Indonesia Enforces Strict Sanctions Screening Regulations to Combat Financial Crime

The Indonesian government has taken a proactive approach in combating financial crime by implementing a robust system to prevent money laundering and terrorist financing. At the heart of this initiative is the Centre for Financial Transaction Reports and Analysis (PPATK), which serves as the country’s Financial Intelligence Unit.

A Risk-Based Approach to Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF)

Indonesia’s compliance with AML and CTF regulations is risk-based, aligning with the Financial Action Task Force’s (FATF) AML policy. This approach assesses customer risk and ensures that non-compliant financial institutions face severe consequences, including:

• Licence revocation
• Five-year blacklisting of stockholders

Key Legislation: OJK Regulation No. 12/POJK.01/2017

The primary anti-money laundering law in Indonesia is OJK Regulation No. 12/POJK.01/2017 Concerning Anti-Money Laundering Program and Terrorism Funding Prevention in the Financial Service Sector. This regulation obliges institutions to implement AML and CTF measures compliant with OJK and FATF standards.

Maintaining Regulatory Compliance

To maintain regulatory compliance, financial institutions must adopt a management framework that oversees corporate performance and adherence to regulations. Those found non-compliant face penalties, which helps law enforcement agencies reduce financial crime while maintaining financial stability and integrity.

Efforts in Socialising and Educating Stakeholders

The Indonesian government’s efforts in socialising, communicating, and educating stakeholders on AML and CTF prevention have contributed to improved money laundering prevention measures. By enforcing strict sanctions screening regulations, Indonesia aims to create a safer and more transparent financial environment for all.