Implementation of the Anti-Money Laundering (AML) and Counter Terrorism Funding (CTF)

Along with current banking operations which are characterized by increasingly complex products and banking activities offered, as well as increased banking operations, this condition increases the risk of the Bank as a medium or the purpose of money laundering and terrorism financing activities.

• In order to prevent Banks from being subjected to money laundering and terrorism financing activities, the Bank is subject to:
• Law No. 8 of 2010 concerning Counter and Eradication of Money Laundering Crimes.
• Law No. 9 of 2013 concerning Counter and Eradication of Terrorism Funding Crimes.
• Bank Indonesia Regulation No. 14/27 / PBI / 2012 dated December 28, 2012 and Bank Indonesia Circular No. 15/21 / DPNP dated June 14, 2013 concerning the Application of Anti-Money Laundering and Counter Terrorism Funding Programs for Commercial Banks, which requires all Banks in Indonesia to implement Anti-Money Laundering (AML) and Counter Terrorism Funding(CTF) programs.

In order for the implementation of anti-money laundering and Counter Terrorism Funding programs to be effective, the Bank has done the following:

1. Policies and Procedures, which include:

• Acceptance and identification of Customers (including Beneficial Owners)
• Customer Due Diligence (CDD) or the application of the principles of Know Your Customer (KYC) and Enhance Due Diligence (EDD)
• Risk Based Approach (RBA) Implementation
• High risk area and Politically Exposed Person (PEP)
• Implementation of CDD / KYC by third parties
• Monitoring and reporting
• Fund transfer procedure
• Management information System
• Human Resources and training
• Internal Control

2. Management Supervision

 The Bank's Directors are responsible for ensuring that the application of the AML-CTF Principles runs effectively in the following ways:

• Ensure the Bank has AML-CTF program policies and procedures;
• Propose a written policy on the AML-CTF program to the Board of Commissioners;
• Ensure the implementation of the AML-CTF program in accordance with written policies and procedures that have been set;
• Establish a special work unit that implements the AML-CTF program and / or appoint Officials responsible for the AML-CTF Program at the Head Office;
• Supervise the compliance of the work unit in implementing the AML-CTF program;
• Ensure that branch offices must have a special work unit and have:
  1. Employees who perform special work unit functions; or
  2. Officials overseeing the implementation of the AML-CTF program.
     • Ensure that written policies and procedures regarding the AML-CTF program are in line with the changes and development of Bank products, services and technology and in accordance with the development of the mode of money laundering or terrorism financing;
     • Ensure that all employees, especially employees of the relevant work units and new employees, have participated in training related to the AML-CTF program on a regular basis.

 Supervision of the Board of Commissioners is:

• Approve policies on the AML-CTF program;
• Monitor the implementation of the duties and responsibilities of the Board of Directors in implementing the AML-CTF program.

3. Human Resources and Training

 To produce human resources that have adequate knowledge in carrying out their duties, the Bank is obliged to provide training programs for all its employees in the AML-CTF field. The scope of the training material includes the following:

• Implementation of legislation related to the AML-CTF program;
• Typology of money laundering and terrorism funding; and
• Internal policies and procedures for implementing the AML-CTF program and the roles and responsibilities of employees in combating money laundering and financing of terrorism.

4. Audit and Compliance

 To test the effectiveness that the implementation of the AML-CTF program has been carried out in accordance with the applicable provisions, periodic monitoring by independent parties is required by the Internal Audit and External Audit, complete, and intact.