Number of Service Points: Key Indicator for Risk-Based Anti-Money Laundering and Terrorism Financing
In a bid to combat money laundering and terrorism financing, non-bank money value transfer service operators and foreign exchange business activity operators in Indonesia are required to implement risk-based anti-money laundering (APU) and prevention of terrorism financing (PPT) programs.
Assessing Inherent Risk
According to guidelines issued by Bank Indonesia, the number of service points is one of the key indicators used to assess an operator’s inherent risk. The Operator must calculate its inherent risk by entering data on too/ RBA prepared by BI (Appendix 1 Risk Assessment Form). The risk values are then divided into three categories: low, medium, and high.
Low-Risk Assessment
- For operators with a low-risk assessment, the recommended action is to run PBI APU & PPT as well as adequate monitoring.
- For those with a medium-risk assessment, the operator must undertake monitoring efforts and preventive measures to prevent increased risks. This can include socializing regular employees regarding implementation guidelines.
Medium-Risk Assessment
- For operators with a medium-risk assessment, the recommended action is to:
- Undertake monitoring efforts
- Preventive measures to prevent increased risks
- Socialize regular employees regarding implementation guidelines
High-Risk Assessment
- For operators with a high-risk assessment, the recommended action is to make special and maximum efforts to implement more stringent risk mitigation measures to minimize such risks. Examples of this include:
- Applying transaction limits on cash transactions
- Conducting employee training programs
Self-Assessment and Control
The Operator then conducts a self-assessment of its APU & PPT program by answering a questionnaire provided by BI (Attachment 2 of the Self-Assessment Form). The assessment criteria are based on the operator’s compliance with aspects such as:
- Active supervision
- Written policies and procedures
- Risk management
- Internal control
Based on the results of the self-assessment, the Operator must cover deficiencies in the five aspects of compliance. This can include providing APU & PPT training to employees or establishing a new SOP for implementation.
Risk Mitigation and Monitoring
Operators are required to assess risks and implement actions to deal with such risks. Examples of risk mitigation measures include:
- Limiting cash transactions
- Conducting regular employee knowledge refreshment sessions
The Operator must also monitor the implementation of its APU & PPT program, including monitoring user service data inputs at all points of service on a regular basis. The results of the monitoring should be reported to the Board of Directors and Commissioners for oversight purposes.
Human Resource Management
The guidelines also emphasize the importance of human resource management in preventing money laundering and terrorism financing. This includes:
- Pre-employee screening
- Employee profile monitoring
- Continuous employee training and awareness improvement programs
- Internal control systems
Internal Control
Internal control systems should include a function responsible for applying APU & PPT, with designated functions tailored to the business scale of the Operator. Written documents, including Directors’ Decrees, should be established to designate names and job descriptions of PPU PPT officers.
Conclusion
In conclusion, the number of service points is a key indicator for risk-based anti-money laundering and terrorism financing in Indonesia. Operators must implement APU & PPT programs, conduct self-assessments, and monitor their implementation to prevent money laundering and terrorism financing activities.