Indonesia has unveiled regulations aimed at busting money laundering and terror financing for money changers, credit-card and electronic money providers.
It is part of moves by the Indonesian authorities to bring rules up to international standards and sign up to the Financial Action Task Force (FATF), an international agency fighting money laundering.
Indonesia was removed from an FATF blacklist in 2015.
The Bank Indonesia rules cover transactions handled by non-bank financial institutions, supposedly handling a need to tackle money laundering and financial crimes linked to terrorism and to boost economic growth.
Operators breaching the rules could be banned from the financial services business for five years.
The central banks chief payments regulator Eny V Panggabean said the rules also examined ”developments in the industry, digital economy and innovations in payments that include a more complex money changer business”.
The regulations cover remittance and money transfer companies and fintech or financial technology startups.
Firms must keep up-to-date list on alleged militants, radical groups and those linked to the proliferation of weapons of mass destruction to cross-check their customers.
Businesses must also assess client risk depending on where an incoming transfer is coming from or the destination of outgoing payments, and must not engage with shell banks, which do not have a physical office or operation in that country.
Anything suspicious should be reported to the financial watchdog, the regulations said.
Similar regulations were introduced earlier this year by the Financial Services Authority for financial conglomerates, banks, insurance providers and other major firms.
Indonesia was listed by FATF for weak measures to combat money laundering and terror financing in 2012. Two years ago the FATF declared Indonesia off the blacklist due to improved regulations.
In other improvements, Indonesia’s rank in the World Economic Forum’s 2017 Global Human Capital Index due to educational progress.
Indonesia now ranks 65th out of 130 countries assessed, compared with 72nd last year.
Singapore came 11th, Malaysia 33rd and Vietnam 64th.
“Vietnam and Indonesia have made remarkable progress in educational attainment among their younger generations and have a correspondingly solid outlook for building their future human capital potential,” the forum’s report said.
The Global Human Capital Index ranks countries according to how well they develop human resources through formal education, deployment, how skills are applied at work and efforts to improve the current workforce.
The report confidently said the world had 62 per cent of its human capital developed, while the rest was being squandered.
Jakarta’s financial district has been cleaning up its act. Picture credit: Wikimedia