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Indonesia’s Progress in Combating Money Laundering: A Summary
Indonesia has made significant progress in combating money laundering and terrorist financing, as reflected in the latest Mutual Evaluation Report (MER) by the Asia-Pacific Group on Money Laundering (APG).
Compliance with International Standards
The MER report highlights Indonesia’s good compliance with international standards. Specifically:
- 29 recommendations received a “Largely Compliant” rating, indicating that Indonesia is well on track in implementing Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) measures.
- Only one recommendation, related to funding for the proliferation of weapons of mass destruction, received a “Non-Compliant” rating.
Effectiveness in Implementing AML/CFT Measures
The MER report also assesses Indonesia’s effectiveness in implementing AML/CFT measures. The results are encouraging:
- 5 Immediate Outcomes were rated as “Substantial”, indicating that Indonesia is making good progress in achieving its AML/CFT goals.
- 5 other outcomes were rated as “Moderate”, showing that there is still room for improvement.
Preparation towards FATF Full Membership
The Financial Action Task Force on Money Laundering (FATF) is an inter-governmental organization that sets standards to prevent money laundering, terrorism financing, and funding for the proliferation of weapons of mass destruction. Indonesia’s goal is to become a full member of the FATF, which would bring several benefits:
- Acceleration in becoming a country recognized as having high financial system integrity
- Strong footing for economic development
- Leadership role in setting AML/CFT international standards
- Effective formulation of stance between Indonesia and Bank Indonesia
Roadmap towards FATF Membership for Indonesia
Bank Indonesia has prepared three strategies to support the government’s efforts:
- Fulfillment of all FATF recommendations for the payment system sector and foreign exchange business activities
- Increasing public awareness and institutional cooperation in preventing money laundering, terrorism financing, and funding for the proliferation of weapons of mass destruction
- Effective application of AML/CFT principles to support the integrity of the financial system
By following this roadmap, Indonesia is well on its way to becoming a full member of the FATF and solidifying its position as a leader in combating money laundering and terrorist financing.