Regulation and Risk Analysis - Bank Sentral Republik Indonesia
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October 25, 2020

AML CFT Framework at Bank Indonesia

The AML CFT Framework was built to support the SPI Vision 2025 and prevent money laundering, terrorism financing, and funding for the proliferation of weapons of mass destruction that pose various risks, including:

  1. Threatening economic stability and financial system integrity; 
  2. Reducing Indonesia's credibility in the international view;
  3. Increasing investment risk;
  4. The terrorism financing is one form of threat to the country's sovereignty. 

 

The outcomes of the AML CFT Implementation on the SPI are as follows: 

  1. The integrity of the Indonesian financial system that supports economic stability;
  2. The credibility and reputation of Indonesia increases internationally, with compliance with international standards;
  3. The integrity of the Indonesian financial system supports the investment climate;
  4. Terrorism can be mitigated through the prevention of terrorism financing.

 
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Sectoral Risk Assessment (SRA)

Bank Indonesia has been conducted the risk assessment of ML and TF in the sector of non-bank payment system service provider and money changers. The assessment is based on geographic, customer, products and services, and delivery channels. The risk assessment is outlined in the Sectoral Risk Assessment (SRA) which refers to the National Risk Assessment (NRA). The purpose of the SRA adjustment as follows: 

  1. to identify and analyze the potential and vulnerability of ML and TF; and
  2. to analyse the key risks of ML and TF, which involves mapping the risks interms of the geographic, customer, products and services, and delivery channels.

 

NRA on Money Laundering publication can be downloaded here

NRA on Terrorist Financing publication can be downloaded here

SRA publications can be downloaded here

 

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AML CFT Policy

 

As a Supervisory and Regulatory Bodies (LPP), Bank Indonesia has issued Bank Indonesia Regulation (PBI) No. 19/10/PBI/2017 concerning the Implementation of Anti-Money Laundering and Countering Terrorism Financing for Non-Bank Payment System Service Providers and Non-Bank Money Changers (PBI AML CFT).

The provisions contained in PBI AML CFT became effective in September 2017, targeting Non-Bank Payment System Service Providers as well as Non-Bank Money Changers. The PBI also stipulates the AML CFT requirements specific to payment system service providers and Money Changers as follows: 

  1. tasks and responsibilities of the directors and active supervision of the Board of Commissioners;
  2. policies and written procedures;
  3. risk-management processes;
  4. human resources management; and
  5. internal control system.

 

In compiling the PBI AML CFT, BI adopts various provisions, including:

  1. FATF 40 Recommendations; 
  2. Act No. 8 of 2010 concerning the Prevention and Eradication of Money Laundering (ML Act);
  3. Act No. 9 of 2013 on the Prevention and Eradication of Terrorism Financing (TF Act). 

 

PBI AML CFT can be downloaded here

 

Beside issuing the PBI AML CFT, Bank Indonesia also issues other BI Regulations that refer to the PBI AML CFT, including:

  1. PBI No. 14/2/PBI / 2012 concerning Non-Bank Issuers of Card Based Payment Instrument;
  2. PBI No.14/23/ PBI/2012 concerning Fund Transfer;
  3. PBI No.18 /20/PBI/2016 concerning Non-Bank Money Changers;
  4. PBI No.18/40/PBI/2016 concerning the Implementation of Payment Transaction Processing;
  5. PBI No.19/12/PBI/2017 concerning the Implementation of Financial Technology;
  6. PBI No. 20/6/PBI/2018 concerning Electronic Money.

 

Bank Indonesia also issued technical guidelines derived from the PBI AML CFT, including: 

  1. Guidelines on the implementation of Risk Based Approach of AML CFT (RBA);
  2. Guidelines on Know Your Customer (Customer Due Diligence) for Non-Bank Payment System Service Providers and Non-Bank Money Changers. 
  3. Guidelines on the implementation of immediate blocking of fund owned by individuals or corporations the identities of which are listed in the List of Suspected Terrorists and Terrorist Organizations (DTTOT);
  4. Guidelines on the implementation of immediate blocking of fund owned by individuals or corporations the identities of which are listed in the List of Funding of Proliferation of Weapons of Mass Destruction; 

 

 

Technical Guidelines AML CFT

Risk Based Approach (RBA)

In accordance with FATF Recommendation No. 1, Providers must identify and understand the risks of money laundering and terrorism financing covering geographic, customer, products and services, and delivery channels. As well as referring to the PBI AML CFT, Risk Based Approach (RBA) is used to improve the quality of supervision in order to prevent misuse of Non-Bank Payment System Service Providers and Non-Bank Money Changers as media for money laundering and / or terrorism financing.

The application of a Risk Based Approach (RBA) includes:

  1. Offsite and onsite risk-based supervision with risk ranking monitoring tools and RBA working papers;
  2. The Providers uses the RBA of AML CFT to conduct risk and operational assessments.

 

Guidelines for the Implementation of Risk Based Approach (RBA) for Non-Bank Money Transfer Services Providers and Non-Bank Money Changers can be downloaded here

Guidelines for the Implementation of Risk Based Approach (RBA) for Non-Bank E-Money and E-Wallet Issuers also Non-Bank Issuers of Card Based Payment Instrument can be downloaded here

 

Guideline on Know Your Customer (Customer Due Diligence) for Non-Bank Payment System Services Providers and Non-Bank Money Changers

In general, the procedures and mechanisms of Customer Due Diligence (CDD) implementation are regulated in accordance with the PBI AML CFT. To facilitate greater understanding amongst Service Providers in terms of meeting and conducting CDD as mandated by the PBI AML CFT, Bank Indonesia published the CDD guidelines for Non-Bank Payment System Providers and Non-Bank Money Changers.

Some highlights in the CDD guidelines are as follows: 

  1. CDD guidelines are a reference that must be followed by Providers in implementing the CDD process for Service Providers, Service Users and beneficial owners, both conventional and electronic CDD (e-CDD).
  2. The application of e-CDD is the same as the application of conventional CDD, namely Simple CDD, Standard CDD, and Enhanced Due Diligence (EDD), by carrying out 4 (four) stages, namely identification, verification, on-going due diligence, and understanding the intentions and the purpose of the relationship.
  3. Providers implementing e-CDD, in principle, must comply with the rules regarding CDD implementation that have been stipulated in the PBI AML CFT, including applying e-CDD to Beneficial Owners.
  4. In case Service Provider carries out one of the e-CDD processes, the implementation of the process shall be carried out with due observance of the implementation of the e-CDD process which is stated in this Guideline. 

 

Guidelines of Know Your Customer/Customer Due Diligence (CDD) Principles for Non-Bank Payment System Service Provider and Non-Bank Money Changer can be downloaded here.

 

List of Suspected Terrorists and Terrorist Organizations (DTTOT)

Based on Act No. 9 of 2013 on the Prevention and Eradication of Terrorism Financing (TF Act), terrorism financing is the use of assets directly or indirectly for terrorism activities. The scope of TF includes actions that are carried out directly or indirectly in the context of providing, collecting, giving or lending funds to other parties which are known to be used to commit terrorism, either from assets that are the proceeds of crime or from assets that are legally obtained. 

Guideline on Know Your Customer (Customer Due Diligence) for Non-Bank Payment System Services Providers and Non-Bank Money Changers

In general, the procedures and mechanisms of Customer Due Diligence (CDD) implementation are regulated in accordance with the PBI AML CFT. To facilitate greater understanding amongst Service Providers in terms of meeting and conducting CDD as mandated by the PBI AML CFT, Bank Indonesia published the CDD guidelines for Non-Bank Payment System Providers and Non-Bank Money Changers.

Some highlights in the CDD guidelines are as follows: 

  1. CDD guidelines are a reference that must be followed by Providers in implementing the CDD process for Service Providers, Service Users and beneficial owners, both conventional and electronic CDD (e-CDD).
  2. The application of e-CDD is the same as the application of conventional CDD, namely Simple CDD, Standard CDD, and Enhanced Due Diligence (EDD), by carrying out 4 (four) stages, namely identification, verification, on-going due diligence, and understanding the intentions and the purpose of the relationship.
  3. Providers implementing e-CDD, in principle, must comply with the rules regarding CDD implementation that have been stipulated in the PBI AML CFT, including applying e-CDD to Beneficial Owners.
  4. In case Service Provider carries out one of the e-CDD processes, the imple

 

mentation of the process shall be carried out with due observance of the implementation of the e-CDD process which is stated in this Guideline.

Guidelines of Know Your Customer/Customer Due Diligence (CDD) Principles for Non-Bank Payment System Service Provider and Non-Bank Money Changer can be downloaded here .

 

List of Suspected Terrorists and Terrorist Organizations (DTTOT)

Based on Act No. 9 of 2013 on the Prevention and Eradication of Terrorism Financing (TF Act), terrorism financing is the use of assets directly or indirectly for terrorism activities. The scope of TF includes actions that are carried out directly or indirectly in the context of providing, collecting, giving or lending funds to other parties which are known to be used to commit terrorism, either from assets that are the proceeds of crime or from assets that are legally obtained.

Suspicious Financial Transactions on TF are: 

  1. Financial transactions with the intent to be used and / or which are known to be used to commit terrorism; or 
  2. Transactions involving Persons or Corporations whose name is listed in DTTOT.

 

Legal Provisions Relating to the DTTOT 

  1. Act No. 9 of 2013 on the Prevention and Eradication of Terrorism Financing (TF Act);
  2. Joint Regulation of the Supreme Court, the Indonesian Minister of Foreign Affairs, the Chief of Police, the Head of the National Agency for Counterterrorism (BNPT) and Head of the Financial Transaction Reporting and Analysis Center (PPATK) on the Inclusion of Identity of Persons and Corporations in DTTOT and Immediate Blocking of the Funds of Persons or Corporations whose name is Listed in DTTOT;
  3. Bank Indonesia Regulation (PBI) No. 19/10/PBI/2017 concerning the Implementation of Anti-Money Laundering and Countering Terrorism Financing for Non-Bank Payment System Service Providers and Non-Bank Money Changers (PBI AML CFT). 

 

In accordance with Financial Action Task Force (FATF) Recommendation No. 6, Bank Indonesia forwarding the Indonesian National Police letter related to DTTOT information and blocking orders to all Non-Bank Payment System Service Providers and Non-Bank Money Changers, followed up with the obligation to immediately blocking all funds owned or controlled, by any person or corporation listed in the DTTOT. Guidelines on the implementation of immediate blocking of fund owned by individuals or corporations the identities of which are listed in the list of suspected terrorists and terrorist organizations can be downloaded here

The complete list of Suspected Terrorists and Terrorist Organizations (DTTOT) and the Immediate Blocking of Funds owned by Persons or Corporations Listed in DTTOT can be downloaded here

 

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List of Proliferation of Weapon of Mass Destruction Financing

Based on the Joint Regulation of Minister of Foreign Affairs of the Republic of Indonesia, the Head of the Indonesian National Police, the Head of the Financial Transaction Reports and Analysis Center, and the Head of the Nuclear Power Supervisory Agency, the proliferation of weapons of mass destruction is the spread of nuclear, biological, and chemical weapons, both with assets that constitute proceeds from a crime or from assets obtained legally.

Legal Provisions Relating to the Proliferation of Weapons of Mass Destruction

  1. Joint Regulation of the Minister of Foreign Affairs of the Republic of Indonesia, Head of the Indonesian National Police, Head of the Center for Reporting and Analysis of Financial Transactions, and Head of the Nuclear Energy Supervisory Agency on Inclusion of Identity of Persons and Corporations in the List of Funds for the Proliferation of Weapons of Mass Destruction and Blocking and Accidental Ownership of Owned Funds or Corporations that are listed on the list of funding for the proliferation of weapons of mass destruction.
  2. Bank Indonesia Regulation (PBI) No. 19/10/PBI/2017 concerning the Implementation of Anti-Money Laundering and Countering Terrorism Financing for Non-Bank Payment System Service Providers and Non-Bank Money Changers (PBI AML CFT). 

 

In accordance with Financial Action Task Force (FATF) Recommendation No. 7, Bank Indonesia transmits information on the proliferation of weapons of mass destruction from PPATK to the providers and is followed up with the obligation to immediately block all funds owned or controlled, directly or indirectly, by persons or Corporations based on the Register of Proliferation of Weapons of Mass Destruction. Guidelines on the implementation of immediate blocking of fund owned by individuals or corporations the identities of which are listed in the list of funding of proliferation of weapons of mass destruction can be downloaded here

The complete List of Proliferation of Weapons of Mass Destruction Financing can be downloaded hereFlow_Proliferation_of_Weapon_of_Mass_Destruction_Fin.PNG
 

 

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