Regulatory context. Recent progress on key aspects of Indonesia's anti‐money laundering regime: a narrative analysis
| DOI | https://doi.org/10.1108/13685201211238025 |
| Published date | 06 July 2012 |
| Pages | 257-266 |
| Date | 06 July 2012 |
| Author | Rusmin Rusmin,Alistair M. Brown |
| Subject Matter | Accounting & finance |
Regulatory context
Recent progress on key aspects of Indonesia’s
anti-money laundering regime: a narrative
analysis
Rusmin Rusmin and Alistair M. Brown
School of Accounting, Curtin University, Perth, Australia
Abstract
Purpose – Based on semi-structured interviews with current senior officers of the Indonesian Police
Force, Indonesian Attorney General’s Office and the Indonesian Financial Transaction Reports and
Analysis Centre (Pusat Pelaporan dan Analisis Transaksi Keuangan), the purpose of this paper is to
consider the regulator context and governance of some key issues in Indonesia’s anti-money
laundering (AML) regime: the progress of “know your customer” implementations and the crackdown
on foreign bribery.
Design/methodology/approach – Interviewing respondents from key Indonesian agencies
involved in the AML regime, the authors used semi-structured interviews to develop a narrative
analysis of the research questions.
Findings – The results of the narrative analysis suggest all three agencies are satisfied with the
effectiveness of “know your customer” regulations, particularly in their capacity to heighten
awareness. All respondents, however, were a little more circumspect on the foreign bribery crackdown.
Practical implications – The paper shows that at best, mutual legal assistance provided help for
transaction reports and analysis. At worst, it appears foreign bribery issues are an intractable
problem. It is concluded that policy tools need to be contextualised within Indonesia’s socio-economic
realities rather than wholly struck from western fields.
Originality/value – Fresh “insider” insights were gleaned about the current state of play regarding
“know your customer” principles and the clampdown on foreign bribery. This is of value to many
parties involved in the advancement of AML, both within and outside Indonesia.
Keywords Indonesia, Statepolice, Governance, Regulation,Money laundering control, Bribery,
Indonesian policeforce, Indonesian Attorney General’sOffice,
Indonesian Financial TransactionReports and Analysis Centre, Know YourCustomer, Foreign bribery
Paper type Research paper
1. Introduction
Despite the troublesome application of anti-money laundering (AML) regulation across
many countries from distance fields as a form of global governance, the advancement
of AML regulation based on US AML principles holds firm for developing nations,
such as Indonesia (Hu
¨lsse, 2008; Holder, 2003). This approach is based on the notion
that borrowed regulation from overseas together with foreign collaboration with
regional organisations can lead to effective AML and counter-terrorism management
for the benefit of all countries (Chatain et al., 2009).
The popularity of this approach rests on the assumption that foreign expertise on
AML is grounded on superior knowledge (Kerwer and Hulsse, 2011). Through a
discussion of the AML regime in Indonesia, the article considers the following research
questions: first, how effective have the implementation of “know your customer (KYC)”
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Indonesia’s
AML regime
257
Journal of Money Laundering Control
Vol. 15 No. 3, 2012
pp. 257-266
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685201211238025
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