Government to sign new decree on money laundering
Government to sign new decree on money laundering
A'an Suryana
The Jakarta Post
Jakarta
Minister of Finance Boediono is expected to sign an anti-money
laundering decree on Jan. 31 requiring non-bank financial
institutions to apply certain measures to help fight money
laundering practices.
"The decree will take effect immediately after it has been
signed," director general of financial institutions Darmin
Nasution told reporters on Wednesday on the sidelines of a
meeting with industry players.
Details of the new decree are not yet available. The decree
basically forces non-bank financial institutions like insurance
companies, pension funds, multi-finance firms, and investment
funds to apply a "know your customers" principle, an
internationally accepted practice.
This means that the above companies must apply a set of
systems and procedures to obtain information on where customers
get their money from to help avoid money laundering activities.
They must report any suspicious transactions.
The government would impose sanctions on companies that fail
to comply with the above requirement.
The finance ministry is currently seeking input from industry
players before it finalizes the new ruling.
The banking industry has already applied the above principle.
The requirement is part of a set of measures demanded by the
international Financial Action Task Force (FATF) on money
laundering to remove Indonesia from its list of countries deemed
uncooperative in the world's drive to fight money laundering.
Money laundering is the practice of transferring funds
generated from criminal activities like drug-related crime,
smuggling, corruption, human trafficking, and gambling into
legitimate businesses or investments.
The drive to fight money laundering has also now been linked
to efforts to cut financing for terrorist activities.
Currently there are 15 countries included in the Paris-based
FATF black list.
Large-scale money laundering activity may occur in countries
like Indonesia because economic and business transactions are
largely cash based.
The government has said that it hoped to be excluded from the
list at the next FATF meeting slated for February. The ruling
would add to a series of measures already taken by the government
with the purpose of having the country's name cleared.
They include the passage of the Anti-Money Laundering Law in
April last year and the establishment of the Financial
Transaction and Report Analysis Center (PPATK) in December to
take charge of analyzing and investigating suspicious financial
transactions both by individuals and corporations.