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Cablegate: New Indonesian Ncb Asset Forfeiture Bill Drafted

VZCZCXRO9884
OO RUEHDT RUEHPB
DE RUEHJA #1899/01 3210459
ZNR UUUUU ZZH
O 170459Z NOV 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3845
INFO RUEAWJB/DEPT OF JUSTICE WASHDC PRIORITY
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC
RUEHGP/AMEMBASSY SINGAPORE 6645

UNCLAS SECTION 01 OF 02 JAKARTA 001899

SENSITIVE
SIPDIS

DEPT FOR EAP, EAP/MTS, EAP/RSP, INR/EAP, S/CT FOR MAHANTY, INL FOR
CARLON/BLOOMQUIST
DOJ FOR AAG SWARTZ, OPDAT FOR ALEXANDRE/BERMAN/HAKIM
NCTC
NSC FOR J.BADER, D.WALTON
KUALA LUMPUR FOR G.CHAPMAN
TREASURY FOR IA, TFFC, OIA AND FINCEN
SINGAPORE FOR S.BLEIWEIS

E.O. 12958: N/A
TAGS: PGOV PREL PTER KCRM KJUS KTFN SNAR PHUM ASEC ID

SUBJECT: NEW INDONESIAN NCB ASSET FORFEITURE BILL DRAFTED

1. (SBU) SUMMARY: On November 5 and 6, 2009, a multi-agency
Indonesian drafting team, working with DOJ's OPDAT, put the
finishing touches on a non-conviction based (NCB) asset forfeiture
law. The draft bill addresses a series of issues ranging from the
appropriate burden of proof, to the need to protect claimants and
innocent third parties, to the preservation, management and use of
seized assets. While the legislation requires further work, the
head of PPATK, Indonesia's FIU, stated that the legislation will be
completed in time to be placed upon the 2009-2010 parliamentary
agenda. If passed by parliament, this statute could provide
Indonesia with an effective remedy to pursue stolen assets in those
situations where criminal charges are not possible. The draft
legislation that emerged from the workshop was another tangible
benefit of INL justice assistance in Indonesia. End Summary.

NON-CONVICTION BASED ASSET FORFEITURE
-------------------------------------
2. (U) Indonesia possesses statutory authority to forfeit assets in
certain criminal cases, but lacks a comprehensive, non-conviction
based (NCB) asset forfeiture statute. Such a statute is a powerful
tool which permits the recovery of stolen assets and assets used to
facilitate criminal activities where it is impossible or impractical
to bring criminal charges against the perpetrator. These situations
arise, for example, where a criminal defendant flees or dies before
trial, where a crime has been committed but there are problems with
evidence or proof at trial, or where immunity from prosecution or a
lack of political will precludes criminal prosecution. NCB asset
forfeiture has proven to be such a useful tool to recover assets
stolen through corruption that the United Nations Convention against
Corruption (UNCAC) urges countries to implement NCB asset forfeiture
legislation.

3. (U) Over the course of the past year, an inter-agency drafting
team consisting of representatives of Indonesia's FIU (the PPATK),
the Attorney General's Office, the Ministry of Law and Human Rights,
the Ministry of Finance, and the Corruption Eradication Commission
(the KPK) met and worked upon a non-conviction based asset
forfeiture law, and members of the drafting team visited the United
States to meet with DOJ experts. In August 2009, the drafting team
produced an initial draft of the NCB law. PPATK head, Pak Yunus
Husein, requested that the Department of Justice review the draft
law and specifically inquired whether Linda Samuel could come to
Jakarta to lead a final drafting session before the legislation was
submitted to parliament.

4. (U) AFMLS Deputy Chief Linda Samuel has significant domestic and
international forfeiture experience. She is coauthor of "Stolen
Asset Recovery, A Good Practice Guide for Non-Conviction Based Asset
Forfeiture", the bible for nations implementing a NCB law. She has
also worked closely with the United Nations and World Bank on the
Stolen Asset Recovery (StAR) initiative which works to develop the
capacity of nations to use asset forfeiture to recover stolen
assets. She has worked with the Government of Indonesia in the past
on both money laundering and asset forfeiture issues

HUMAN RIGHTS CONCERNS
---------------------
5. (U) On November 5 and 6, 2009, the drafting team worked through
85 paragraphs of draft legislation, sentence by sentence. Embassy
RLA, FBI and US Treasury participated in the drafting session. While
no member of the drafting team was opposed to the legislation per
se, several expressed qualms about the legality of seizing assets
from an individual who was not convicted of a crime, even if the
forfeited assets were patently the proceeds of crime. One
interlocutor asserted that civil forfeiture constituted double
jeopardy, and another worried that a substitute assets provision
(which permits the seizure of a perpetrator's legitimate assets to
substitute for dissipated or concealed criminal assets) was unfair.


6. (U) Samuel and Embassy RLA addressed each of these points to the
apparent satisfaction of the drafting team, noting initially that no
one possesses rights to illegally acquired property, even in the
absence of a criminal conviction. The inability of the government
to prosecute a defendant for reasons beyond its control does not
mean that the defendant should keep stolen assets. The lack of a

JAKARTA 00001899 002 OF 002


criminal conviction does not impose legitimacy upon otherwise
illegally acquired property.

7. (U) Samuel noted that double jeopardy concerns do not apply to
NCB asset forfeiture. Double jeopardy prohibits an individual from
being twice prosecuted for the same offense. NCB forfeiture actions
are brought against the stolen property, not against the person.
Indeed, the reason why a NCB asset forfeiture case is being pursued
is because the person has escaped prosecution. A substitute asset
forfeiture provision simply substitutes legitimately acquired assets
for stolen assets which the defendant has dissipated or deliberately
placed beyond the reach of law enforcement. The absence of such a
provision creates a loophole that would destroy the utility of NCB
asset forfeiture by permitting a perpetrator to use or conceal
stolen assets while keeping legitimate assets. Embassy RLA pointed
out that a number of European Courts, the European Court of Human
Rights, and Courts in the United States and Canada have all upheld
NCB legislation against these and other human rights challenges.

8. (U) Both Samuel and RLA recognized, nonetheless, that there are
significant human rights considerations engendered by NCB asset
forfeiture. It is critical that claimants of seized property are
afforded a meaningful and timely opportunity to challenge the
seizure and forfeiture of property, and the rights of innocent
owners and third parties needed to be respected. Both Samuel and
RLA criticized the draft statute because it fails to clearly
articulate a list of possible defenses to NCB forfeiture and
stressed the vital importance of ensuring that claimants have a
mechanism to easily challenge a seizure.

SEIZED ASSET MANAGEMENT
-----------------------
9. (U) A transparent, fair and effective system to handle the
seizure, maintenance and disposal of seized property is critical to
maintain public acceptance and support of NCB asset forfeiture. To
assist the drafting team on how to address asset management, Samuel
recommended a Best Practices Asset Management Guide prepared under
the auspices of the G-8, which addressed many of the issues under
consideration by the drafting team. She also advised that the
United States had funded asset forfeiture asset management software
which could be used by Indonesia. The RLA advised that OPDAT is
prepared to supply further technical assistance on these issues to
the Ministry of Finance.

----------
ROAD AHEAD
----------
10. (SBU) The conference was useful but a number of issues still
remain to be addressed and resolved by the drafting team before the
legislation can be sent to parliament. Of particular concern is
whether the drafting team will remove or reduce the minimum
statutory amount for asset forfeiture, and what burden of proof will
govern cases brought under the new statute. It will be especially
critical to ensure that neutral and transparent procedures are in
place before assets are seized and forfeited lest the NCB statute be
viewed as a tool of a corrupt government.

HUME

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