Government of Indonesia Strengthens Its Commitment in Disclosing Beneficial Ownership Data

As the member of Extractive Industry Transparency Initiative (EITI), Government of Indonesia strengthens its commitment to disclose beneficial ownership (BO) in order to combat corruption, money laundering, tax evasion and terrorist financing, as stated by Bambang Brodjonegoro, Minister of National Development and Planning in his opening remark in the Global Conference on Beneficial Ownership Transparency, last 23-24 October in Jakarta.

This global conference is part of Indonesia’s commitment to fight against corruption as well as promote Automatic Exchange of Information (AEoI), which has been stated in 2016 Anti-Corruption Summit in London.

“Although Indonesia is one of 15 countries with the biggest GDP in the world, our tax ratio is really low, slightly greater than 11 percent. Even being compared to the neighbor countries in ASEAN and OECD member countries, it is still low. One of the reasons is due to the inability in tracing the assets placed outside Indonesia. Thus, it’s important to succeed the BO openness,” said Bambang.

Fredrik Reinfeldt, Chair of EITI International in his opening mark said that the conference is a milestone in global fight against corruption. The Panama leaks become an important achievement in disclosing BO data.

The importance of BO disclosure also being highlighted by Yemi Osinbajo, Vice President of Nigeria in his opening mark. African countries loss USD 50 billion per year due to illicit financial flow caused by anonymous company. The secrecy in this sector favors the corrupt and the criminal. Therefore, revealing the anonymous company is a key to combat illicit financial flow, corruption, money laundering, and terrorist financing.

“It’s not only the problem of developing countries, but in fact it is a global problem which needs collective strategy,” affirmed Yemi.

Spoke as a panelist in the plenary session “Ending Company Anonymity, The Key Fighting Corruption, is Ignasius Jonan, Minister of Energy and Mineral Resources, Indonesia. He said that as country which does not adopt the common law system, Indonesia does not distinguish legal ownership and beneficial ownership. However, so far, Ministry of Energy and Mineral Resources has issued the Ministerial Regulation Number 48 Year 2017 on Monitoring of Business Operation in the Energy and Mineral Resource Sector, which mandates the mining companies to disclose information about their executive, commissioner, and shareholder.

In the other session, Yanuar Nugroho, Representative of the Executive Office of the President, Indonesia said that the implementation of BO transparency in Indonesia will face two challenges. First, how to integrate data in an interchangeable format. This will be the main agenda of this BO initiative. The second is how to verify the disclosed BO data.

“By 20 October 2017, regulation on BO has been signed by 6 related ministers. This regulation is expected to address the challenges in BO implementation,” stated him. Being complemented with the road map of BO transparency, government of Indonesia is highly expected to be able develop BO data soon.

The conference is the first global conference which put BO transparency as focus of discussion. Attending the conference are ministries, representative of business entities, civil society and also scholars from 52 member countries of EITI. [AN]

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