Money Laundering threats may stem from gaps in the financial system legislation and prevelant regulation. Risks may emerge from corruption and taxation cases, followed by drug trafficking, and to a lesser extent illegal logging, wildlife trafficking, theft, bank fraud, embezzlement, credit card fraud, and the sale of counterfeit goods. Proceeds from these predicate crimes are laundered through the banking, capital markets, real estate, and motor vehicle sectors. Proceeds are also laundered offshore in regional jurisdictions and then repatriated to other countries, including Indonesia, as needed.
However, since the turn of the century, the government has stepped up its efforts to fight financial crime and promote anti-money laundering in Indonesia through legislation. Now Indonesia has been making progress to counter vulnerabilities as authorities continue to release regulations geared towards a risk-based approach and there is, generally, a high level of technical compliance with AML standards.
In 2002, early efforts were marked by the introduction of the Pusat Pelaporan dan Analysis Transaksi Keuangan (PPATK), Indonesia’s financial intelligence unit, and passage of legislation specifically targeting money laundering and associated crimes like the financing of terrorism.
In keeping with the fight against money laundering and terrorist financing, Wallex adheres to high standards of risk prevention and abides by the Anti Money Laundering & Countering Financing of Terrorism Laws and Regulations. Here is an overview of how Wallex detects and prevents financial crimes especially in relation to money laundering and financing of terrorism.
AML Compliance in Indonesia
In strengthening its AML regulations and working towards the standards set out in the FATF’s 40 Recommendations, Indonesia’s banks and financial institutions take a risk-based approach to the money laundering threats they face. The risk-based approach is central to FATF AML policy and involves assessing the risk posed by individual customers and clients. In practical terms AML compliance programs in Indonesia must;
- Implement appropriate customer due diligence (CDD) measures in order to identify customers and clients. Enhanced due diligence measures are also necessary for high-risk customers.
- Screen customers against international sanctions list, adverse media, and politically exposed persons (PEP) lists.
- Appoint a dedicated AML compliance officer to oversee the internal AML program.
Know Your Client (“KYC”)
Know Your Client (“KYC”) requirements in Indonesia are grounded in Law No. 8 of 2010 regarding the Prevention and Eradication of the Criminal Act of Money Laundering (“AML Law”). The AML Law requires financial services providers like Wallex to implement KYC principles in accordance with the provisions stipulated by the supervisory institutions of each financial services provider.
Wallex KYC flow
The KYC procedures at financial services providers must at a minimum accomplish the following:
- service user identification;
- verification of service user; and
- monitoring of service user’s transactions.
In supporting the Customer Due Diligence process, Wallex also cooperates with:
#Pusat Pelaporan dan Analysis Transaksi Keuangan (PPATK):
The Indonesian Financial Transaction Reports and Analysis Centre or PPATK is a government agency of Indonesia, responsible on financial intelligence. The agency is formed in 2002 to counter suspected money laundering and provide information on terrorist financing.
Wallex works closely with PPATK for the customer PEP screening process.
#Dinas Kependudukan dan Pencatatan Sipil (Dukcapil)
Wallex is currently in the process of working with Dukcapil to verify and identify population data for prospective customers.
Implementation of Anti Money Laundering & Countering Financing of Terrorism Laws and Regulations
Wallex conforms to a high ethical standard. The compliance team is fully committed to observe the Laws on the Criminal Act of Money Laundering and all related laws and regulations and will identify Suspicious Financial Transactions by carrying out:
- user transaction monitoring;
- transaction analysis; and
- determination of transactions as Suspicious Financial Transactions.
Wallex may consider one or more indicators, as well as other relevant indicators in monitoring whether its controls are being implemented effectively and deciding whether improvement is needed including:
- A sudden increase in business from a User, for example, the same User registers and/or is in multiple company deeds that will open an account;
- Non-specific transactions that do not match the activities and business profiles known to the User;
- There is a lot of activity on the account suddenly at a certain location or at a certain time; or the type of User transactions are unaccountable and odd.
- Compliance & AML/CFT staff pay attention to all transactions in the form of complex or unusual transactions with large nominal or unusual transaction patterns that do not have a clear economic or legal purpose.
- The background and purpose of each transaction must be informed. If there is a transaction that is considered suspicious, the Staff immediately reports it to the Compliance Manager, so that an investigation can be carried out to determine whether it is necessary to file a suspicious transaction report.
Wallex Indonesia is a licensed remittance company under the regulation of Bank Indonesia License number: 20/235/DKSP/83.
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