VZCZCXRO6892
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #3175/01 3191028
ZNR UUUUU ZZH
R 151028Z NOV 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 7070
INFO RUEAWJB/DEPT OF JUSTICE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHKO/AMEMBASSY TOKYO 1121
RUEHBJ/AMEMBASSY BEIJING 4490
RUEHBY/AMEMBASSY CANBERRA 1572
RUEHUL/AMEMBASSY SEOUL 4295
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 003175 
 
SIPDIS 
 
DEPT FOR EAP/MTS, EEB/IFD/OMA, INL BOULDIN 
L/LEI FOR BUCHHOLZ 
SINGAPORE FOR HOROWITZ, BAKER 
DOJ FOR CRIM AAG SWARTZ 
DOJ/OIA FOR WARNER/ROBINSON 
DOJ/OPDAT FOR ALEXANDRE/LEHMANN/JOHNSON 
DOJ/AFMLS FOR SAMUEL 
DEPT PASS USTR FOR WEISEL 
TREASURY FOR IA - BAUKOL 
USAID FOR ANE/AA 
 
SENSITIVE 
SIPDIS 
 
AIDAC 
 
E.O. 12958: N/A 
TAGS: PGOV KMCA KCOR ECON KJUS ID
SUBJECT: INDONESIA - STOLEN ASSET RECOVERY INITIATIVE TO FOCUS ON 
CAPACITY BUILDING 
 
JAKARTA 00003175  001.2 OF 002 
 
 
¶1. (SBU) Summary: The UN-World Bank Stolen Asset Recovery (StAR) 
initiative will make recommendations for a technical assistance 
program in Indonesia.  Indonesia has limited technical capacity and 
uneven political will to recover assets internationally.  Managing 
expectations of StAR is critical as many Indonesians equate this 
initiative with recovering Suharto's ill-gotten assets, which the 
program is not designed to do directly.  End Summary. 
 
StAR Rising? 
------------ 
 
¶2. (SBU) President Yudhoyono and World Bank President Zoellick 
signed a joint communique in September regarding Indonesia's 
participation in the UN-World Bank StAR initiative.  A UN-World Bank 
assessment team is visiting Jakarta November 12-19 to prepare StAR's 
first country strategy, with anticipated release in January.  The 
assessment team will focus their recommendations on a 
one-to-two-year technical assistance program to build the Indonesian 
government's capacity to recover stolen assets which have crossed 
borders.  Indonesian media reports have inaccurately linked StAR 
reporting to recovering Suharto's ill-gotten assets, getting StAR 
off on the wrong foot with public communication.  The assessment 
team understands the political considerations related to going after 
Suharto's assets.  Indeed, it does not seek to identify any specific 
individuals - including Suharto - as targets. 
 
Limited Capacity, Limited Political Will 
---------------------------------------- 
 
¶3. (SBU) The assessment team has identified the limited technical 
capacity in Indonesia for recovering stolen assets, both nationally 
and internationally.  Corruption Eradication Commission (KPK) 
Commissioner Amien Sunaryadi told the assessment team that the KPK 
will set up an office devoted to asset recovery.  The Financial 
Intelligence Unit (PPATK) and Indonesian National Police (INP) have 
also established programs, but little expertise or capacity is 
available for asset recovery. 
 
¶4. (SBU) The assessment team is also reviewing the role of 
legislation in the asset recovery drive.  Some StAR team members 
believe that three laws in the Parliament would boost Indonesian 
government capacity to recover assets: 
 
-- amendments to the anti-money laundering law 
-- a civil asset forfeiture law 
-- ASEAN regional mutual legal assistance treaty 
 
Passing these laws would be a strong sign of political will to 
combat corruption.  Other team members, however, question the 
importance of passing more laws.  A proper legal structure is a 
necessary, but not sufficient condition for improving asset recovery 
capacity.  Given Parliament's own lack of transparency on wealth 
disclosure, external efforts to influence Parliament on asset 
recovery and other anti-corruption reform efforts is sensitive and 
often difficult. 
 
StAR Provides Additional International Resources 
--------------------------------------------- --- 
 
¶5. (SBU) The StAR initiative could be a positive contribution from 
international donors for Indonesian anti-corruption reform.  StAR's 
focus relates directly to the key theme of asset recovery of the 
Second Conference of State Parties for the UN Convention Against 
Corruption, which Indonesia will host in January 2008.  StAR is 
intended to encourage developed countries with major financial 
centers to provide support in asset recovery.  Many Indonesians view 
StAR as an opportunity to leverage more cooperation from Singapore, 
widely viewed as the haven for corrupt Indonesians' ill-gotten 
 
JAKARTA 00003175  002.2 OF 002 
 
 
gains.  However, the StAR team does not seek to target specific 
countries.  It acknowledges that seriously tackling 
Singapore-Indonesia mutual legal assistance and asset recovery 
challenges are beyond its remit. 
 
HUME