Indonesia

New Documents

The Australian Transaction Reports and Analysis Centre, the Philippines’ Anti-Money Laundering Council and the Indonesian Financial Transaction Reports and Analysis Centre issued a joint communiqué on the outcomes of the 5th Counter-Terrorism Financing Summit.

The Australian Transaction Reports and Analysis Centre issued a joint media release with the Philippines’ Anti-Money Laundering Council and Indonesia’s financial intelligence unit highlighting the upcoming fifth Counter-Terrorism Financing Summit in the Philippines.

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Important Facts

  • The U.S. State Department labels Indonesia as a major money laundering country. Indonesia remains vulnerable to money laundering and terrorist financing because of gaps in financial system legislation and regulation, a cash-based economy, weak rule of law, and partially ineffective law enforcement institutions. Most money laundering in Indonesia is connected to corruption and taxation cases, followed by drug trafficking, illegal logging, wildlife trafficking, theft, bank fraud, credit card fraud, embezzlement, and the sale of counterfeit goods. Indonesia has a long history of vulnerabilities related to the smuggling of illicit goods and bulk cash, which is made easier by thousands of miles of unpatrolled coastlines, sporadic and taxed law enforcement, and poor customs infrastructure. Proceeds from illicit activities are also easily laundered offshore and repatriated as needed for commercial and personal use. Indonesia is making progress to counter its vulnerabilities, but endemic corruption remains a significant concern and poses a challenge for anti-money laundering and counterterrorist financing regime implementation in Indonesia. Also, the fight against narcotics-related money laundering is hindered due to the lack of analytical training for law enforcement personnel and insufficient training on money laundering detection for lower-level workers in the financial services sector. Know-your-customer requirements have been part of Indonesia’s anti-money laundering regime since 2001, and politically exposed persons are subject to enhanced due diligence in the country. From January 2019 through June 2019, Indonesia achieved no convictions for money laundering. However, the State Department noted that the Indonesian government lacks sufficient practices or procedures to collect high-quality conviction statistics, so this figure may not capture all convictions. During this same time period, the country's financial intelligence unit referred 248 analysis documents derived from suspicious transaction reports to investigators, the majority of which were alleged corruption cases.
-Source: 2020 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i

Technical Effectiveness
Compliant : 4 High :
Largely Compliant : 8 Substantial :
Partially Compliant : 22 Moderate :
Non-Compliant : 14 Low :
Not-Applicable : 1

BASEL i

Rank : 96/141
Score : 4.62/10

TRANSPARENCY INTERNATIONAL i

Rank : 85/180
Score : 40/100

Tax Justice Network i

Rank : 79/133
Score : 51/100