Implementation of Anti-Money Laundering (AML), Counter Financing of Terrorism (CFT), and Counter Proliferation Financing (CPF) of Weapons of Mass Destruction Programs.
With the increasing complexity of banking products, activities, and information technology, the risk of banks being exploited as conduits or targets for money laundering, terrorism financing, and the funding of weapons of mass destruction proliferation has significantly escalated. In response to these evolving threats, banks are required to comply with the following legal frameworks:
- Law of the Republic of Indonesia Number 8 of 2010 concerning the Prevention and Eradication of Money Laundering Crimes;
- Law of the Republic of Indonesia Number 9 of 2013 on the Prevention and Eradication of the Crime of Financing of Terrorism;
- OJK Regulation (POJK) No. 8 of 2023 dated 14 June 2023, regarding the Implementation of Anti-Money Laundering (AML), Counter-Terrorist Financing (CFT), and Counter-Proliferation Financing of Weapons of Mass Destruction (CPF) Programs in the Financial Services Sector.
To enhance the effectiveness of these programs in the financial services sector, the bank has established a robust infrastructure and systems based on the following Five Pillars:
Five Pillars of AML, CFT, and CPF Program Implementation
- Active Supervision by the Board of Directors and Commissioners
- Ensure the bank has established and maintains comprehensive policies and procedures for AML, CFT, and CPF programs.
- Propose written policies and procedures concerning AML, CFT, and CPF programs to the Board of Commissioners.
- Approve and formalize technical policies and procedures for the implementation of AML, CFT, and CPF programs.
- Ensure that the implementation of AML, CFT, and CPF programs is consistent with the established written policies and procedures.
- Establish a Special Working Unit (UKK) or designate an official responsible for AML, CFT, and CPF programs.
- Supervise the compliance of work units with AML, CFT, and CPF programs.
- Ensure that written policies and procedures are aligned with developments in products, services, and technology in the financial services sector and respond to evolving money laundering, terrorism financing, and proliferation financing methods.
- Ensure that officials and employees, particularly those in relevant work units and new hires, receive training related to AML, CFT, and CPF programs.
- Ensure that the implementation of AML, CFT, and CPF programs is regularly discussed in Board of Directors meetings.
- Ensure an effective audit function to review and evaluate the adequacy of controls in preventing money laundering, terrorism financing, and the financing of weapons of mass destruction proliferation.
- Establish a management information system tailored to the bank's business nature, size, and complexity.
- Ensure that issues related to AML, CFT, and CPF are promptly identified and addressed.
- Active Supervision by the Board of Commissioners
- Ensure that the bank has established policies and procedures for AML, CFT, and CPF programs.
- Evaluate the policies and procedures for the implementation of AML, CFT, and CPF programs.
- Approve AML, CFT, and CPF program policies.
- Oversee the Board of Directors' responsibilities in implementing AML, CFT, and CPF programs, including commitments made to regulators and supervisors in Indonesia.
Policies and Procedures
The bank has established comprehensive policies and procedures that include:
- Implementation of a Risk-Based Approach (RBA).
- Collection of information and supporting documents from Prospective Customers/Customers/WIC (Customer Due Diligence/CDD and Enhanced Due Diligence/EDD).
- Identification and verification of Beneficial Owners.
- Document verification procedures.
- Simplified CDD processes.
- Provisions for high-risk customers, clients, and Politically Exposed Persons (PEPs).
- Ongoing customer data updates and transaction monitoring.
- Implementation of CDD by Third Parties.
- Procedures for rejecting transactions and closing relationships.
- Handling Walk-in Customers.
- Cross-Border Correspondent Banking (CBCB) arrangements.
- Payable Through Account (PTA) management.
- Funds transfer procedures.
- Management information system protocols.
- Reporting requirements.
- Collaboration with law enforcement agencies.
- Anti-tipping off measures.
- Transaction monitoring, delay, and suspension procedures.
- Human Resources and employee training programs.
- Implementation of AML, CFT, and CPF protocols within office networks and subsidiaries.
- Collaboration with supporting professions.
- Data and information provision.
- Document administration protocols.
- Internal control measures.
- Know Your Employee (KYE) procedures.
Internal Control
To ensure the effectiveness of the AML, CFT, and CPF program implementation, periodic monitoring by independent parties, including Internal and External Audits, is required to evaluate compliance with applicable regulations.
Management Information System
To effectively monitor customer profiles and transactions, the bank has developed an Information System capable of monitoring, identifying, analyzing, and reporting risk-based transaction characteristics.
Human Resources and Training
To ensure that the bank's human resources possess the requisite expertise and knowledge for their roles, the bank is mandated to provide comprehensive training programs for all employees in the areas of AML, CFT, and CPF. The training program covers the following:
- Implementation of laws and regulations related to AML, CFT, and CPF programs.
- Typologies of money laundering, terrorism financing, and the financing of weapons of mass destruction proliferation.
- Internal policies and procedures for AML, CFT, and CPF programs, as well as the roles and responsibilities of employees in combating these crimes.
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