Indonesia's Cooperatives Face Rising Financial Crime Risk

Ministry Sounds Alarm on Money Laundering Vulnerability

Indonesia's Ministry of Cooperatives and Small-Medium Enterprises has raised concerns that cooperatives, particularly savings and loan cooperatives (KSP), are becoming targets for financial criminals involved in money laundering and terrorist financing. Deputy for Cooperative Supervision, Herbert H.O Siagian, highlighted that these cooperatives are increasingly being used for illicit financial activities.

Regulatory Measures to Combat Financial Crimes

To address these risks, the Ministry is working closely with the Financial Transaction Reports and Analysis Centre (PPATK), Indonesia's financial intelligence unit. As part of existing anti-money laundering regulations under Law No. 8/2010, KSPs are mandated to report suspicious transactions exceeding Rp 500 million to PPATK. This regulatory requirement aims to enhance transparency and prevent the misuse of cooperatives for financial crimes.

Enhanced Oversight and Compliance

The Ministry's efforts to strengthen oversight include better coordination with PPATK to monitor compliance among KSPs. By improving reporting mechanisms and ensuring adherence to anti-money laundering laws, authorities aim to mitigate the risks associated with cooperative financial activities.