How is Indonesia Revamping Its Anti-Money Laundering Regulations to Meet FATF Membership Demands?

Abstract

This research explores the impact of Indonesia's integration in the Financial Action Task Force (FATF) on its legal and regulatory framework in the financial sector. Membership in FATF requires strict compliance with global standards in fighting money laundering (AML) and countering the financing of terrorism (CFT). This study seeks to examine the necessary changes in Indonesian law to comply with FATF recommendations. Applying the law in the context method and qualitative analysis will specifically address the regulatory obstacles, policy factors, and consequences for financial institutions and stakeholders. This research seeks to gain insights into the process of legal adaptation and the effectiveness of current regulations in enhancing compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) measures, as well as mitigating risks associated with financial crime. The results of this study show Indonesia still has challenges and limitations, internal and external, in the AML/CFT implementation. Indonesia needs to refine and adjust its AML regulations following and as a consequence of the FATF membership. The result enhances comprehension of the changing financial regulation environment in Indonesia and provides valuable insights for policymakers, regulators, and stakeholders on effective strategies and best practices to tackle the challenges related to FATF membership.

Keywords: Anti-Money Laundering (AML), Financial Action Task Force (FATF), Indonesia, Regulations Adjustment