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The Implementation of the Regulation of Bank of Indonesia To Prevent Money Laundering
The Principles of Knowing the Client must be implemented by all Financial Service Providers. By implementing
the Principles of Knowing the Client, the profiles and the characteristics of the prospective clients can be obtained and the practice of money laundering by those pretending as costumers can be avoided by the Financial Service Providers especially banks. The practice of money laundering results in dangerous effects not only to the banks involved but also to the countries where the banks are located which can be grouped into NCTT (Non Cooperative Countries and Territories) which may cause them to be classified as High Risk Countries. The adverse effects of being classified as High Risk Countries, among others are the overcharging of the transaction fees for all financial transactions from those countries and other countries may refuse Letter of Credit issued by those countries. In implementing the Principles of Knowing the Client banks encounter some problems or obstacles and have to find the solutions to overcome those problems. The objective of this study is to find out the implementation of the Principles of Knowing the Client in banks, the problems or obstacles encountered by the banks and how they solve the problems so that the implementation of the Regulation of Bank of Indonesia, namely PBI No. 5/21/PBI/2003 about the Principles of Knowing the Client can run well in accordance with the expectation of the government which is to avoid the abuse of banks as the instruments of the practice of money laundering. The method used in this study is empirical method which uses primary and secondary data, population and samples, and the descriptive analysis technique in analyzing the data. The result of the study shows that the Principles of Knowing the Client has been implemented by the banks and the banks still encounter problems in implementing this principles and they have strived to find ways to solve the problems. Considering the importance of the implementation of the Regulation of Bank of Indonesia PBI No. 5/21/PBI/2003, it is expected that Indonesian banks improve the quality of their human resources through intensive and continuous training and education for all their staff to improve their knowledge and skills especially in detecting a criminal deed in the form of money laundering. As the more sophisticated the technology of information becomes the more ways are available to the Launderer for carrying out their criminal acts. There must be an effort to improve legal awareness among the staff of financial institutions and the society, especially the clients of banks in order to obey the stipulation about the Principles of Knowing the Client. The government of Indonesia should implement the policy of having personal identity which is effective nation-wide for all citizens in which the Identity Number (ID) on ID Card/Driving License/Passport has a special unique code so that each ID is owned by one person only and the possibility of double identity can be avoided.
Published: March 15, 2008
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