Monitoring The Flow Of Dark Funds Thousands Of Trillion

JAKARTA - In the last 10 years, the value of illegal exports or the difference in recording in export activities has reached US$654.5 billion, commonly known as stealth funds (illicit financial). The stealth funds in Indonesia's export activities to partner countries occurred due to misinvoiting or fraud in recording. In the last 10 years (2014-2023), it is suspected that the value reached US$654.5 billion.

Christiantoko, Executive Director of NEXT Indonesia Center, explained that fraud in export records occurred through two types. First, under-invoiting. In this case, the volume or value of exports recorded in Indonesia is lower than recorded by trading partner countries.

Throughout this decade, the difference in recording was US$401.6 billion or an average of around US$40.2 billion per year. Second, over-invoiting, namely records in Indonesia, is greater than the record of partner countries. In the last decade, the value reached US$252.9 billion or around US$25.3 billion.

The difference in recording exports is the potential for state revenue to be lost. In general, the difference in recording is efforts to avoid taxes and excise, launder money from crimes, and hide profits abroad," said Christiantoko, in Jakarta, Monday. 27 October.

In calculating the flow of stealth funds from exports, he continued, the NEXT Indonesia Center uses methods that apply internationally, namely those issued by the Global Financial Integrity (GFI). The institution is a think tank based in Washington DC, United States which focuses on the flow of illegal funds or stealth funds (illicit financial flows, IFF), corruption, illicit trade and money laundering.

Furthermore, Christiantoko explained, from the investigation of the institution he leads, for under-invoiting exports, the largest value occurred in Indonesia's transactions with China. In the 2014-2023 period, the value reached US$53 billion. In the rupiah exchange rate, which is around Rp.863 trillion or an average of Rp. 86.3 trillion per year (the middle exchange rate of Bank Indonesia as of June 22, 2025, US$1=Rp. 16,283).

The proportion of Indonesia's export transactions with China is around 13.19% of the total under-involving value in the last 10 years which is worth US$401.6 billion or Rp6,539.3 trillion. Meanwhile, the difference in export records to Singapore is in second place with an under-invoiting value of US$46.4 billion. Furthermore, followed by the United States worth US$32.7 billion.

The government must seriously explore the potential for lost income so as to reduce the opportunity to increase tax rates. Moreover, the manipulation of export records is an act of financial crime, "said Christiantoko.

In terms of commodities, the largest under-invoiting records during the 2014-2023 period were waste and screens of precious metals or metals coated with precious metals (HS: 7112), which was worth US$15.4 billion. For example, Christiantoko explained, these commodities are waste residue or products from the processing industry or used goods containing compounds or precious metal layers. This "samb" has the potential to be reprocessed for precious metals, for example gold.

The commodities that recorded the second largest under-invoiting value in the past decade were petroleum (HS: 2710) which reached US$14.9 billion. In third place, namely coal (HS: 2701) with a difference in export recordings worth US$12.8 billion.

As for over pricing cases, the highest value was recorded by Indonesia's export commodities to Singapore, reaching US$24.2 billion in the 2014-2023 period. This means that there is a potential for dark funds to enter Indonesia of around Rp394.2 trillion.

"Maybe the money is currently considered halal, because it can be argued as a flow of funds from trade results. In fact, the export activities while manipulating the invoices," Christiantoko reminded.

There Is Misappropriation In ICT Commodities

The potential for Indonesian export-import misinvoicing for the 2014'2023 period reached more than US$1.3 trillion, especially in the information and communication technology (ICT) sector. Export and import trade for the same commodity is ideally balanced between the country of origin and partner countries. It doesn't have to be the same exactly, but the difference is in the normal range, namely in the range of additional transportation prices and insurance for transacted goods.

The occurrence of difference in recording in exports and imports, because export statistics are often recorded based on the value of the FOB (Free On Board) aka the price in export ports without shipping costs, insurance, or costs after goods on board. Meanwhile, import statistics are usually recorded based on CIF (Cost, Insurance, Freight), which is the cost of goods + shipping + insurance. So, the import value can be much greater than exports.

Throughout the past decade, there has been potential for under-involving of US$2.1 billion or around US$209 million per year. Indonesian authorities recorded export value to Singapore worth US$663 million. On the other hand, Singapore posted imports from Indonesia which are included in the machine commodity group for receipt, conversion, and transmission or sound regeneration, images, or other data, including the diversion and loss equipment, worth US$2.8 billion.

The difference between US$2.1 billion in product trading is much greater than the maximum 20% if recorded based on CIF (Cost, Insurance, Freight), which is the cost of goods + shipping + insurance. Thus, it is very likely that under-invoiting has occurred in the export of commodities HS 851762 from Indonesia to Singapore.

The data on the table above shows the huge potential for over-invoiting in imports of cellular phone products and components of their constituents from China. From imports of the three commodities with the highest value (HS 851770, 851779, and 851713) the value of over-invoiting in the 2015-2024 period reached US$12.2 billion. This means that there is a potential for such a large amount of dark funds to enter Indonesian banking through imports of these products.

Under-involving imports from China appear to occur in products coded HS 851712, namely ordinary cellular phones (cell phones). During the 10 years of importing these commodities, Indonesia has the potential to lose state revenue due to misinvoiting worth US$4.2 billion.

Trading 'Leak' Mode

The difference in statistics or data between export-import trade records, which has been adjusted to logistics and insurance costs, is leakage or misinvoiting in trading (Tandon and Rao, 2017).

The three main categories are the reasons a company is involved in making trade leaks. First, it is an economic motive, avoiding currency value control and authority, both taxes and customs, and minimizing administrative burdens (United Nations Conference on Trade and Development/UNCTAD, 2016).

The economic motive is encouraged to maximize profits by avoiding tariffs and/or taking advantage of subsidies over exports. The second motive is to avoid any control over the currency. In this regard, the existence of distortions over exchange rate control and foreign exchange causes the existence of a black market to be exploited for the company's profits. Furthermore, the third motive that can reflect import smuggling and exports is motivated by the motive to avoid bureaucratic barriers.

Senior researcher of the Prakarsa Association, Setyo Budiantoro, explained that the posture of the flow of illegal funds in Indonesia is dominated by illegal transactions from trade mis-invoicing or engineering the value of goods. "The engineering of the value of these goods is to avoid export and import taxes. This also affects state revenue tax revenues", he said.

To suppress the flow of these dark funds, a number of things need to be done. First, it is necessary to strengthen the transaction reporting system to encourage tax transparency, especially for sectors that are dominated by illegal activities. Second, strengthening tax administration as part of reforming and harmonizing Indonesian tax policies, one of which is in the aspect of ease of tax payments.

The Mahal Sri Mulyani Heritage Application Is Not Fatal

The beliax, abbreviation of the Core Tax Administration System, is a tax administration system implemented by the Directorate General of Taxes (DJP) starting January 1, 2025. This system aims to modernize and integrate the tax core business process into one digital platform. Unfortunately, the quintex system that spent Rp1.3 trillion was considered by Purbaya as made by high-level high school children, aka not good for use.

"We have also called our hackers, who are good at it, this is not a foreigner. Indonesians are really good hackers, I call those who rank the world are heroes, not bad. And they have been tested, that's enough," said Purbaya to reporters, at the Ministry of Finance, Jakarta, Friday, October 24.

To oversee the flow of dark funds from the export-import side, Purbaya plans to optimize the National Single Window (LNSW) Institute of the Ministry of Finance as an information technology-based (IT) intelligence center. LNSW will later act as a more sophisticated export-import control system. Purbaya targets the development of an artificial intelligence (AI)-based system in Customs to be completed in the next three months

"I want to see how sophisticated it is to have Customs and Excise. I can't optimize it to reduce what the President has criticized about under-invoiting," he said.