Indonesia Anti-Money Laundering Law Advances

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Wednesday, May 1, 2002
Bruce Zagaris
On March 24, 2002, the House of Representatives in Indonesia passed an anti-money laundering bill that a criminalizes money laundering and establishes an independent Financial Transaction and Report Analysis Center (PPATK) that has responsibility for analyzing and investigating suspicious transactions and administering the anti-money laundering law. Once President Megawati Sukaarnoputri signs the bill, it will become law. The bill’s imminent enactment comes under pressure from the Financial Action Task Force (FATF), which has named Indonesia as one of the jurisdiction that does not meet the minimum international anti-money laundering standards, the consequence of which is that the countries around the world must pay enhanced scrutiny to all transactions coming from Indonesia. The efforts to enact legislation and proper government institutions and private sector systems are all part of an initiative to establish an anti-money laundering regime. The roles of the FATF, the Asia-Pacific Group on Anti Money Laundering, and the Asian Development Bank illustrate the importance of international organizations in designing and implementing the anti-money laundering regime. In particular, the role of the FATF in establishing and enforcing soft law standards increasingly exemplifies the proactive effects of international organizations.