Indonesia’s Anti-Money Laundering and Counter-Terrorist Financing Efforts Show Mixed Results
JAKARTA, Indonesia - The Asia-Pacific Group on Money Laundering (APG) has released a new assessment of Indonesia’s anti-money laundering and counter-terrorist financing (AML/CFT) efforts, revealing both positive progress and significant areas for improvement.
Positive Progress
Indonesia has made good progress in understanding its money laundering and terrorist financing risks, using financial intelligence for investigations, and cooperating domestically and internationally to combat criminals. The country’s Financial Intelligence Unit (PPATK) produces and disseminates a wide range of financial intelligence products, which are widely used by law enforcement agencies to identify and detect criminal networks.
Areas for Improvement
However, major improvements are needed in several areas:
- Supervision: Indonesia needs to strengthen its supervision of financial institutions and designated non-financial businesses and professions (DNFBPs) to ensure they are implementing effective AML/CFT measures.
- Implementation of Preventive Measures: The country’s legal and regulatory framework is strong, but there is a need for significant improvement in the implementation of these frameworks, particularly in regards to terrorism financing and risk-based approaches for non-profit organizations (NPOs).
- Targeted Financial Sanctions: Indonesia needs to improve its targeted financial sanctions regime to effectively freeze and seize assets linked to criminal activity.
Limitations
The report also highlighted several limitations:
- Limited STRs from DNFBPs: The number of suspicious transaction reports (STRs) from DNFBPs is limited, as well as those related to environmental crimes.
- GoAML System Registration: A significant number of reporting entities have not yet registered with the goAML system, which is the most efficient way to submit reports.
Risk Assessments
The APG assessment also highlighted the need for more robust approaches to risk assessments, particularly in regards to NPOs and environmental crimes. While Indonesia’s efforts to identify and assess internal geographical risks across different provinces are significant, more needs to be done.
Conclusion
Overall, the APG assessment found that while Indonesia has made some progress in its AML/CFT efforts, there is still much work to be done to strengthen its framework and address remaining vulnerabilities. The country must continue to improve its supervision, implementation of preventive measures, and targeted financial sanctions regime to effectively combat money laundering and terrorist financing.