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Indonesia: Extradition and Mutual Legal Assistance: The mechanisms used by Asian Countries to Cooperate in White-Collar Crime matters

Written by: Yohanes Partogi Napitupulu

Faculty of Law, Universitas Indonesia

I.Introduction

The phrase “white-collar crime” was coined in 1939 during a speech given by Edwin Sutherland to the American Sociological Society, as he defined the term as “crime committed by a person of respectability and high social status in the course of his occupation.”[1] Although there has been some debate as to what qualifies as a white-collar crime, the term today generally encompasses a variety of nonviolent crimes usually committed in commercial situations for financial gain. Many white-collar crimes are especially difficult to prosecute because the perpetrators use sophisticated means to conceal their activities through a series of complex transactions.[2] The most common white-collar offenses include, inter alia, antitrust violations, computer and internet fraud, credit card fraud, government fraud, tax evasion, insider trading, kickbacks, public corruption, money laundering, embezzlement, and economic espionage.[3]

White-collar crime in Asia, like many other crimes, has taken on an international dimension in recent years. It is now common for corrupt public officials to hide or launder bribes or embezzled funds in foreign jurisdictions, or for them to seek safe haven in a foreign country. Bribers may keep secret slush funds in bank accounts abroad, or they may launder the proceeds of corruption internationally. Bribery of foreign public officials has also become a widespread phenomenon in international business transactions, including trade and investment, as well as humanitarian aid. Consequently, Asia countries increasingly recognize the need for international cooperation to fight and repress corruption more effectively.

Any discussion of extraterritorial law enforcement operations and white collar criminality must begin with an explanation of the concept of sovereignty and the principle of non-intervention. It has been noted that: sovereignty and non-intervention are two of the principles that provide order in an anarchic world system.”[4] These two principles are interrelated in that sovereignty implies the legal and de facto control by a government over a defined territory, whereas “nonintervention” implies a prohibition against that undermine sovereignty. The ideas are irrevocably intertwined as the latter implies the inviolability of the former. As an elucidation of these principles demonstrates, each is central to an understanding of the legality of extraterritorial law enforcement activity.

Extradition and mutual legal assistance in criminal matters (MLA) are two essential forms of such international cooperation. Extradition is the surrender by one state, at the request of another, of a person who is accused of or has been sentenced for a crime committed within the jurisdiction of the requesting state. MLA is a formal process to obtain and provide assistance in gathering evidence for use in criminal cases, transfer criminal proceedings to another State or execute foreign criminal sentences. In some instances, MLA can also be used to recover proceeds of corruption. Both extradition and MLA are indispensable means of international cooperation in criminal law enforcement. [5]

II. The Legal Basis for Extradition and MLA

Asia countries may seek or provide extradition and MLA in corruption cases through different types of arrangements, including bilateral treaties, multilateral treaties, domestic legislation and letters rogatory. A country may rely on one or more of these bases to seek or provide cooperation, depending on the nature of the assistance sought and the country whose assistance is requested.

In recent years, Asia-Pacific countries have increasingly resorted to multilateral treaties in international cooperation. This is likely a response to the cost and time required to negotiate bilateral instruments. The various members of the Initiative are signatories to some multilateral conventions that provide MLA and/or extradition in corruption cases:

United Nations Convention against Corruption

The UNCAC requires States Parties to criminalize (or consider criminalizing) a number of corruption-related offenses, including the bribery of domestic and foreign public officials, and bribery in the private sector. In addition, it provides the legal basis for extradition as follows. First, offenses established in accordance with the Convention are deemed to be included in any existing bilateral extradition treaty between States Parties. States Parties must also include these offenses in any future bilateral extradition treaties that they sign. Second, if a State Party requires a treaty as a precondition to extradition, it may consider the UNCAC as the requisite treaty. Third, if a State Party does not require a treaty as a precondition to extradition, it shall consider the offenses in the UNCAC as extraditable offenses.

The UNCAC also provides a legal basis for MLA. States Parties are obliged to afford one another the widest measure of assistance in investigations, prosecutions and judicial proceedings in relation to the offenses covered by the Convention. If two States Parties are not bound by a relevant MLA treaty or convention, then the UNCAC operates as such a treaty. To deal with these cases, the UNCAC details the conditions and procedure for requesting and rendering assistance. These provisions are comparable to those found in most bilateral treaties.

OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions

The OECD Convention contains provisions on both extradition and MLA. Bribery of foreign public officials is deemed an extradition offense under the laws of the Parties and in extradition treaties between them. As for MLA, a Party is required to provide prompt and effective assistance to other Parties to the fullest extent possible under its laws and relevant treaties and arrangements. A requested Party must inform the requesting Party, without delay, of any additional information or documents needed to support the request for assistance and, where requested, of the status and outcome of the request.

Southeast Asian Mutual Legal Assistance in Criminal Matters Treaty

This Treaty obligates parties to render to one another the widest possible measure of MLA in criminal matters, subject to a requested state‘s domestic laws. The Southeast Asian MLAT provides for many forms of MLA that are commonly found in bilateral treaties, such as the taking of evidence, search and seizure, confiscation of assets etc.

United Nations Convention against Transnational Organized Crime

The UNTOC requires States Parties to criminalize bribery of their officials where the offense is transnational in nature and involves an organized criminal group. As for international cooperation, the UNTOC provides the legal basis for extradition and MLA in relation to offenses established in accordance with the Convention. It does so in the same manner as the UNCAC, i.e., by acting as a treaty between Parties States or by supplementing existing bilateral treaties and arrangements

III. The Case of Extradition Act

Fugitive case flows of Bank Indonesia Liquidity Assistance (BLBI) who escaped to Australia, Adrian Kiki Ariawan, finally successful returned to Indonesia on Wednesday, January 22, 2014.[6] In the process of his return, Adrian picked up from Perth Australia by 9 persons of integrated team of seeker of suspects/convicts and assets of crime. The Integrated team formed by the Coordinating Minister for Politic, Law and Security on January 6, 2014 was composed of elements of INTERPOL Indonesia, Indonesian Police, General Attorney, Ministry of Law and Human Rights, as well Ministry of Politic, Law and Security.

Besides the extradition of Adrian Kiki Ariawan, integrated team also seized the assets from Adrian Kiki Rp 2.7 billion. Adrian Kiki Ariawan also imposed the burden of the compensation of Rp 1.5 trillion, jointly and severally with Bambang Sutrisno, deputy commissioner of Bank Surya who is still fugitive and allegedly be in China. Bambang also sentenced to life imprisonment.

Adrian Kiki Ariawan, President Director of PT Bank Surya and Sutrisno, Deputy Commissioner of PT Bank Surya in the trial in-absentia has been sentenced to life imprisonment by the Central Jakarta District Court on November 13, 2002. Both suspects have been found guilty of corruption (misappropriation of funds BLBI) and defrauding the state of Rp1, 5 trillion. Adrian escaped to Australia since 2002 and has been an Australian citizen with changing his name to Adrian Adamas.

IV. Grounds for Denying Cooperation

Almost all MLA and extradition arrangements in Asia allow a requested state to deny cooperation on certain enumerated grounds. The following are some that could be relevant in white collar crime cases:[7]

Essential and Public Interests

Several jurisdictions in Asia deny cooperation that would prejudice their essential interests. The meaning of essential interests is not always well defined, but may include sovereignty, security and national interests. It could also include the safety of any persons or an excessive burden on the resources of the requested state. International instruments such as the OECD Convention have recognized that the investigation and prosecution of corruption cases can sometimes be affected by considerations of national economic interest. If a requested state includes these factors as part of its essential interests in deciding whether to cooperate with another state, then the effectiveness of extradition and MLA could suffer.[8]

Political Offenses

Asia jurisdictions deny extradition for political offenses or offenses of a political character. Although the concept of political offenses is found in many arrangements, there is no precise definition since the concept is applied on a case-by-case basis.[9]

Double Jeopardy

Many extradition and MLA arrangements in Asia-Pacific refer to the principle of double jeopardy. A requested state will deny cooperation if the person sought has been acquitted or punished for the conduct underlying the extradition request. Under some arrangements, cooperation may also be denied if there are on-going proceedings or investigations in the requested state concerning the same crime.In s[10]ome rare instances, some Asia-Pacific countries may refuse extradition if it has decided not to prosecute the person sought for the conduct underlying an extradition request; a conviction or an acquittal by a court is not required.

Bank Secrecy

Investigations into economic crimes such as corruption will often require banking records as evidence. However, national banking legislation usually contains secrecy provisions that could prevent disclosure of banking records. To ensure that these provisions do not frustrate MLA requests, multilateral instruments may prohibit its signatories from denying MLA on grounds of bank secrecy (e.g., Article 9(3) of the OECD Convention, Article 46(8) of the UNCAC, and Article 3(5) of the Southeast Asian MLAT).[11] Also, none of the members‘ domestic MLA legislation contains such a prohibition, though many of their anti-money laundering legislation do so.

V. Recovery in Criminal Proceedings

It has become increasingly easy to conduct transnational financial transactions. Corrupt officials have taken advantage of this situation by siphoning and hiding the proceeds of their crimes abroad, including bribes and embezzled funds. Asia countries have seen examples in which corrupt officials transferred millions of dollars of proceeds overseas. Bribers may also deposit the proceeds of bribery abroad, such as proceeds from a contract obtained through bribery. The confiscation of proceeds of corruption through MLA has therefore become a focal issue in recent years. An even more complicated question is whether confiscated proceeds should be retained by the requesting state, the requested state or a third party.

The recovery and return of proceeds of corruption generally involves several steps:[12]

  1. Tracing and Identification of Assets
  2. Freezing and Seizure
  3. Confiscation to the Requested State
  4. Repatriation to the Requesting State
  5. Conclusions & Recommendations

Many countries in Asia and the Pacific have taken significant strides in implementing systems for extradition, MLA and recovery of proceeds of corruption. At the international level, there is a sizeable body of bilateral extradition and MLA agreements among countries in the region, as well as between the region and OECD countries outside Asia and the Pacific. Many states have also ratified multilateral treaties – including some that deal exclusively with corruption – that can be used to seek international cooperation in corruption cases. More countries are expected become parties to these instruments in the coming years. In many instances, states may also provide assistance in the absence of an applicable international agreement.

 

 

 

[1] Edwin Hardin Sutherland, White Collar Crime, (New York: Dryden Press, 1949), p.3

[2] “White-Collar Crime: an overview,” Cornell Law School, https://www.law.cornell.edu/wex/white-collar_crime (March 29, 2015)

[3] “White-Collar Crime,” The Lectric Law Library, http://www.lectlaw.com/mjl/cl012.htm (March 29, 2015)

 

[4] INT’L COMM’N ON INTERVENTION & STATE SOVEREIGNTY [ICISS],The Responsibility to Protect: Supplementary Volume To The Report Of The International Commission On Intervention And State Sovereignty 10 (2001

[5] ADB/OECD Anti-Corruption Initiative for Asia and the Pacific , Mutual Legal Assistance, Extradition and Recovery of Proceeds of Corruption in Asia and The Pacific. p.25

[6] “Adrian Kiki Ariawan, fugitive of BLBI Corruptor extradited to Indonesia”. Interpol, http://www.interpol.go.id/en/news/606-adriankiki- ariawan-buron-koruptor-blbi-diekstradisike-indonesia (March 30, 2015)

[7] Bruce Zagaris, International White-Collar Crime: Cases and Materials (Cambridge, Cambridge University Press, 2010) p. 324

[8] Ibid, p. 325

[9] Ibid.

[10] Ibid. Pg 326

[11] Ibid.

[12] ADB/OECD Anti-Corruption Initiative for Asia and the Pacific. Op. Cit, p. 75


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