CHAPTER 4 SUCCESS OF MITIGATION MEASURES AGAINST MONEY
4.2 Mitigation Measures by INTRAC
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Graphic of Banking Crime Modes Identified during the Period of 2016 to 2018 based on Court Decisions
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4.2.2 Mitigation Measures have been conducted by INTRAC
INTRAC together with any and all stakeholders had issued guidelines for the reporting parties related to the Principles of Recognizing Service Users (PMPJ) of Customer Due Diligence (CDD). PMPJ or CDD is a principle shall be applied by the reporting party to find out the background and identity of service users, verify service users’ detail information, monitor transactions, and report the transactions to INTRAC. The importance of implementing PMPJ or CDD is as follows:
1. Mitigating the Risk of Money Laundering Crime
The provisions of the Principle of Recognizing Service Users (PMPJ) or CDD require all reporting parties to conduct a risk assessment on money laundering crime (risk-based approach) to entities and their service users. Through the application of the risk based approach, each reporting party must have adequate policies and procedures in order to mitigate money laundering crime risk based on the results of the risk assessment carried out by the relevant entity. The ultimate goal of implementing such risk mitigation is to reduce the money laundering crime risk on reporting parties.
2. Risk Management
The implementation of provisions of PMPJ or CDD is an important part of good risk management, especially reputation, operational, legal and concentration risks, which are all interrelated.
3. Compliance with statutory obligations
The obligation to apply PMPJ or CDD and reporting to reporting parties for the fulfillment of Act No. 8 of 2010 concerning Prevention and Eradication of Money Laundering Crimes, is the main legal basis for combating Money Laundering crimes.
4. Compliance with the Principles of Good Corporate Governance (GCG) To realize the principles of GCG,
namely the principles of transparency, accountability, responsibility, independence, fairness.
5. Incentives in Fostering Relationships with Service Users or Customers
By knowing the backgrounds and identities of service users as well as
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monitoring transactions conducted by them, it will provide added value for the reporting parties, especially in fostering good relations with service users. This is beneficial from the business aspect. Against prospective service users, good relations shall be maintained and improved.
6. Facilitate Management for Decision Making
In the application of PMPJ, the availability of customer or service user data, track records and various transactions carried out by them, as well as administration of good information documents, can be utilized to carry out various research including research on the business development of the reporting parties. Data accuracy and good data processing methods will produce important material for management in making decisions accurately and professionally.
Legislation regarding the obligation to implement the Principles of Recognizing Service Users (PMPJ), namely Article 18 of Act No. 8 of 2010 concerning Prevention and Eradication of Money Laundering, “Reporting Parties must apply the Principle of Recognizing Service Users determined by every Supervisory and Regulatory Board”.
Provisions regarding PMPJ or CDD are regulated in regulations issued by the Supervisory and Regulatory Board (LPP), including:
1. Regulation of the Head of INTRAC No. 6 of 2017 concerning Implementation of the Principle of Recognizing Service Users for Financial Planners.
2. Regulation of the Head of INTRAC No. 7 of 2017 concerning Implementation of the Principle of Recognizing Service Users for Other Goods and/or Services Providers.
3. Regulation of the Head of INTRAC No. 10 of 2017 concerning Implementation of the Principles of Recognizing Service Users for Advocates.
4. Regulation of the Head of INTRAC No. 11 of 2017 concerning Implementation of the Principles of Recognizing Service Users for Land Deed Making Officials.
5. Regulation of the Head of INTRAC No. 17 of 2017 concerning Implementation of the Principles of Recognizing Service Users for Postal Operators.
6. Regulation of the Minister of Finance No. 55 /PMK.01/2017 concerning Principles of Recognizing Service Users (PMPJ) for Accountants and Public Accountants as amended by Regulation of the Minister of Finance Number 155 / PMK.01 / 2017.
7. Regulation of the Head of BAPPEBTI No. 8 of 2017 concerning Implementation of the Anti-Money Laundering and Countering the Financing of Terrorism Program in Futures Brokers.
8. Regulation of the Minister of Finance No. 156/PMK.06/ 2017 concerning Principles of Recognizing Service Users for the Auction Hall.
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9. Regulation of Financial Services Authority No. 12/POJK.01/2017 concerning Implementation of Anti-Money Laundering and the Countering the Financing of Terrorism Program in Financial Services Sector.
10. Regulation of Bank Indonesia No. 19/10/PBI/2017 concerning Implementation of Anti- Money Laundering and Countering of the Financing of Terrorism for Non-Bank Payment System Service Providers and Non-Bank Foreign Exchange Business Providers.
11. Regulation of the Minister of Law and Human Rights No. 9 of 2017 concerning Implementation of the Principles of Recognizing Service Users for Notaries.
12. Regulation of the Minister of Cooperatives and SMEs No. 06/Per/M.KUKM/V/ 2017 concerning Implementation of the Principles of Recognizing Service Users for Cooperatives Conducting Savings and Loan Business Activities
In addition, INTRAC has also issued guidelines and conducted awareness program, training and technical guidance to the reporting parties including:
1) SRA of 2017 for Property Companies / Property Agents and Motor Vehicle Traders.
2) Sipatuh (Compliance Monitoring System) - Risk Ranking Tools.
3) Risk Based Supervision Guidelines: Offsite and Onsite Supervision.
4) Internal Policy Standards (SOP) on Implementation of risk-based Principles of Recognizing Service Users for Notaries for Goods/Services Providers.
5) Guidelines for Risk Assessment Calculation of Money Laundering and Financing of Terrorism Crimes for Goods/Services Providers.
6) Guidelines for Risk Assessment Calculation for Service Users/Customers of Goods/Services Providers.
7) Awareness program for Reporting Parties (including Goods/Services Providers).
8) Training of Goods/Services Providers (Property Companies/Property Agents and Motor Vehicle Traders).
9) Technical guidance for motor vehicles traders and property companies.