Financial Crime World

Indonesia Fights Money Laundering Techniques, But More Efforts Needed: Experts

Background

Indonesia has a strong legal framework in place to combat money laundering and terrorist financing, but despite this, the country still faces significant challenges in these areas.

Progress Made

Indonesia’s financial authorities have taken steps to improve their anti-money laundering (AML) and combating the financing of terrorism (CFT) frameworks, with a focus on domestic crimes such as corruption, narcotics, tax fraud, and forestry crimes. The country has also made progress in understanding the risks it faces and developing risk-based policies.

Areas for Improvement

Experts warn that Indonesia’s efforts need to be more targeted and effective in addressing these threats. The Financial Action Task Force (FATF) has highlighted several areas where Indonesia needs improvement, including:

  • Asset recovery
  • Risk-based supervision
  • Proportionate and dissuasive sanctions
  • Adequate information on the ultimate owners of companies

Challenges

Indonesia’s financial intelligence unit has been praised for providing high-quality financial intelligence to law enforcement agencies, but experts say more needs to be done to investigate and prosecute money laundering activities. The country is also urged to take a closer look at the risk of abuse of its non-profit sector for terrorism financing and take proportionate measures without disrupting legitimate charitable activities.

Asset Recovery

Indonesia has been criticized for not doing enough to recover assets linked to criminal activity, particularly those located abroad or derived from forestry or environmental crimes. Experts say that Indonesia needs to adopt a more proactive approach to asset recovery in order to permanently deprive criminals of the proceeds of their crimes.

Strategy

Despite these challenges, Indonesia is working to address its shortcomings and has made significant progress in detecting, investigating, and prosecuting terrorist financing cases. The country’s strategy includes:

  • Returning foreign terrorist fighters
  • De-radicalization efforts

Conclusion

While Indonesia has taken important steps to combat money laundering and terrorist financing, more needs to be done to address the root causes of these crimes and to ensure that criminals are held accountable for their actions. With continued effort and improvement, Indonesia can effectively combat these threats and protect its citizens from financial crime.