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Print articleNew, Broader Anti Money Laundering Law in Indonesia
May, 2011 -
Money laundering
The AML Law defines a range of criminal acts as money laundering, including the hiding of assets or their provenance or ownership and/or various types of transfer or exchange of assets with the intent of hiding their provenance. The transferor or hider must be aware or should have suspected the assets were the proceeds of certain defined crimes, including a catch-all for crimes attracting a penalty of four or more years in jail. The underlying crimes which form the basis of a money laundering charge include crimes committed outside of Indonesia, where those actions are also considered a crime according to Indonesian law (double criminality).
The receipt of qualifying transfers is also a crime if the recipient knows or should have known that the assets were proceeds of crime, unless the recipient reports the receipt thereof. A corporation can be guilty of money laundering in certain circumstances where the crime is committed by a Corporate Controller. Attempted money laundering, aiding money laundering and criminal conspiracy to launder money are also criminal offences.
Reporting obligations
The new AML Law imposes reporting and other obligations on a wider range of designated Reporting Parties. The new list includes a wider range of financial services providers, which now extends also to card-payment providers, e-money providers, savings and loans cooperatives, pawn services providers, commodities future traders, and money forwarders. It also requires certain providers of goods and other services to report: property companies and agents; car dealers; traders of jewels and jewellery, precious metals; traders of art and antiques; and auction houses.
Designated Reporting Parties must comply with the know-your-customer principles stipulated by the relevant regulatory or advisory agency. If there is no institutional regulator in a particular field, the regulator (PPATK) may stipulate KYC guidelines. We note there are already several KYC guidelines for specific sectors. Customers must provide documents and information to Reporting Parties which can explain at least the identities of the customers, their sources of funds, and the purposes of their transactions, or the same information about the beneficial party if conducted on behalf of someone else. Documents and notes regarding the identity of customers must be kept for 5 years after the relationship ends.
In addition to the record keeping and customer identification obligations, Reporting Parties who are financial services providers must report suspicious transactions and cash transactions equivalent to or in excess of 500 million Rupiah. Designated Reporting Parties who are categorized as providers of other services and of goods must report all transactions over 500 million Rupiah or its equivalent in another currency.
All persons carrying cash or other instruments in the equivalent of 100 million Rupiah or more into or out of the Indonesian customs area must report it. A 10% fine up to 300 million Rupiah may be applied for failure to report.
The Head of the Financial Transactions Analysis and Reporting Centre issued an implementing regulation (Per-07/1.02/PPATK/12/10) on Administrative Procedures for Reporting Suspicious Financial Transactions for Financial Services Providers effective as of 21 December 2010. It sets out an online reporting system which applies to the range of financial services providers as set out under the new AML Law. Commercial banks should comply as of 31 January 2011 and some of the other listed financial services providers should comply as of 31 March 2011.
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