Financial Crime World

Indonesia’s Anti-Money Laundering and Counter Terrorism Financing Efforts Boosted by New Regulations

Jakarta, Indonesia - The Indonesian government has taken significant steps to enhance its anti-money laundering (AML) and counter terrorism financing (CFT) efforts with the introduction of new regulations aimed at preventing financial crimes.

Strengthening Financial System

According to a statement released by the Financial Services Authority (OJK), the new regulations will require non-bank payment system service providers (PJSP) and non-bank money changers (KUPVA BB) to implement robust AML-CFT programs. The regulations, which come into effect on January 1st, 2023, are designed to strengthen the country’s financial system and prevent the misuse of its financial institutions.

Key Requirements

Under the new rules, PJSPs and KUPVA BBs will be required to:

  • Conduct regular risk assessments
  • Implement measures to identify and report suspicious transactions
  • Maintain accurate records
  • Apply a risk-based approach (RBA) in their AML-CFT efforts, taking into account factors such as:
    • Nature of business
    • Customer types
    • Geographic locations

Public Awareness and Institutional Cooperation

The OJK has emphasized the importance of public awareness and institutional cooperation in preventing financial crimes. To this end, Bank Indonesia has launched a public education campaign aimed at educating consumers about the risks associated with money laundering and terrorism financing, and the importance of using licensed PJSPs and KUPVA BBs.

International Recognition

The new regulations are seen as a major step forward in Indonesia’s efforts to combat financial crimes, and have been welcomed by international organizations such as the Financial Action Task Force (FATF). The FATF has praised Indonesia’s progress in implementing AML-CFT measures, and has encouraged the country to continue its efforts towards full membership.

Roadmap for FATF Membership

Indonesia’s ambition to join the FATF is seen as a key milestone in its efforts to demonstrate its commitment to financial transparency and integrity. Full membership would provide Indonesia with greater credibility and recognition on the international stage, and would be seen as a major boost to its economic development.

The OJK has released a roadmap outlining its strategy for supporting Indonesia’s bid for FATF membership. The strategy includes three key areas of focus:

  • Fulfillment of all FATF recommendations for the payment system sector and foreign exchange business activities
  • Effective application of AML-CFT principles
  • Increasing public awareness and institutional cooperation

Conclusion

The Indonesian government has welcomed the new regulations as a major step forward in its efforts to combat financial crimes, and has emphasized its commitment to continuing its progress towards full membership with the FATF.