Indonesia urges Singapore to impose expiration date on $10,000 notes

JAKARTA - An Indonesian financial watchdog has urged Singapore to withdraw all S$10,000 banknotes following its pledge to discontinue printing the note.

Agus Santoso, the deputy chairman of the Financial Transaction Reports and Analysis Centre, said on Sunday that the stoppage in printing would help Indonesia curb rampant corruption and money-laundering activities, but that withdrawing or imposing an expiration date on the banknotes would be more effective.

Starting on Oct 1 this year, Singapore will stop issuing S$10,000 notes. However, those S$10,000 notes already in circulation will remain legal tender indefinitely.

"If the notes remained on the market, let's say for five or 10 years after their production stopped, Indonesia would still be vulnerable to money-laundering and graft," Mr Agus said.

He added that for criminals, high-value notes came in handy because they were easier to carry in large quantities.

"The S$10,000 banknote, which is not widely used in Singapore on a daily basis as legal tender, is the bill of choice for bribe-payers or graft suspects because they can exchange a large amount of rupiah for just a few banknotes," Mr Agus said.

The most valuable banknote in Indonesia is worth 100,000 rupiah (S$10.50), while a S$10,000 note is worth 95 million rupiah.

In Indonesian rupiah, a 3 billion rupiah bribe is equal to 30,000 banknotes of 100,000 rupiah each, while such a bribe in Singapore dollars would require just 31 S$10,000 notes.

In almost every arrest of graft suspects, the Corruption Eradication Commission (KPK) has seized S$10,000 banknotes.

"In addition to its lightness, the value of the banknote is also stable," Bambang Widjojanto, the KPK's deputy chairman, said.

In the recent arrest of Papua's Biak Numfor Regent Yesaya Sombuk, who was apprehended at a hotel in Jakarta on June 17 after allegedly accepting S$100,000 in bribes from a businessman, the KPK found six notes of S$10,000 each.

Singapore will continue to print the S$1,000 note, which is one of the world's most valuable banknotes.

By comparison, the highest-value denomination in the United States is US$100 (about S$125).