History of AML in Indonesia
Indonesia has a GDP of over 1 Billion United States Dollars, making the country the largest economy in South East Asia. Indonesia is also a member state of the G20 due to the country's economic wellbeing. However, the money flow through Indonesia makes the country vulnerable to financial crimes.
Indonesia started fighting financial crimes in 2002 with the establishment of PPATK, the country's financial intelligence unit, and upcoming years led to the introduction of more AML laws.
In 2012 FATF put Indonesia on the blacklist of countries with a high risk of money laundering and removed Indonesia from the list in 2015. FATF accepted Indonesia as an observer member in 2018.
Indonesia is also a member state of APG, an organization to localize FATF compliances in the Asia/Pacific region and an associate member of FATF.
AML Requirements in Indonesia
Indonesia takes a risk-based approach to deal with money laundering. AML Compliance programs in Indonesia must use
Screen Scanning
customers on International Sanctions List, Adverse Media, and PEPs lists.
Indonesian Regulators: PPATK
The main regulator of AML Compliance in Indonesia is PPATK (Pusat Pelaporan dan Analisis Transaksi Keuangan/ The Financial Transaction Reports and Analysis Center). The organization was established in 2002 by the Indonesian government. PPATK also co-operates many projects with AUSTRAC (Australian Transaction Reports and Analysis Center).
The bank of Indonesia, The Financial Services Authority, and OJK (Otoritas Jasa Keunangan) also play a considerable role in AML Compliance in Indonesia.
Indonesia on Anti-Money Laundering Indicators
United States Dept of State Money Laundering Assessments, FATF 40 + 9 Recommendations and Corruption Index put Indonesia in Higher Risk meanwhile Weakness in Government Legislation to Combat Money Laundering, and World Governance Indicators put Indonesia in Medium Risk.
FATF Recommendations and Indonesia
FATF is no longer monitoring Indonesia as the country established the legal requirements FATF had identified in 2010. The last mutual evaluation took place in 2018, and the following outcomes were stated;
The country was deemed
- Compliant for 6
- Largely Compliant for 29
Of the FATF 40 Recommendations.
The country was also deemed.
- Highly Effective for 0
- Substantially Effective for 5
Of the Effectiveness & Technical Compliance ratings.
Penalties for Money Laundering in Indonesia
Indonesia is taking serious action against financial crimes as financial crimes threaten the country's economic development. The GDP Per Capita of Indonesia is still behind the world average, so the country has a long way to go and takes finance-related crimes extremely seriously. Penalties for money laundering crimes depend on the type of crime and various circumstances, but the following statements can be expected for financial crimes;
- A fee of from 10 Billion up to 100 Billion Indonesian Rupiah
- Prison sentences up to 20 years
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