Title: Indonesia’s Anti-Money Laundering Progress and Current Regulatory Landscape

Indonesia’s AML/CTF Efforts and FATF Status

Indonesia, a member of the Asia/Pacific Group on Money Laundering (APG) and an observer of the Financial Action Task Force (FATF), has made impressive strides in its anti-money laundering (AML) and counter-terrorist financing (CTF) measures, following a history of dealing with terrorism financing, including the high-profile PayPal scheme in 2017 ¹. In 2015, Indonesia was removed from FATF’s blacklist.

Key Indonesian Legislation

The Indonesian government’s dedication to improving AML and CTF mechanisms is demonstrated through several pieces of legislation such as:

• Law No. 3 of 2011 on the Protection and Eradication of Money Laundering and Financing of Terrorism-Related Activities
• Law No. 5 of 2018 on the Amendment of Law No. 3 of 2011
• Law No. 8 of 2010 on the Amendment of Law No. 27 of 1999 on Penalties
• Law No. 9 of 2013 on the Anti-Corruption Eradication Commission (KPK)

Additionally, regulations issued by the Bank of Indonesia, including Regulation No. 14/27/PBI/2012 and Regulation No. 19/10/PBI/2017, govern the implementation of AML and CTF programs and the application of know your customer (KYC) standards.

Agencies responsible for investigating money laundering and related charges

Several agencies in Indonesia are assigned for investigating money laundering and other related offences. The Financial Transaction Reports and Analysis Center (PPATK) serves as the country’s primary intelligence-gathering agency concerning money laundering and terrorist financing. Furthermore, the Financial Services Authority (OJK) contributes to preventing money laundering within the financial services sector.

In criminal investigations and prosecutions, the following agencies play a role:

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

The KPK assumes jurisdiction in prosecuting money laundering and corruption cases, demonstrating this in a recent palm oil industry bribery case alleged to involve the misuse of protected forest land.

Goals and Future Plans

Indonesia’s ambition to become a full FATF member by 2021 highlights the Indonesian government’s commitment to maintaining a strong regulatory environment regarding AML and CTF.