Regulation of the Commodity Futures Trading Supervisory Agency Number 5 of 2023 Concerning Guidelines for Preventing the Financing of Proliferation of Weapons of Mass Destruction by Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders

REGULATION OF THE COMMODITY FUTURES TRADING SUPERVISORY AGENCY REPUBLIC OF INDONESIA NUMBER 5 OF 2023 CONCERNING GUIDELINES FOR PREVENTING THE FINANCING OF PROLIFERATION OF WEAPONS OF MASS DESTRUCTION BY FUTURES BROKERS, PROSPECTIVE PHYSICAL CRYPTO ASSET TRADERS, AND PHYSICAL CRYPTO ASSET TRADERS BY THE GRACE OF THE ALMIGHTY GOD

HEAD OF THE COMMODITY FUTURES TRADING SUPERVISORY AGENCY REPUBLIC OF INDONESIA,

Considering:
a. that in the context of efforts to prevent the Financing of Proliferation of Weapons of Mass Destruction, Indonesia has a commitment to support the listing of the identity of persons or corporations in the Financing of Proliferation of Weapons of Mass Destruction List, and the immediate blocking of funds owned by persons or corporations listed in the Financing of Proliferation of Weapons of Mass Destruction List; b. that the Unitary State of the Republic of Indonesia, as a member of the United Nations, shares responsibility for maintaining world peace, inter alia through the implementation of United Nations Security Council Resolutions regarding the prevention of proliferation of weapons of mass destruction, which mandate the immediate blocking of funds owned or controlled by persons or corporations whose identities are listed in the Financing of Proliferation of Weapons of Mass Destruction List;
c. that Futures Broker Companies, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders have been designated as Reporting Parties based on legislation regarding the prevention and eradication of money laundering crimes and are required to perform blocking;
d. that the prevention of money laundering crimes and terrorist financing crimes, and the commitment to support the listing of the identity of persons or corporations in the Financing of Proliferation of Weapons of Mass Destruction List, and immediate blocking, are realized through regulations governing risk assessments referring to the National Risk Assessment and Sectoral Risk Assessment, document verification and record-keeping activities, and support for accelerating information submission to law enforcement; e. that based on the considerations referred to in letters a through d, it is necessary to establish a Regulation of the Commodity Futures Trading Supervisory Agency concerning Guidelines for Preventing the Financing of Proliferation of Weapons of Mass Destruction by Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders.

Recalling:

1. Law Number 32 of 1997 concerning Commodity Futures Trading (State Gazette of the Republic of Indonesia Year 1997 Number 93, Supplement to the State Gazette of the Republic of Indonesia Number 3720) as amended by Law Number 10 of 2011 concerning Amendments to Law Number 32 of 1997 concerning Commodity Futures Trading (State Gazette of the Republic of Indonesia Year 2011 Number 79, Supplement to the State Gazette of the Republic of Indonesia Number 5232);
2. Law Number 8 of 2010 concerning the Prevention and Eradication of Money Laundering Crimes (State Gazette of the Republic of Indonesia Year 2010 Number 122, Supplement to the State Gazette of the Republic of Indonesia Number 5164);
3. Law Number 9 of 2013 concerning the Prevention and Eradication of Terrorist Financing Crimes (State Gazette of the Republic of Indonesia Year 2013 Number 50, Supplement to the State Gazette of the Republic of Indonesia Number 5406);
4. Government Regulation Number 49 of 2014 concerning the Implementation of Commodity Futures Trading (State Gazette of the Republic of Indonesia Year 2014 Number 143, Supplement to the State Gazette of the Republic of Indonesia Number 5548);
5. Presidential Regulation Number 68 of 2019 concerning the Organization of State Ministries (State Gazette of the Republic of Indonesia Year 2019 Number 203) as amended by Presidential Regulation Number 32 of 2021 concerning Amendments to Presidential Regulation Number 68 of 2019 concerning the Organization of State Ministries (State Gazette of the Republic of Indonesia Year 2021 Number 106);
6. Presidential Regulation Number 11 of 2022 concerning the Ministry of Trade (State Gazette of the Republic of Indonesia Year 2022 Number 19);
7. Minister of Trade Regulation Number 29 of 2022 concerning the Organization and Work Structure of the Ministry of Trade (State Gazette of the Republic of Indonesia Year 2022 Number 492);
8. Joint Regulation of the Minister of Foreign Affairs of the Republic of Indonesia, Head of the National Police of the Republic of Indonesia, Head of the Financial Transaction Reports and Analysis Centre, and Head of the Nuclear Energy Regulatory Agency concerning Guidelines for Preventing the Financing of Proliferation of Weapons of Mass Destruction and Immediate Blocking of Funds Owned by Persons or Corporations, including those related to Persons or Corporations in the Financing of Proliferation of Weapons of Mass Destruction List for Providers of Goods and/or Other Services and Professions and Post Offices as Giro Service Providers;
9. Commodity Futures Trading Supervisory Agency Regulation Number 10 of 2017 Concerning Guidelines for the Implementation of Immediate Blocking by Futures Brokers of Funds Owned and Controlled by Persons or Corporations Whose Identities are Listed in the Financing of Proliferation of Weapons of Mass Destruction List;

DECIDING:
TO ESTABLISH: A REGULATION OF THE COMMODITY FUTURES TRADING SUPERVISORY AGENCY CONCERNING GUIDELINES FOR PREVENTING THE FINANCING OF PROLIFERATION OF WEAPONS OF MASS DESTRUCTION BY FUTURES BROKERS, PROSPECTIVE PHYSICAL CRYPTO ASSET TRADERS, AND PHYSICAL CRYPTO ASSET TRADERS.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Commodity Futures Trading Supervisory Agency Regulation, the following terms are defined:

1. Commodity Futures Trading Supervisory Agency, hereinafter referred to as Bappebti, is a government agency whose main task is to conduct development, regulation, development, and supervision of Commodity Futures Trading.
2. Commodity Futures Trading Broker, hereinafter referred to as Futures Broker, is a business entity that conducts buying and selling activities of Commodities based on Futures Contracts, Sharia Derivative Contracts, and/or other Derivative Contracts on behalf of Clients by collecting a certain amount of money and/or securities as Margin to guarantee such transactions.
3. Physical Crypto Asset Trader is a party that has obtained approval from the Head of Bappebti to conduct transaction activities related to Crypto Assets, either in their own name and/or facilitating Crypto Asset Customers.
4. Prospective Physical Crypto Asset Trader is a party that has obtained a registration certificate from the Head of Bappebti to conduct transaction activities related to Crypto Assets, either in their own name and/or facilitating Crypto Asset Customers, until the Crypto Asset Futures Exchange and Crypto Asset Clearing Institution are established.
5. Proliferation of Weapons of Mass Destruction is the spread of nuclear, biological, and chemical weapons.
6. Funds are all assets or movable or immovable objects, whether tangible or intangible, obtained by any means and in any form, including in digital or electronic format, evidence of ownership, or connection to all such assets or objects, including but not limited to bank credits, traveler's checks, checks issued by banks, money transfer orders, shares, securities, bonds, bank drafts, and debt acknowledgments.
7. Financing of Proliferation of Weapons of Mass Destruction, hereinafter referred to as PPSPM, is PPSPM as regulated in regulations regarding PPSPM.
8. Futures Broker Separate Account is a Futures Broker account at a custodian bank approved by Bappebti to store Client funds and is separated from the Futures Broker's assets.
9. Fund Transfer is Fund Transfer as referred to in the Law regulating Fund Transfers.
10. Client is a Party conducting futures contract, Sharia derivative contract, and/or other derivative contract transactions through an account managed by a Futures Broker.
11. High Risk Customers are Clients who, based on their identity background and history, are considered to have a high risk of involvement in money laundering crimes and/or Terrorist Financing activities and/or PPSPM.
12. Customer Due Diligence, hereinafter abbreviated as CDD, is an activity involving identification, verification, and monitoring conducted by Futures Brokers to ensure transactions are consistent with the profile, characteristics, and/or transaction patterns of prospective Clients or Clients.
13. Enhanced Due Diligence, hereinafter abbreviated as EDD, is a deeper CDD action conducted by Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders against prospective Clients or Clients who are high risk, including Politically Exposed Persons (PEP) and/or in high-risk areas.
14. Suspicious Financial Transaction is a Suspicious Financial Transaction as referred to in the Law regulating the prevention and eradication of money laundering crimes and the Law regulating the prevention and eradication of terrorist financing crimes and/or PPSPM.
15. Financial Transaction Reports and Analysis Centre, hereinafter abbreviated as PPATK, is an independent agency established to prevent and eradicate money laundering crimes.
16. Financial Action Task Force, hereinafter abbreviated as FATF, is an international body aimed at establishing international standards in the prevention and eradication of money laundering, terrorist financing, and other matters threatening the integrity of the international financial system.
17. Financial Action Task Force Recommendations, hereinafter referred to as FATF Recommendations, are standards for the prevention and eradication of Money Laundering, Terrorist Financing, and/or PPSPM issued by FATF.
18. Immediate Blocking is blocking as regulated in regulations regarding PPSPM.
19. PPSPM List, hereinafter abbreviated as DPPSPM, is a list of suspected perpetrators of PPSPM as referred to in legislation regarding the prevention and eradication of PPSPM.

CHAPTER II
OBLIGATIONS FOR THE IMPLEMENTATION OF THE PPSPM PREVENTION PROGRAM
Article 2
(1) Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders are obligated to identify, assess, and understand PPSPM risks related to Clients, countries or geographical areas, products, services, or transactions, and distribution networks (delivery channels). (2) In carrying out the obligations referred to in paragraph (1), Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders must:
a. document the PPSPM risk assessments prepared by Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders; b. consider all relevant risk factors before determining the overall risk level, as well as the appropriate level and type of risk mitigation to be applied;
c. update risk assessments periodically as needed; and
d. have adequate mechanisms regarding the provision of risk assessment information to competent authorities.
(3) The risk assessment referred to in paragraph (1) must refer to Indonesia's risk assessment of PPSPM crimes nationally (National Risk Assessment).

Article 3
(1) Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders must have policies, supervision, and procedures for managing and mitigating PPSPM risks approved by the Board of Directors and Board of Commissioners, so that business actors can mitigate such risks and apply them to high-risk areas or business relationships as identified. (2) Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders must monitor the implementation of the policies, supervision, and procedures referred to in paragraph (1) and determine more in-depth actions to manage and mitigate risks if higher risks are identified.

CHAPTER III
ACTIVE SUPERVISION BY THE BOARD OF DIRECTORS AND BOARD OF COMMISSIONERS
Section One
Active Supervision by the Board of Directors
Article 4
Active supervision by the Board of Directors must at least include:
a. Providing technical approval for policies, supervision, and procedures for managing and mitigating PPSPM risks; b. drafting written policies and procedures regarding the implementation of the PPSPM prevention program included in written policies and procedures regarding the implementation of the AML/CFT program;
c. forming a Special Work Unit (UKK) and/or appointing officials responsible for the implementation of the PPSPM prevention program;
d. monitoring the implementation of tasks by the Special Work Unit and/or officials responsible for the implementation of the PPSPM prevention program; e. ensuring that written policies and procedures regarding PPSPM prevention can be applied in various situations, especially responsive to changes and developments in products, services, and technology in the commodity futures trading and physical crypto asset market sectors.

Section Two
Active Supervision by the Board of Commissioners
Article 5
Active supervision by the Board of Commissioners must at least include:
a. Providing technical approval for policies, supervision, and procedures for managing and mitigating PPSPM risks; b. supervising the implementation of the Board of Directors' tasks in the implementation of the PPSPM prevention program; and
c. ensuring the organizational structure is adequate for the implementation of the PPSPM prevention program.

CHAPTER IV
POLICIES AND PROCEDURES
Article 6
Policies and procedures for implementing the PPSPM prevention program must at least include:
a. Identification and Verification of prospective Clients, Clients, and beneficial owners; b. Monitoring and Updating Data;
c. Maintenance of accurate data regarding CDD/EDD documents, transactions, and DPPSPM;
d. Reporting to senior officials, the Board of Directors, and the Board of Commissioners regarding the implementation of the PPSPM prevention program; and e. Reporting to PPATK.

Section One
Identification and Verification of Prospective Clients, Clients, and Beneficial Owners
Article 7
(1) Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders must conduct Customer Due Diligence (CDD) to ensure that transactions are consistent with the profile of prospective Clients or Clients.
(2) Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders are prohibited from accepting Clients who show indications related to the DPPSPM.

Article 8
The implementation of CDD, besides intended to obtain up-to-date information regarding Client profiles based on a risk-based approach to ensure consistency between Client profiles and transactions conducted, and to ensure that Client profiles are not included in the DPPSPM.

Article 9
Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders must have policies regarding the acceptance and identification of prospective Clients that must at least cover the following:
a. requests for information regarding prospective Clients; b. requests for copies or recordings of Client identity documents, namely Identity Cards (KTP) for Clients possessing KTP based on laws concerning population administration or other documents that can show the National Identity Number (NIK);
c. research on the authenticity of supporting identity documents of prospective Clients;
d. requests for more than one identity card issued by competent authorities if there is doubt regarding the existing identity card; e. if necessary, interviews with prospective Clients may be conducted to obtain assurance regarding the truthfulness of information, identity proof, and supporting documents of prospective Clients; f. prohibition on opening or maintaining anonymous accounts or accounts using fictitious names; g. face-to-face meetings with prospective Clients at the beginning of the business relationship to assure the truthfulness of the prospective Client's identity; h. vigilance against transactions or business relationships with prospective Clients originating from or related to countries that are not adequate in implementing Financial Action Task Force (FATF) recommendations and/or are included in the DPPSPM; and
i. the process of verifying the identity of prospective Clients and beneficial owners must be completed before establishing a business relationship with prospective Clients.

Article 10
(1) In the event that a prospective Client represents a beneficial owner to establish a business relationship or conduct transactions, Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders must conduct CDD procedures against the beneficial owner with the same strictness as CDD procedures for prospective Clients. (2) In the event that the beneficial owner is classified as a PEP, the procedures applied are stricter CDD procedures or Enhanced Due Diligence (EDD). (3) In identifying corporate prospective Clients, Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders must determine the beneficial owner. (4) For beneficial owners that are government institutions, government agencies, or companies listed on the Futures Exchange (listing), the obligation to submit documents and/or the identity of the ultimate controller does not need to be performed. (5) Exceptions to the obligation to submit documents and/or the identity of the ultimate controller of the beneficial owner must be documented. (6) In the event that Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders doubt or cannot verify the identity of the beneficial owner, they must refuse to establish a business relationship or conduct transactions with the prospective Client. (7) Against prospective Clients or beneficial owners whose business relationships or transactions are rejected, Futures Brokers must obtain at least information on name, identity number, address, and place and date of birth according to copies of identity documents obtained by the Futures Broker for the purpose of reporting Suspicious Financial Transaction Reports (LTKM).

Article 11
Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders must examine the truthfulness of information submitted by prospective Clients, Clients, and beneficial owners by verifying supporting documents based on documents and/or other independent sources and ensuring the currency of such information.

Article 12
In order to assure the truthfulness of the identity of prospective Clients, Clients, and beneficial owners, verification is conducted by:
1) face-to-face meetings with prospective Clients, Clients, and beneficial owners at the beginning of the business relationship;
2) conducting interviews with prospective Clients, Clients, and beneficial owners if necessary;
3) matching the consistency of the profile of prospective Clients, Clients, and beneficial owners with the self-photo contained in the identity card;
4) matching the consistency of signatures, thumbprints, or fingerprints with identity documents or other documents containing signatures, thumbprints, or fingerprints. Other documents include, among others, statements from prospective Clients, Clients, and beneficial owners, family cards, or credit cards;
5) requesting prospective Clients, Clients, and beneficial owners to provide more than one identity document issued by competent authorities if there is doubt regarding the existing identity card;
6) recording copies of identity cards after matching with original valid documents;
7) conducting cross-checks to ensure consistency of various information submitted by prospective Clients, Clients, and beneficial owners;
8) ensuring that prospective Clients, Clients, and beneficial owners have no negative track record by verifying the identity of prospective Clients, Clients, and beneficial owners using other independent sources, including but not limited to:
a. DPPSPM; b. other data owned by Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders, employer identities of prospective Clients, Clients, and beneficial owners, telephone accounts, and electricity accounts; and/or
c. ensuring the possibility of unusual or suspicious matters.

Article 13
(1) The verification process through face-to-face meetings may be exempted with the following provisions:
a. verification is conducted through electronic facilities owned by Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders; and b. verification must utilize population data that meets 2 (two) factors of authentication. (2) Verification conducted through electronic facilities owned by Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders may be conducted with the provision that such electronic facilities can provide electronic information and/or electronic documents as valid evidence based on legislation and can be accounted for.

Article 14
In the event that Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders assess a Client as high risk, the Futures Broker applies a higher level of CDD in the form of EDD against the relevant Client by verifying information of prospective Clients, Clients, and beneficial owners, based on the truthfulness of information, truthfulness of information sources, and types of information involved.

Article 15
Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders must document Clients receiving simplified CDD in a list containing information regarding the reasons for determining the risk so that they are classified as low risk.

Section Two
Monitoring and Updating Data
Article 16
(1) Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders are obligated to conduct analysis against all Client profiles.
(2) Futures Brokers, Prospective Physical Crypto Asset Traders, and Physical Crypto Asset Traders may request information regarding the background and purpose of transactions for transactions that are not consistent with the Client's profile, observing anti-tipping-off provisions as referred to in the Law regulating the Prevention and Eradication of Money Laundering Crimes.

Article 17
Monitoring activities of Client profiles and transactions are conducted continuously and include:
1) ensuring the completeness of Client information and documents;
2) examining the consistency between transaction profiles and Client profiles; and
3) examining the similarity or equality of names with names listed in:
a. databases of proliferation of weapons of mass destruction lists; and b. names of suspects or defendants published in the mass media or by competent authorities (such as the Police and PPATK).

CHAPTER V
IMMEDIATE BLOCKING AND SANCTIONS
Section One
DPPSPM
Article 18
(1) PPATK transmits the DPPSPM as well as set...