ advantage. The acknowledgement of the excellent performance of the gatekeepers indicates that the law enforcement officers in the field are dealing with a new barrier that hampers the investigation and the asset recovery process.
The Challenges: What they are and where they come from
The existence of gatekeepers is also enhanced by the advanced technology and the globalization that transforms the world until it becomes small enough to be held in your hands. The technology has created a system that enables someone to transfer money within seconds from one continent to another. In the era of globalization, the international trade is no longer a playing field that belongs to certain people, but rather everybody’s playing field, as reflected in the stocks market. The enhanced technology also enables gatekeepers to provide any false identity or hides any personal information that can link the assets to their owners. The ability to camouflage the real owner or controller of the assets has been proven to result in success stories, successfully assisting some of the cleptocrats to hide their assets and live in luxury during their terms and retirements. The advanced technology is also removing all the boundaries and jurisdictions among countries. As mentioned earlier, it will take only seconds to transfer money from one continent to another continent. Similarly, it will take only less than 10 minutes to create a virtual office with bogus transactions in several countries.
The fact that some of the gatekeepers are the fellows of law enforcement officers or people with a strong experience background in the field has made the gatekeepers to be in the same pace or even further ahead from the law enforcement officers and everyone in the system of detections. In the exact practical level, the challenges for the law enforcement agencies in dealing with the gatekeepers are:
The Jurisdictions
Each country has its own jurisdictions to prevent the violation of sovereignty. The jurisdictions are also valid for the law enforcement agencies dealing with the crime. The jurisdictions are there to ensure there
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is no abuse of power or the opportunity of being abusive. With the existence of those jurisdictions, there are some limitations and boundaries in dealing with transnational crimes. In order to overcome those challenges, some countries establish Memorandums of Understanding and the Mutual Legal Assistance Treaties. On the highest ground, some international organizations make some conventions, creating an obligation for the ratifying state party to cooperate and alleviate the boundaries among countries.
Despite of all those efforts, there is an undeniable fact that there is no limitation or jurisdiction in the criminal world. They are protected by mutual understanding and mutual interest, in which money speaks a universal language. The looted assets kept in some tax haven countries and some countries with good bank secrecy have created a new source of income for the countries able to provide those facilities. Since many countries have seen the looted assets as a potential source of income, many countries are developing ways to create easy access for the
cleptocrats to deposit their assets. The gatekeepers are aware of these
circumstances and are taking advantages of them.With that background, in which the red carpet is thrown to welcome the looted assets, what remain are the hands to deliver the assets to walk on the red carpet. The delivery person is the gatekeeper. The role of lawyers who can list their clients under on-shelf companies or shell companies will results in hidden information as to whom the assets belong. The role of accountants or private banking officers will create many untraceable transactions and bogus scheme in order to make everything appear as legitimate transactions. The role of lawyers will also hamper every law enforcement official attempting to trace the looted assets or to repatriate the assets. For example, the lawyers will throw many legal issues and sues to the law enforcement agencies. This may seem only administrative attempt to hamper the process, yet still works as effective as it should be. Each of legal matters must be answered and the law enforcement agencies will be trapped in documents war.
It will be more complicated if the scheme occurs on a transnational basis. Each jurisdiction has its own legal system that may be different with that of the other country. There is a different requirement to be
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fulfilled in every jurisdiction and each jurisdiction will likely present heavy bureaucracy and many legal procedures to be followed.
Ironically, no jurisdiction has been applied between perpetrators and their gatekeepers in looting the assets across countries and continents. Meanwhile, the law enforcement agencies must meet with jurisdictions as one of the boundaries needed to be tackled. In the high technology era and with the spirit of globalization, each of us is becoming a citizen of the world (and no longer attached to one country), while the existence of jurisdiction and its bureaucracy has created a convoluted bureaucracy for law enforcement agencies across the globe.
The Systems
Defined as “a set of things that are connected or that work together”, the systems are intended to organize things in accordance with what they should be. In terms of law enforcement, the systems discussed here are the criminal justice systems applied to enforce the law and also the systems that refer to the laws that regulate the gatekeepers. Therefore, the discussion will be divided into two approaches as follows:
The Internal The internal systems refer to the applied law that regulates the criminal justice system and its pillars, which consist of prosecutor and investigator. In a specific criminal scope on corruption, the investigators are coming from three agencies, namely the Attorney General Office, the Indonesian National Police, and the Indonesian Corruption Eradication Commission. The system applied for those three agencies is based on Law Number 8 Year 1981 on the Codification of the Criminal Procedure Law. As for the Indonesian Corruption Eradication Commission (CEC), it is regulated under Law Number 30 Year 2002, which specifically explains some of its differences with the other law enforcement agencies. Within the CEC Law, it is regulated also that in order to have a case investigated, there is a need to have an initial evidence that consists of at least two evidences as mentioned under the Law Number 8 Year 1981. This is a compulsory approach because the CEC does not have the jurisdiction to halt the case once the case has been promoted to the investigation stage. It
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is a must ensuring that every case already promoted to the investigation must go on until the prosecution. Moreover, the initial evidence that has been used for promoting the case must still have the relevance until the case is tried. The criminal justice system also regulates that asset confiscation can only be done for assets gained from illicit conducts of the convicted parties. In relevance to that, it is compulsory providing the nexus between the proceeds of crime and the predicate crimes that produced them. The investigator and the prosecutor must be able to bring that nexus to be tried and proved beyond reasonable doubt; that the convicted parties have enriched themselves from the criminal offence they are guilty of.
In order to establish the nexus, there are standards of proof, in accordance with the stage of process in identifying, locating and repatriating the assets to the states. The standards of proof are as follows: o
Reasonable grounds for suspect or evidence are necessary to establish the fact which becomes the ground for conducting the tracing measures; o
Probable cause or reasonable grounds are required to produce the freezing order as well as the search and seizure order. In this stage, the procedure can only be taken under the investigation process as regulated by the law that any attempt to enforce the law into someone's private zone is only allowed under the investigation process for all law enforcement agencies; o
Balance of probabilities or predominating evidence becomes the reason for having the confiscation order. The confiscation order itself can also result from the conviction in which someone has been proven guilty beyond a reasonable doubt. As mentioned earlier, all these stages must be met in order to confiscate and repatriate the stolen assets from the criminal charged for the offense.
However, those systems unfortunately create a labyrinth. On one hand, it makes the task of the law enforcement agencies harder because not only they need to prove the case but they also must be able to perform beyond reasonable doubt the nexus of the proceeds of crime and the crime itself. On the other hand, the labyrinth system creates advantages
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for gatekeepers in providing service for their clients. The gatekeepers as mentioned earlier are those familiar with the system and sometimes used by or work for the government. They know the law and they know how to make a safe sanctuary from law enforcement detection and even if the looted assets are detected, the gatekeepers will make them untouchable.
The limitation on the law enforcement to act rapidly and avoid the assets to be moved to other places sometimes has to do with the documents or the necessity to establish early evidence to support the allegation. In other law enforcement agencies, the request to seize the accounts must be reported to the Governor of Central Bank and will be executed after the letter is approved by the Governor. This loop hole has created an opportunity for the gatekeepers to receive insider information and thus enabled them to rescue their clients’ assets.
The systems also create some grey areas in the field. The grey areas consist of some matters that do not say something is forbidden nor have any clear rulings. The dispute and the open interpretation along with various judgments on the matters open wider gate to the gatekeepers. As the people who have experience with the system, the cleptocrats use them as their financial advisors or investment managers. The main goal is how to avoid the system without violating the system itself. It is how the gatekeepers extort the grey areas for their clients’ benefits. The grey areas unfortunately are created by the law enforcement inflexible regulations, insensitive to detect the latest trend in economic crime.
The External The external refers to all circumstances that support the gatekeepers in performing their duties. The circumstances cover the regulation that makes the profession of gatekeepers flourish and the networking power that contributes in the ga tekeepers’ efforts in producing excellent way to loot assets.
The regulations for gatekeepers are meant to make sure that the profession has integrity and clear tasks. It must not be breached as it will injure the credibility of the profession itself. Yet, during the years the regulations have been transformed into a shield for the gatekeepers in looting the assets or hiding their clients’ location. Under the privilege to
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veil their clients’ interests, the gatekeepers have the right not to reveal what they really know about their clients. The regulations are in dual functions related to the gatekeepers’ profession. It is indeed a tool to control and legitimate the profession. In some way, the regulations have created a way to protect the profession from being accused of assisting a crime.
The other external factor is the power of networking within the profession. Peer relation is very strong among gatekeepers. This factor may be supported by the fact that the gatekeepers are indeed a small gang but spread across the globe. There are not many people who have access to all financial institutions and can perform what may appear as legal activities. However, it can be assumed that there must be one in each country. The gatekeepers are exclusive but flourish everywhere. The gatekeepers must have a great network across jurisdictions in order to hide from law enforcement detection and to transmit their clients’ interest to any place in the world. The networking also provides them with the latest information from a certain jurisdiction, which will whether gives benefit or gives adverse situation for the clients.
In contrast with all those aforementioned two factors, the law enforcement agencies are not provided with a strong instrument to interfere with the privilege existing between the gatekeepers and their clients, although the law enforcement agencies have the obligation to obtain information from as many sources as possible.
Furthermore, the external challenge, the networking, also creates more issues for the law enforcement agencies. As mentioned earlier, the law enforcement agencies are limited by jurisdictions among countries. Although there is also a networking cooperation between law enforcement agencies, the cooperation still cannot flex the stiff borderlines of enforcing one country’s law in another country. This is in contrast with the networking gatekeepers have, which are made for flexing all the limits and making it limitless to loot the assets or to hide someone in other countries. The networking of the gatekeepers has also been supported by the era of technology, in which everything is being connected with the internet global network. The real time transmission can send information to the other party immediately after the information has been sent. By
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that, the challenge for the law enforcement agencies are becoming tangible and the agencies are always lagging behind compared with the perpetrators.
The Gatekeepers: Are they a threat or a savior?
The gatekeepers basically are meant to be the extension of the law enforcement agencies. They are meant to make sure people that enter the system, i.e. the financial institution system, are people with a clear background. The assurance that the money that goes into system is non- tainted is a priority concern. Therefore, the presence of gatekeepers becomes critical. Similar with the lawyers who are supposed to make sure their clients are being protected from cunning operations and to give a legal assurance that the transactions are legitimate in order to protect the third party’s interests in public transactions, the gatekeepers are to create security and perform as a watchdog to extend the supervision of the law enforcement agencies. Suspicious transactions are hoped to be reported by the gatekeepers to the authorities, as they are the ones meant to be alert of this since the first suspicious or bogus transaction occurs. They are expected to implement the policy of knowing your customer, which relates to the clients’ background check. However, in order to achieve the ideal role of gatekeepers, gatekeepers must have self-conscience in performing their duties.
Without having any self-conscience, the role of the gatekeepers is transformed into a threat in the attempt of implementing the law on perpetrators. They become the sidekicks of the criminals instead of partners of the law enforcement agencies. The problem is when an enormous capital is involved, the line between integrity and clients’ interest is becoming thinner. The gatekeepers see that money speaks a more universal language compared with loyalty. They tend to abandon the first ideal role of the gatekeepers’, that is to give assistance to the law enforcement agencies and make sure that their profession is not being used by criminals. The value of loyalty is traded with the value offered by clients and customers. It is about ensuring the clients’ interest not to be harmed by everyone, including the law enforcement agencies.
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The dual function of the gatekeepers is worsened by the fact that the control mechanism for this profession is not fully implemented. The lack of integrity within the individuals involved results in bad policy for internal control. The rational reason behind that is that the gatekeepers will avoid more chains in the profession, as long as they can keep fulfilling their clients’ demand. What makes the gatekeepers infinite during the years is the ability to promote the trust of the clients by giving full confidentiality for every transaction or service performed. The reputation of gatekeepers must be maintained and ensuring the same services are still available is also compulsory. The reason why internal control seems weak is purely because they prefer to comfort their clients instead of to be in favor with the law enforcement agencies.
The Conclusions
It cannot be denied that gatekeepers play an important role in financial transactions, especially in securing the systems, although, in terms of practical level, the role of gatekeepers has transformed into a kind of assistance in looting assets into a secured financial system. The gatekeepers have sided to the party who brings more benefits and profits both the individual in the field or the institutions.
Unfortunately, law enforcement agencies seem to have failed to stop or prevent the gatekeepers from bringing the illicit assets into the systems and from having they emerge as legitimate assets of the owners. The law enforcement agencies are not supported by the technology nor any sufficient instrument that enables them to be in the same pace with the gatekeepers or the criminals. The instrument for the law enforcement agencies cannot break through multi-jurisdictions for transnational transactions. On the other hand, the instruments of the gatekeepers, i.e. networking and secured mutual cooperation, always find no limit and it
’s cross-jurisdictional. The challenges are tangible and the solution is becoming salient to be discovered. The cooperation between the law enforcement agencies needs to be in the same level like that of the criminals and the gatekeepers. Also, there should be a development in terms of integrity level for the people who work as gatekeepers. It will take more
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comprehensive plans and programs in setting the priority related to the gatekeeper’s profession; whether it will guard the looting assets or guard the state’s interest.
Act that your principle of action might safely be made a law for the “ whole world. ”
- Immanuel Kant -