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BEWARE OF MONEY LAUNDERING CRIMES IN PEER TO PEER LENDING

At present, information technology is developing very rapidly. The financing sector is not spared from the market affected by the development
of information technology. As the result, we are now familiar with the term fin-tech or peer to peer lending which is a term commonly used to refer to a technology-based online loan extension process.

However, we will not discuss its types and characters here. Instead, this paper will discuss the potential abuse of the system, especially peer to peer lending system, for crimes of money laundering (TPPU).

As we know, TPPU is provided for in Law Number 8 of 2010 concerning Prevention and Eradication of Money Laundering Crimes (“AML Law”). The principal categories of TPPU are set forth in Articles 3, 4, and 5 with the elements which include, among other things, act of placing, transferring, transferring, concealing or disguising the origin of an asset which is known or should reasonably be suspected to be the proceeds of a crime.

The punishments imposed on TPPU in these articles vary from 5 (five) years to 20 (twenty) years with a maximum fine of Rp 10 billion. A question then arises: how can a technology- based loan extension service be abused for money laundering?

Unlike conventional lending process through banks or other financing institutions, the source of funding in the peer to peer lending system is not directly derived from the financing company. The operator is merely an intermediary between the creditor and the debtor so that a legal relation will be formed between the debtor and the creditor without involving the service provider company in the loan extension.

It is understood that the peer to peer lending service company will conduct a debtor’s feasibility survey before extending a loan. However, will the service provider company trace the origins of the fund deposited by the financiers? Moreover, so far, peer to peer lending service companies have not yet entered Bank Indonesia system and have not been under the complete supervision of the Financial Services Authority (OJK) – unlike banks and conventional financing companies that have been included in the systems of Bank Indonesia and the FSA.

To date, the government through the FSA has only introduced one regulation, namely Regulation of the Financial Services Authority Number 77 / PoJK.01 / 2016 concerning Information Technology- Based Money Lending and Borrowing Service (“POJK 77/2016”). However, POJK 77/2016 is far from sufficient to regulate the prevention of TPPU and supervision of sources of funds from investors. The FSA so far only requires service provider companies to submit reports to the FSA.

As the value of transactions in technology-based lending is relatively small, it will not be covered by the surveillance radar of the FSA. In addition, it is not required to be reported to the Financial Transaction Reporting and Analysis Center (PPATK). Therefore, a regulation and system that can better monitor and monitor funding sources in technology-based lending is absolutely needed to minimize the occurrence of money laundering.

-ADP-