Financial Crime World

Indonesia’s Financial System Integrity Receives High Praise from International Assessors

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A team of international assessors from the United States, Canada, Macao-China, China-Taipei, Pakistan, Bangladesh, and the APG Secretariat has concluded that Indonesia’s implementation of international standards to prevent and combat money laundering and terrorist financing is highly effective.

Assessment Results

The assessment evaluated Indonesia’s compliance with 40 recommendations related to legal framework compliance. The country received a “C” rating for six recommendations, indicating full compliance, while 29 recommendations were rated as “Largely Compliant”. Only one recommendation was deemed non-compliant, regarding funding for the proliferation of weapons of mass destruction.

Effectiveness

Indonesia scored well in terms of effectiveness, with five Immediate Outcomes (IO) receiving a Substantial rating, five IO receiving a Moderate rating, and one IO related to funding for the proliferation of weapons of mass destruction receiving a Low rating. The assessment highlighted that Indonesia’s implementation of AML/CFT measures was more effective compared to other APG countries such as Australia, Malaysia, and Singapore.

Roadmap to FATF Membership

Bank Indonesia, the country’s central bank, has outlined a roadmap towards FATF membership, which includes fulfilling all FATF recommendations related to payment systems and foreign exchange activities. The roadmap consists of three strategies:

Strategies

  1. Fulfillment of all FATF recommendations for payment system sectors and foreign exchange business activities: Bank Indonesia aims to ensure that all payment systems and foreign exchange businesses in the country comply with international standards.
  2. Effective application of AML/CFT principles: The central bank will implement measures to ensure the integrity of the financial system, increase credibility, and comply with international standards.
  3. Increasing public awareness and institutional cooperation: Bank Indonesia will raise public awareness about the importance of preventing money laundering, terrorist financing, and weapons of mass destruction proliferation, while promoting institutional cooperation among relevant authorities.

Benefits of FATF Membership

Becoming a full member of FATF would bring numerous benefits to Indonesia, including:

Advantages

  1. Acceleration in becoming recognized as a country with high financial system integrity: FATF membership would solidify Indonesia’s reputation as a major player in the global financial landscape.
  2. Strengthening its economy globally: Membership could improve Indonesia’s ranking in various aspects, including investment.
  3. Enhancing its leadership role in Asia and emerging markets: FATF membership would provide Indonesia with an opportunity to play a leading role in setting international AML/CFT standards.
  4. Playing an active role in setting international AML/CFT standards: As a member of FATF, Indonesia would be able to contribute to the development of global AML/CFT policies and standards.
  5. Improving the effectiveness of policy responses for emerging markets: FATF membership would enable Indonesia to share its expertise and best practices with other emerging markets.

With its high assessment scores, Indonesia is well on its way to achieving FATF membership, which would further solidify its position as a major player in the global financial landscape.