2022 ECC – IPA Anti – Money Laundering (AML) Seminar Trend and Challenges
Jakarta, 15 June 2022 – Ethics & Compliance Committee (ECC) – Indonesian Petroleum Association (IPA) held a virtual Anti-Money Laundering (AML) Seminar which was attended by 80 participants through Zoom Meetings from various professional background and organizations i.e.: PSC Companies, Vendors and BPMA Aceh. This event is important because ECC – IPA believes that corruption and money laundering are interlink with economic crime. From this event, ECC – IPA expects that Participants will know how to enhance Company Anti – Bribery & Corruption (ABC) Program with AML preventive measures given most of the participants works in High Corruption Risk Country.
The event was opened by Mrs. Marjolijn Wajong as Executive Director of IPA. In her opening, she expects all participants will have better understanding about money laundering risk related to oil and gas industry. Further remarks from Mr. Ronny Siahaan as ECC – IPA Chairman emphasizing that the event was part of the ECC – IPA program to build an integrity culture in the oil and gas industry through authority engagement & stakeholder engagement including best practice & knowledge sharing from the Speakers.
The event continued with the AML survey result conducted by the Committee. Some key results are due diligence has been carried out by Respondent to Vendors (94%), Partners (63%) and Customers (56%). Top three Money Laundering risks are the (1) Procurement Process, (2) the investment process and (3) the Participating Interest. Respondents also revealed that the AML compliance programs that have been implemented by the Company include (1) Due Diligence on Customers, Partners, Vendors, Distributors, Agents and Investors; (2) Establishing the Company's AML Policy, and (3) Socializing and communicating the AML Policy to Customers, Partners, Vendors, Distributors, Agents and Investors.
The next session is presentation from Ms. Zoelda Anderton as Deputy Country Manager of UNODC with theme AML Trends & Challenges. In her presentation, Ms. Zoelda explained that the definition of money laundering is the processing of criminal proceeds to disguise their illegal origin. Criminal conduct their illegal business to generate economic profit. To enjoy the profit, the criminal will seek to legitimize the process of crime such as selling drugs, tax avoidance, human trafficking, hiding financial gain from corruption, and crimes against the environment through money laundering.
In her presentation, Ms Zoelda highlighted high AML risk areas in extractive industry (inc. oil and gas) are excessive permit & licences through government official engagement; multiple commercial contracting companies; procurement process; shipping, transportation, export & import services and potential green tax vulnerability. She explained in summary that corruption & bribery are key predicate crime from AML that can be appeared in the extractive industry. The company needs to understand the nature of industry, business vulnerability from criminal using comingle and mingle illegal proceed by using shell company. It is crucial for every organization to deploy AML risk assessment suitable with the organization scope.
The next session conveyed by Mr. Chalid Heyder as Office Managing Partner of Hogan Lovells DNFP and Mr Teguh Darmawan as Senior Associate of Hogan Lovells DNFP with theme Money Laundering Risk Exposure in Upstream O&G Procurement Process. Mr. Chalid explained that based on the Law No 8 Year 2010, the subject of the law are Corporate and Individual. For Individual, the penalties can be in the form of imprisonment with fine up to IDR 10 Billion. While for the Corporate, so the penalties are financial penalty up IDR 100 Billion including asset freezing, revocation of licenses, dissolve, confiscate Company assets. The Company may held liable if the instruction to commit crime from the Management to benefit the Company. So it is imperative for Companies to have a good compliance management system to protect the Company and to get leniency sentencing when the Company get scrutinized by the Authorities.
The third session is panel discussion with theme Anti-Money Laundering and Its Implication on the Business.
Based on the presentation, the Speakers has mentioned the critical factors to implement the AML risk mitigation in energy sector are to keep abreast of current and emerging trends that happening regionally and globally as well. Criminal do not see the borders, they look for the loopholes in regulation and legislation between countries or jurisdiction in order to progress process their illicit financial flows.
On the Corporate level, the Corporate can enhance the integrity, accountability and transparency principle. In addition, the Tone from the Top is key factor in strengthening ABC & AML program beside socialization & training, whistleblowing system, risk assessment, and due diligence.
Speakers and Participants had active interactions throughout three sessions. The detail event and discussion from each Speakers available as per link below: