Financial Crime World

Indonesia Gets Thumbs Up from APG on Anti-Money Laundering Efforts

Kathmandu, Nepal - Indonesia has received high praise from the Asia-Pacific Group on Money Laundering (APG) for its efforts to combat money laundering and terrorist financing. The country scored high marks for compliance with international standards, receiving a “C” rating for 6 out of 40 FATF recommendations related to legal framework compliance, and an “LC” (Largely Compliant) rating for 29 recommendations.

APG’s Mutual Evaluation Report

The APG’s Mutual Evaluation Report (MER), released during its annual session in Kathmandu, Nepal, highlighted Indonesia’s effectiveness in implementing anti-money laundering (AML) and combating the financing of terrorism (CFT) measures. The country received a Substantial rating for 5 Immediate Outcomes (IO), Moderate ratings for 5 IO, and a Low rating for 1 IO related to funding for weapons of mass destruction.

FATF Membership Benefits

Indonesia’s achievement in the APG MER has set the stage for its bid to become a full member of the Financial Action Task Force (FATF). Becoming a FATF full member would bring several benefits, including:

  • Recognition as a country with high financial system integrity
  • Enhanced economic development prospects
  • Leadership opportunities in setting international AML/CFT standards
  • Improved dialogue with the International Monetary Fund (IMF) and World Bank

Bank Indonesia’s Support

In support of Indonesia’s bid for FATF membership, Bank Indonesia has developed three strategies to fulfill FATF recommendations related to payment systems and foreign exchange activities. These include:

  • Implementation of risk-based approach in AML/CFT
  • Sectoral risk assessment
  • Public awareness campaigns

The central bank has also issued guidelines for non-bank payment system service providers and money changers, and has prepared a national risk assessment and regional risk assessments on corruption and virtual assets.

Roadmap to FATF Membership

Indonesia’s roadmap to FATF membership includes several key milestones, including:

  • Fulfillment of all FATF recommendations related to payment systems and foreign exchange activities
  • Strengthening AML/CFT framework
  • Improving public awareness
  • Enhancing international cooperation to prevent money laundering, terrorist financing, and weapons of mass destruction funding

The APG’s recognition of Indonesia’s efforts has given a boost to the country’s bid for FATF membership, which is seen as a crucial step in enhancing financial system integrity and promoting economic development.