Financial Crime World

Title: Indonesia’s Anti-Money Laundering Landscape: Key Laws, Agencies, and Recent Developments

Overview

Indonesia, as a member of the Financial Action Task Force (FATF) and the Asia/Pacific Group on Money Laundering (APG), has been focusing on its anti-money laundering (AML) and counter-terrorist financing (CTF) efforts. After facing challenges and being on the FATF’s watchlist due to terrorism financing concerns and a significant PayPal-related incident in 2017, Indonesia made significant progress and was removed from the blacklist in 2015. The country aims to become a full FATF member in 2021.

Key Indonesian AML Legislation

  • Law No. 3 of 2011: The Anti-Money Laundering law
  • Law No. 5 of 2018: The Amendment to Law No. 3 of 2011
  • Law No. 8 of 2010: The Law on Reporting Suspicious Transactions to Law Enforcement
  • Law No. 9 of 2013: The Law on the Prohibition of Money Laundering and Financing of Terrorism
  • Regulation No. 14/27/PBI/2012: Regulations addressed to commercial banks and financial institutions
  • Regulation No 19/10/PBI/2017: Regulations addressing AML and CTF in non-bank payment systems
  • Know Your Customer (KYC) standards: Extensively regulated

Key AML Regulators in Indonesia

  • Financial Transaction Reports and Analysis Center (PPATK): Also known as Pusat Pelaporan dan Analisis Transaksi Keuangan
  • Financial Services Authority (OJK): The Otoritas Jasa Keuangan

Law Enforcement Agencies

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

Recent Developments & Cases

Corruption Scandal in the Palm Oil Industry

A recent corruption scandal in the palm oil industry involved alleged bribery to cover up the unlawful use of protected forest land. The case was jointly investigated by the KPK and the State Police, highlighting the importance of ongoing AML and CTF efforts in Indonesia.

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