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Indonesia Takes Steps to Strengthen AML Legislation and Oversight
JAKARTA, Indonesia - The Indonesian Financial Services Authority (OJK) has taken a significant step towards strengthening its anti-money laundering (AML) legislation and oversight, with the aim of safeguarding the country’s financial stability.
New Regulation Implemented
According to sources, OJK Regulation No.12/POJK.01/2017 concerning the Implementation of the Anti-Money Laundering Programme and Terrorist Funding Prevention in the Financial Service Sector has been implemented. This regulation mandates institutions to adopt AML and Combating the Financing of Terrorism (CFT) provisions that adhere to international standards.
Key Requirements
The regulation requires financial institutions to:
- Implement a risk-based approach
- Conduct customer due diligence
- Screen customers against international sanctions lists
- Report suspicious transactions to the relevant financial intelligence unit (FIU)
The OJK has also issued guidelines for banks and other financial institutions on how to comply with AML regulations.
Additional Efforts
In addition, the Bank of Indonesia has issued regulations on the implementation of Anti-Money Laundering and Combating the Financing of Terrorism Programmes for Commercial Banks and non-bank payment system service providers.
Challenges Remain
Despite these efforts, Indonesia remains vulnerable to money laundering due to:
- Gaps in financial system legislation and regulation
- Cash-based economy
- Weak rule of law
- Partially ineffective law enforcement institutions that lack coordination
The country also faces other risks such as drug trafficking, illegal logging, wildlife trafficking, theft, fraud, embezzlement, and the sale of fake goods.
Innovative Solution
To address these challenges, Tookitaki, a leading AML solution provider, has developed an Anti-Money Laundering Suite (AMLS) that enables financial institutions to have comprehensive risk coverage in terms of AML insights out-of-the-box at all times. The suite includes:
- Transaction Monitoring
- Dynamic Customer Risk Review
- Smart Screening
- Case Management solutions under one roof for all AML needs
According to Tookitaki, its solution can help banks and financial institutions in Indonesia detect hidden suspicious patterns, generate fewer alerts of higher quality, and provide better risk coverage than static rules.
Government Support
The Indonesian government has emphasized the need for AML compliance and encouraged local FIs to use modern technologies such as machine learning and big data analytics in enhancing the effectiveness of AML compliance programs.
Conclusion
Indonesia’s efforts to strengthen its AML legislation and oversight are a significant step towards safeguarding the country’s financial stability. With the help of innovative solutions like Tookitaki’s Anti-Money Laundering Suite, financial institutions can effectively combat money laundering and other financial crimes, and contribute to a safer and more stable financial system.
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Note: This article is intended for media purposes only and may be edited for clarity and brevity.