On June 14, 2023, the Financial Services Authority (OJK) issued Regulation No. 8 of 2023, concerning Anti-Money Laundering (AML) Programs, Prevention of Terrorism Financing, and Prevention of Financing for Weapons of Mass Destruction (WMD) in the Financial Services Sector, replacing the previous Regulation No. 12/POJK.01/2017 and its amendment, Regulation No. 23/POJK.01/2019.
Under this new regulation (POJK 8), the scope of compliance extends beyond banks and financial institutions to include a wider range of businesses. POJK 8 introduces requirements for preventing the proliferation of WMD as a separate component of AML programs, necessitating policies and procedures to address AML, terrorism financing, and WMD prevention.
The regulation applies to various financial service providers, now encompassing a broader set of institutions compared to the previous regime. This includes banks, securities companies, insurance companies, microfinance institutions, and many others.
To comply with POJK 8, businesses must incorporate WMD prevention into their programs, ensure active supervision by the board of commissioners, appoint a person in charge based on their type, verify beneficial owners, and fulfill new reporting obligations to government agencies. The regulation also allows for temporary suspension of transactions involving criminal assets and introduces administrative sanctions for violations.
POJK 8 took effect on June 14, 2023, with existing financial service providers granted a 6-month grace period to adjust their programs. New providers have 12 months to comply. Businesses should carefully review the regulation’s requirements to establish or update their programs accordingly.
By FCCT Editorial Team
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