Prudential Banking Instruments

Prudential Banking Component will process information received from Internal Control and Audit Components to determine the following indicators:

• Implementation of international best practices for the company’s financial transaction, government agencies and individuals involved in the deforestation process and change of forest area function and forest area utilization.
• Customers financial transaction profile
• Analysis cash transaction report.
• Red flags for suspicious financial transaction
• Suspicious financial transaction

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The Actors:

1. Bank Indonesia

2. Financial Institutions

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National Regulations/Best Practices

• Bank Indonesia's web portal on Know Your Customer Principle and Anti Money Laundering Law:
   
• Bank Indonesia Regulation Nr. 3/10/PBI/2001 18 June 2001 Concerning The Implementation of Know Your Customer Principles
   
• Surat Edaran Gubernur Bank Indonesia No. 7/58/DPBPR/2005 tentang Penilaian dan Pengenaan Sanksi atas Penerapan Prinsip Mengenal Nasabah dan Kewajiban Lain Terkait dengan Undang-undang tentang Tindak Pidana Pencucian Uang (Reviewing and Sanctioning on Implementing Know Your Customer Principle and Other Related Duty in Anti Money Laundering Law)
   

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International Regulations/Best Practices

• The Equator Principles

  Initially this principle was initiated by a number of small banks, with IFC, at a meeting in London, October 2002.

  The theme of the meeting was discussing one general standard in relation to environment and social policy when dispensing financial credit for any kind of industry and can be adopted globally. The outcome of the meeting was issuance of Equator Principle which was launched on 4 June 2003. Until June 2006, there are 41 bank has adopted, increasing from 10 banks when this initiative has just begun.

  On 6 July 2006, revised edition of Equator Principle was launched to adjust them with document amendment of 'Performance Standards' as produced by IFC on 21 February 2006. Therefore, revision of Equator Principle has similarity with Environmental and Social documents in "Performance Standards" developed by IFC.

   

• Politically Exposed Persons [PEPs]

  PEPs principle first time came into existence as a response to the Ferdinand Marcos and his wife scandal case who kept money from corruption activity in Swiss banks. The fact that the money is illegal has ruined Swiss banks reputation. The effect was the Swiss bankers then started to pay attention to and created list of politically important and strong people in foreign countries both those who have become their customers and those who have not. The use of PEPs principle is still limited and not standardized.

  The use of PEPs principle becomes stronger corresponds to the enactment of Patriot Act, October 2001 as the consequences of terrorist attack on WTC twin tower in New York, 11 September 2001. PEPs handling is included in Section 312 of the Patriot Act. PEPs is used as an instrument.........[continue......]

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