National and International Cooperation - Bank Sentral Republik Indonesia
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October 25, 2020

BI continues to expand the AML CFT cooperation with relevant authorities, both national and international in order to strengthen the implementation of AML CFT.

National and International Cooperation related to AML CFT

a. National Cooperation

Bank Indonesia continues to actively and continuously coordinate with the Financial Transaction Reports and Analysis Center (PPATK), the Corruption Eradication Commission (KPK), the Financial Services Authority (OJK), the Indonesian National Police (POLRI), the National Narcotics Agency (BNN) and other relevant agencies to strengthen the implementation of AML CFT.

b. International Cooperation

Bank Indonesia is actively cooperating with Bank Negara Malaysia, Bangko Sentral ng Pilipinas, Bank of Thailand. BI continues to make efforts to expand AML/CFT cooperation with other foreign authorities.

Membership in International Institutions related to AML CFT

a. Membership in the APG

APG Profile

Asia / Pacific Group on Money Laundering is a regional organization (Asia Pacific) to prevent and eradicate money laundering, terrorist financing, and proliferation funding activities. Indonesia has been a member of APG since 2001.

Mutual Evaluation

Every country that is a member of APG is committed to implementing Mutual Evaluation (ME) to assess the level of compliance with FATF Recommendations as an international standard of Anti-Money Laundering and Counter Financing of Terrorism (AML CFT).

 

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APG Mutual Evaluation Results
 

The 21st Asia / Pacific Group (APG) on Money Laundering session held on July 21-27 2018 in Kathmandu, Nepal, has ratified the Indonesian Mutual Evaluation Report (MER). The MER is the result of a review of Indonesia's compliance and effectiveness of anti-money laundering and terrorism financing regimes that are based on 40 Financial Action Task Force (FATF) recommendations.

Assessment of compliance with efforts to prevent and eradicate criminal acts of money laundering and financing of terrorism is carried out in a professional and objective manner. The MER Indonesia assessor team has representatives from the United States, Canada, Macao-China, China-Taipei, Pakistan and Bangladesh and the APG Secretariat.

The APG Annual Session in Kathmandu, Nepal has determined that compliance and effectiveness of Indonesia's implementation of international standards in the field of prevention and eradication of criminal acts of money laundering and financing of terrorism, is considered to be very adequate. Of the 40 FATF recommendations related to legal framework compliance, Indonesia received a 'C' (compliant) rating or the highest score for 6 recommendations. Then got an 'LC' (Largely Compliant) rating for 29 recommendations, and got a 'PC' (Partially Compliant) rating for 4 recommendations. Of the overall recommendations there is only one recommendation in which Indonesia received a 'NC' (Non-Compliant) rating, namely on recommendations related to funding for the proliferation of weapons of mass destruction.

Regarding the effectiveness of implementation, Indonesia received a Substantial rating for 5 Immediate Outcomes (IO), then a Moderate rating for 5 IO, as well as a Low rating for 1 IO related to funding for the proliferation of weapons of mass destruction. The results of the assessment indicate that the effectiveness of the implementation of APU / PPT in Indonesia is better when compared to APG countries such as Australia, Malaysia and Singapore.

The complete report of Indonesia’s APG Mutual Evaluation Report (MER) can be downloaded here

b. Preparation towards FATF Full Membership

FATF Profile

The Financial Action Task Force on Money Laundering (FATF) is an inter-governmental organization formed in 1989 by the G-7 with the aim of developing systems and infrastructure to prevent and combat money laundering, terrorism financing, and funding for the proliferation of weapons of mass destruction.

FATF sets standards, namely FATF 40 Recommendations and procedures (policy making) and encourages the effectiveness of its implementation through legal instruments, regulations and other media (recommendations) to combat money laundering, terrorist financing and weapons of mass destruction that will threaten the integrity of the financial system. In its operations, FATF monitors the implementation of recommendations issued to its members, reviews technical and eradication media and encourages the implementation of its recommendations globally.

Benefits of Being a Full Member

  1. Acceleration to become a country recognized as having high financial system integrity by applying international standards to prevent crime in the financial sector.
  2. Be a strong footing going forward for the development of Indonesia's economy in the world, where this can improve Indonesia's ranking in various aspects, including investment.
  3.  A means to demonstrate Indonesia's leadership as a major country, especially in Asia and emerging markets, which of course can have a positive impact on the development of the domestic economy.
  4. Can play an active and foremost role in setting AML CFT international standards that are beneficial for the development of the domestic AML CFT framework and the preparation of future policy responses for emerging markets.
  5. The effectiveness of the formulation of stance between Indonesia and Bank Indonesia, especially in discussions in international forums. Indonesia’s Roadmap to become a FATF Full Member

 

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BI's Strategy in supporting Indonesia to become a FATF Full Member

In supporting the Government's efforts to become a Full Member of FATF, Bank Indonesia has prepared 3 strategies, namely

1. Fulfillment of all FATF recommendations for the payment system sector and foreign exchange business activities in preventing and eradicating money laundering, terrorism financing, as well as the proliferation of weapons of mass destruction financing.

The effective application of AML-CFT principles is believed to be able to support the integrity of the financial system in Indonesia, increase Indonesia's credibility and reputation, and comply with applicable international AML-CFT standards. In the context of setting the AML-CFT principles, BI has issued provisions and guidelines regarding the implementation of the AML-CFT program for Non-Bank Payment System Service Providers (PJSP) and Non-Bank Money Changers (KUPVA BB) and Financial Technology provisions. In the context of risk assessment, Bank Indonesia also prepared a Sectoral Risk Assessment (SRA) and Risk Based Approach (RBA) Guidelines for PJSP SB & KUPVA BB and contributed to the preparation of a National Risk Assessment (NRA), Regional Risk Assessment (RRA) on Corruption and SRA Virtual. Joint assets of related Ministries / Agencies that are coordinated by PPATK. In the context of payment system supervision, a risk-based approach is applied both by Providers and by BI itself. This is also stated in the new PBI AML-CFT which requires the Providers to apply a risk-based approach (RBA) in the implementation of AML-CFT. Meanwhile in terms of Supervision, the risk-based approach is applied both by the providers and by Bank Indonesia itself. This is also outlined in the new AML-CFT Regulation which requires Providers to implement a risk-based approach (RBA) in implementing AML-CFT.

2. Increasing public awareness and institutional cooperation in preventing and eradicating money laundering, terrorism financing, and funding for the proliferation of weapons of mass destruction.

In terms of increasing public awareness, Bank Indonesia has educated the public to use licensed PJSP and KUPVA BB. In the context of institutional cooperation, Bank Indonesia collaborates with ministries and institutions in Indonesia, including with the police to curb unlicensed Non-Bank Money Changers (KUPVA BB) and illegal Non-Bank Fund Transfers (PTD BB) in Indonesian territory. Control against unlicensed Providers and the application of the Quick Response (QR) Code on the KUPVA BB and PTD BB logos are forms of protection for the public from money laundering and terrorism financing activities. In order to improve the implementation of the AML and CFT programs, Bank Indonesia has also strengthened cooperation and coordination intensively with relevant authorities such as the PPATK, BNN, and KPK to ensure the effectiveness of its implementation. In the context of international cooperation, Bank Indonesia is actively cooperating with Bank Negara Malaysia, Bangko Sentral ng Pilipinas, Bank of Thailand, and other international institutions.

3. Improved coordination with Ministries and Institutions in the TPPU Committee in the technical preparation of the FATF Mutual Evaluation for Indonesia, particularly in sectors under the authority of Bank Indonesia.

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