Financial Crime World

Indonesia Takes Aim at Financial Crime: What You Need to Know

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Indonesia has made significant strides in combating financial crime, having previously been listed on the Financial Action Task Force’s (FATF) blacklist. As an observer of FATF and a member of the Asia/Pacific Group on Money Laundering (APG), Indonesia is committed to implementing robust anti-money laundering (AML) and counter-terrorist financing (CTF) measures.

A Brief History of Financial Crime in Indonesia

In 2017, government investigators uncovered a terrorist financing scheme involving the use of PayPal, highlighting the need for improved AML and CTF practices. Since then, Indonesia has made significant progress in strengthening its financial crime regulations and law enforcement efforts.

Indonesia’s Anti-Money Laundering (AML) Legislation

Indonesia’s AML legislation is comprised of several laws, including:

  • Law No. 3 of 2011
  • Law No. 5 of 2018
  • Law No. 8 of 2010
  • Law No. 9 of 2013

The Bank of Indonesia has also issued regulations on the implementation of AML and CTF programs for commercial banks and non-bank payment system service providers.

AML Regulators in Indonesia

The country’s AML regulators include:

  • Financial Transaction Reports and Analysis Center (PPATK)
    • Responsible for gathering intelligence on money laundering and terrorist financing
  • Financial Services Authority (OJK)
    • Plays a key role in preventing money laundering within the financial services sector

Investigation and Prosecution of Financial Crime

Several agencies have jurisdiction over the investigation of money laundering and corruption charges, including:

  • State Police
  • Prosecutor’s Office
  • Corruption Eradication Commission (KPK)
  • National Narcotics Agency (BNN)
  • Directorate General of Taxes
  • Directorate General of Customs and Excise

The public prosecutor or KPK may pursue prosecution in such cases.

Indonesia’s Efforts to Combat Financial Crime

Indonesia’s efforts to combat financial crime have been recognized, with the country aiming to become a full member of FATF by 2021. With its rich natural resources and growing economy, Indonesia is poised to become an important player in the global fight against financial crime.

Conclusion

However, it remains crucial for the country to continue strengthening its AML and CTF regulations and law enforcement efforts to ensure the integrity of its financial system.