Indonesia’s Payment System Providers Required to Ensure Identity of Senders
New Regulation Issued by Bank Indonesia
Jakarta, Indonesia - In a move to combat money laundering and terrorism financing, the Governor of Bank Indonesia has issued Regulation No. 18/12 on Anti-Money Laundering and Combating of Terrorism Financing Programmes for Payment System Service Providers Other Than Banks.
Key Requirements
- Payment system providers are required to submit Suspicious Transaction reports, cash financial transaction reports, and financial statements on incoming and outgoing foreign funds transfers as stipulated in the laws and regulations governing the prevention and eradication of money laundering.
- Providers must also report transactions suspected to be linked to terrorism activity or financing of terrorism.
- The submission of these reports will follow the guidance of provisions issued by the Financial Services Authority (OJK).
Internal Controls
- Payment system providers are required to establish internal controls, including setting a board of directors policy on limits on powers and responsibilities of units related to implementation of the Anti-Money Laundering (AML) and Combating of Terrorism Financing (CTF) programme.
- Providers must also implement a screening procedure for recruitment of new employees to prevent exploitation as a medium or destination of money laundering or terrorism financing involving internal parties.
Employee Training
- Ongoing training on AML/CTF laws and regulations, techniques, methods, and typology of money laundering or terrorism financing is mandatory for all employees.
Confidentiality
- The regulation emphasizes the importance of confidentiality in reporting suspicious transactions.
- Providers are prohibited from informing service users or other parties about reports submitted to the Financial Services Authority.
Compliance and Enforcement
- Bank Indonesia will oversee the implementation of AML/CTF programmes by payment system providers.
- Non-compliance with the regulations may result in administrative sanctions, including written warnings, suspension of business, cancellation of licenses, and revocation of licenses.
Effective Date
The regulation came into effect on June 8, 2013.