BI backs Government on Anti-Money Laundering and Countering Terrorism Financing - Bank Sentral Republik Indonesia
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October 23, 2019

Bank Indonesia (BI) backs the Government on anti-money-laundering and countering the financing of terrorism, through BI's function as payment system authority. BI support is realised through three salient strategies: (i) meeting the national and international standards or principles of Anti-Money Laundering and Countering Terrorism Financing (AML/CTF); (ii) increasing public and operator awareness of the risks of money laundering and terrorism financing; and (iii) increasing coordination/cooperation amongst national and international institutions. That was the key message of today’s (12/09) socialisation activities on the Anti-Money Laundering Regime through Discussion with the Mass Media delivered by the head of the Indonesian Financial Transaction Reports and Analysis Centre (INTRAC), Kiagus Ahmad Badaruddin, in Depok, West Java. Representatives from Bank Indonesia also took the opportunity to explain the application of AML/CTF principles in the payment system.

The effective application of AML/CTF principles is expected to enhance financial system integrity in Indonesia, elevate the credibility and reputation of Indonesia as well as comply with prevailing international AML/CTF standards. To that end, Bank Indonesia will always back government measures to apply AML/CTF principles, including implementation of the Mutual Evaluation (ME) to become a member country of the Financial Action Task Force on Money Laundering (FATF) in 2020. Some of the benefits of Indonesia's FATF membership include: (i) expediting Indonesia's status as a country recognised for high financial system integrity through the application of international standards to prevent crime in the financial sector; (ii) providing a solid footing for Indonesia's future economic development in the world, which could elevate Indonesia's ranking in various aspects, including investment; (iii) providing a means to demonstrate Indonesia's leadership as a large country, in Asia and amongst emerging markets in particular, which would undoubtedly benefit domestic economic development; (iv) facilitating an active and prominent role in the application of international AML/CTF standards that will aid the development of a domestic AML/CTF framework and formulate a policy response for emerging markets; (v) improving the effectiveness of formulating Indonesia's stance in discussions at international forums.

Application of Bank Indonesia's three main AML/CTF strategies in the payment system will be implemented through efforts undertaken by Bank Indonesia. In the context of applying AML/CTF principles, Bank Indonesia has already issued regulations regarding AML/CTF program implementation by nonbank payment system service providers and money changers as well as FinTech regulations. In terms of payment system supervision, Bank Indonesia has instituted a risk-based approach along with other payment system operators. This is also contained within a new Bank Indonesia Regulation (PBI) on Anti-Money Laundering and Countering Terrorism Financing (AML/CTF) that requires operators to apply a risk-based approach to AML/CTF implementation. To raise public awareness, Bank Indonesia is providing public information regarding the use of licensed payment system service providers and moneychangers. In terms of coordination, Bank Indonesia is actively coordinating with the national police to curb the spread of unlicensed money changers and illegal nonbank financial agents throughout Indonesia. The clampdown on unlicensed operators together with the introduction of a Quick Response (QR) Code displayed on the licensed operators’ logos represent a tangible form of consumer protection and AML/CTF activity. Furthermore, Bank Indonesia constantly coordinates with Indonesian Financial Transaction Reports and Analysis Centre (INTRAC), the Indonesian Financial Services Authority (OJK), national police and other relevant institutions/authorities. Internationally, Bank Indonesia actively cooperates with Bank Negara Malaysia, Bangko Sentral ng Pilipinas, Bank of Thailand and other international organisations.

Active public participation is expected in terms of applying AML/CTF procedures when using nonbank payment system service providers and licensed money changers. In addition, the public are expected to report unauthorised payment system service providers and unlicensed money changers to Bank Indonesia and are required to show identification when transacting with payment system service providers and licensed money changers. Bank Indonesia has also added a special AML/CTF menu to its website though the following link in order to provide more detailed information concerning AML/CTF principles, particularly in the payment system.

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