Bank Indonesia (BI) has issued a Circular, No. 11/31/DPNP with the express intent of providing a set of guidelines to facilitate the implementation of the anti-money laundering and prevention of terrorism funding program contained in BI Regulation No. 11/28/PBI/2009 issued on 1 July 2009.
These guidelines contain minimum standards that must be fulfilled by Indonesian banks to preparing guidelines on anti-money laundering programs and the prevention of terrorism financing to commercial banks. The standard guidelines include an attachment to the circular which cover 13 basic subject areas:
- Policy – Customer and Enhanced Due Diligence
- Risk Based Approach
- Receipt, Identification, and Verification
- Politically Exposed Persons
- Implementation Procedures
- Cross Border Correspondent Banking
- Fund Transfer Procedures
- Internal Controls
- Information Management Systems
- Human Resources and Employee Training
- Policies and Procedures for Implementation of Anti-Money Laundering and Prevention of Terrorism Funding Measures
- Document and Report Management
The guidelines go into some detail defining and explaining the manner in which certain transactions might be carried out in order to avoid detection. The guidelines explain the concepts of smurfing and cuckoo smurfing, among others. Smurfing is the avoidance of reporting requirements by breaking related transactions up into multiple amounts and under multiple names. In contrast, cuckoo smurfing involves the transfer of the proceeds of crime through a third party account where that third party is not aware that their account is being used to deal with the proceeds of crime.
The circular is effective as of 30 November 2009.