Financial Crime World

Indonesia Must Intensify Fight Against Financial Crime: Report

Country Faces Significant Risks of Money Laundering and Terrorist Financing

According to a recent report by the global anti-money laundering watchdog Financial Action Task Force (FATF), Indonesia has been hailed as a nation with a robust framework to combat money laundering and terrorist financing. However, experts warn that the country still needs to improve its efforts in several key areas.

Key Findings of the Report

  • Strong legal framework: Indonesia’s strong legal framework has made significant contributions to tackling money laundering and terrorist financing.
  • Effective financial intelligence: The country’s effective financial intelligence has helped in investigating and prosecuting money laundering and terrorist financing cases.
  • Significant risks: However, the report also identified several shortcomings that require urgent attention, including:
    • Improving asset recovery
    • Risk-based supervision
    • Proportionate and dissuasive sanctions

Challenges Facing Indonesia

Domestic Crimes

  • Corruption
  • Narcotics trafficking
  • Tax evasion
  • Forestry crimes

Vulnerability to Terrorism Financing

  • Presence of terrorist organizations and their supporters

Progress Made by Indonesia

  • Risk-based policies: The country has made significant progress in addressing the challenges it faces.
  • Robust inter-agency coordination: Indonesia’s risk-based policies and strategies have been praised for their effectiveness.
  • Effective international cooperation: The country has also improved its international cooperation, particularly in informal exchanges on time-sensitive cases.

Areas for Improvement

  • Supervision of money changers: Indonesia needs to improve its supervision of money changers.
  • Money transfer services: The country also needs to improve its supervision of money transfer services.
  • Non-financial sectors: Supervision of non-financial sectors is another area where improvement is needed.
  • Imposition of sanctions: Experts say that Indonesia must impose sanctions proportionate and dissuasive in nature.

Recommendations

  • Better information sharing: The country needs to share better information about the ultimate owners of companies with law enforcement agencies.
  • Proactive approach: Indonesia should take a more proactive approach in addressing the risk of abuse of non-profit organizations for terrorism financing.

Financial Intelligence Unit (FIU)

The report commended Indonesia’s Financial Intelligence Unit (FIU) for providing high-quality financial intelligence to law enforcement agencies, which has helped in investigating and prosecuting money laundering and terrorist financing cases.