Know Your Customer and Anti Money Loundering - Bank Sentral Republik Indonesia
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September 22, 2017
ANTI-MONEY LAUNDERING & COUNTER FINANCING OF TERRORISM
 

According to Indonesian Law on Money Laundering (No.8/2010 concerning the Countermeasure and Eradication of Money Laundering) and Indonesian Law on Terror Financing (No. 9/2013 concerning the Prevention and Suppression of Terrorist Financing), Bank Indonesia has been appointed as Supervisory and Regulatory Agency/Body (SRB).

For the purpose of preventing such matters to penetrate into the financial and payment system, Bank Indonesia has issued several provisions regarding the prevention and eradication of the criminal action of Money Laundering and the criminal action of terrorism which adopted based on international standard and recommendation by the Financial Action Task Force (FATF) on Money Laundering that are recognized as 40 Recommendations FATF.

Along with the complexity of products, business models and technology development, all reporting institutions under the jurisdictions of Bank Indonesia are required by law to undertake preventive measures to prevent their institutions from being used as a conduit for money launder and terrorism financing activities. A proper and effective implementation of anti-money laundering and prevention of terrorist financing should provide opportunities for promoting prudent practices and mitigating from risks that may arise.

Bank Indonesia continuously cooperate and coordinate with Indonesian Financial Transaction Reports and Analysis Centre (PPATK), the Corruption Eradication Commission (KPK), Financial Services Authority (OJK), Indonesian National Police and other relevant agencies to promote strong legal basis and effective legal enforcement as the effort to prevent and eradicate the criminal action of money laundering and terrorist financing.

 
NATIONAL RISK ASSESSMENT

In 2015, PPATK along with other stakeholders has issued the National Risk Assessment on Money Laundering (NRA on ML) based on a comprehensive review involving various related agencies. The National Risk Assessment (NRA) is an organized and systemic activity to identify and evaluate sources and methods of money laundering and financing of terrorism, weaknesses in anti money laundering and counter terrorism financing (AML/CFT) systems, as well as other vulnerabilities that have direct or indirect impact on a country.

The objectives of the NRA are as follow:

  • Provide inputs for potential AML / CFT regulatory reforms through the formulation or calibration of the national AML / CFT policy;
  • Assist in prioritizing and allocating AML / CTF resources by the authorities, including providing inputs in each risk assessment performed partially by each stakeholder
  • Provide inputs in AML / CTF risk assessment conducted by Financial Institutions and Designated Non-Financial Businesses and Professions (DNFBS).
Indonesia Risk Assessment on ML can be downloaded here.
 
SECTORAL RISK ASSESSMENT

Following up the NRA publication, in order to mitigate the risk of ML and TF in Money Changers Non-Bank and Money Value Transfer Services (MVTS), one of the efforts is to conduct risk assessments of AML specifically on Money Changers Non-Bank and MVTS. The purpose of risk assessments on Money Changers Non-Bank and MVTS are as follow:

  • Identify and analyze threats of AML and CTF in Money Changers and MVTS, including: number of cases of AML and CTF and number of Suspicious Financial Transaction Reports (STRs);
  • identify the vulnerability and impact of ML and TF through the Money Changers Non-Bank and MVTS; and
  • analyze key risks of ML and TF through risk mapping on Customers, Regions, and Products in Money Changers and MVTS with risk factor formulations including threat, vulnerability, and consequence.
Sectoral Risk Assessment on Money Changers Non-Bank and MVTS in Money Laundering is made in Bahasa Indonesia and English version.
 
RELATED REGULATIONS REGARDING AML/CFT
 
RELATED LINKS
 
  1. Indonesian Financial Transaction Reports and Analysis Center
  2. Financial Action Task Force on Money Laundering
  3. Asia Pacific Group on money Laundering
  4. Bank for International Settlements
  5. Egmont Group of Financial Intelligence Units
  6. United Nations
  7. European Union
  8. Council of Europe
  9. Caribbean Financial Action Task Force
 
 
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