NEW LAW ON ANTI MONEY LAUNDERING
The President has signed a new law on Money Laundering. The new law is Law No. 8/2010”, and it replaces Law no: 15/2002 on Money Laundering Criminal Act (as amended by Law no: 25/2003, or “Law No. 15/2002”).
Although the old Law No. 15/2002 has had positive impacts such as increased public awareness of money laundering and the country profile’s improved global image, the government saw the need for a more effective law which meets international standards and which provides legal certainty and effective legal enforcement tools including those for asset tracing and recovery of lost proceeds.
In the drafting of Law No. 8/2010 the government took the recommendations of OECD-Financial Action Task Force 40 + 9 (intergovernmental group for the development of policies against money laundering and terrorist financing).
The following are highlighted features of the New Law in comparison to the replaced old law:
- Wider definition of “financial transaction”. The expanded new definition reads as: “to conduct or receive placements, deposits, payments, withdrawals, transfers , grants, donations, deposits for safekeeping, and/or exchange of sums of money or other acts or activities associated with money”;
- Expanded range of the criminal activities being the source of wealth. The activities now include activities that were not covered by Law No. 15/2002 such as customs and excise and fisheries;
- Expanded meaning of “financial providers” to include not only traditional financial providers but also institutions like pawn shops, organizers of E-Money/E-Wallet, companies engaging in commodity futures trading, business remittance providers and pay card organizers;
- More stringent sanctions for violators;
In addition, the New Law contains elaborated provisions that are spread out in its 14 Articles (Article 3 through 16) on criminal acts, reporting and compliance supervision, application of the KYC principles, the government agency in charge (Indonesian Financial Transaction Reports and Analysis Center, “PPATK/INTRAC”), transaction investigation and suspension, and prosecution and witness protection.
Financial service providers have the obligation to report the following activities to INTRAC:
i. suspicious financial transactions;
ii. cash financial transactions of Rp 500.000.000,00 or more, whether in one or several transactions, in one day;
iii. financial transactions and transfers of fund from and to abroad.
The following transactions are excluded from the above:
i. transactions between financial service providers and the government or and the central bank;
ii. transactions for the payment of salary or pension;
iii. other transactions specified by the Head of INTRAC
The President ratified the New Law on 22 October 2010, upon which this law became immediately effective. (by: Hamud M. Balfas/Ilham Wahyu)