In order to support Anti Money Laundering/Terrorist Financing Prevention (Anti Pencucian Uang/Pencegahan Pendanaan Terorisme or APU/PPT) efforts, Accountants and Public Accountants are required to implement and adhere to the provisions regarding the Principles in Recognizing Service Users.

In this article, TGS AU Partners Team will delve deeply into the Principles in Recognizing Service Users, its internal implementation guidelines, and concrete steps for applying these principles.

About the Principles of Recognizing Service Users

The Principles in Recognizing Service Users (Prinsip Mengenali Pengguna Jasa or PMPJ) is one of the principles aimed at preventing money laundering, as regulated by the AML (Anti-Money Laundering) Act, Article 18 (Pasal 18 UU TPPU). The essence of PMPJ includes three activities: customer identification, customer verification, and monitoring of customer transactions, with the purpose of enabling the tracing of the money laundering process, thus facilitating further investigative actions by law enforcement. 

According to Mrs. Rika Angelina, CA., CPA., CPI, Partner in Audit & Assurance at TGS AU Indonesia, PMPJ in this context serves not only as a guideline for recognizing who our service users are but also functions as a means of preventing money laundering and terrorism financing, while also providing legal protection for service providers.

Internal Regulations for Implementing Principles of Recognizing Service Users

Within the environment of an Accounting Service Office (ASO) or a Public Accounting Office (PAO), an Accountant or Public Accountant is required to formulate internal guidelines and implement policies, procedures, and internal controls related to the execution of the Principles in Recognizing Service Users (PMPJ). These guidelines can be incorporated into the Internal Control System (ICS) of the ASO or PAO or take another form. Below are the main components that should be present in these guidelines:

  1. Implementation Procedure of PMPJ: This document should, at the very least, outline concrete steps for implementing the Principles in Recognizing Service Users (PMPJ). If these guidelines are included in the ICS, it is advisable to place them within the section governing the client onboarding process and ongoing business relationships.

  2. Monitoring and Compliance Oversight: This step is crucial to ensure the proper execution of the Principles in Recognizing Service Users (PMPJ). The guidelines should clarify who is responsible for monitoring and overseeing compliance with PMPJ, including the presence of an independent function to ensure the application of these principles. If these guidelines are included in the ICS, the relevant monitoring section is the appropriate place.

  3. Employee Onboarding and Training Procedures: This section encompasses procedures for the selection and onboarding of new employees, including the pre-employee screening phase. The guidelines should also encompass steps in introducing and understanding employee profiles, as well as ongoing training programs. If these guidelines are included in the ICS, it is recommended to place them within the section governing Human Resources aspects.

With the presence of guidelines that align with the above components, ASOs or PAOs will have a strong foundation for consistently and effectively implementing the Principles in Recognizing Service Users (PMPJ)

Steps to Implement the Principles of Recognizing Service Users

Aside from the urgency of PMPJ, it is important to know how to implement the Principles of Recognizing Service Users in a correct way. Here are steps to run the PMPJ on companies and businesses!

1. Scope Mapping of Services

When initially receiving a task from a Service User, it is crucial for an Accountant or Public Accountant to carefully understand the scope of the services to be provided. Consideration must be given as to whether the type of service in question falls within the realm of applying the Principles in Recognizing Service Users (PMPJ). This includes the following:

  1. Property buying and selling transactions.

  2. Management of money, securities, or other financial products.

  3. Account management such as checking, savings, deposits, or securities.

  4. Company operations and management.

  5. Establishment, purchase, or sale of legal entities.

If the services provided do not fall into the categories above, all professional services provided by an Accountant or Public Accountant are considered to have low risk based on PMPJ and can implement simpler PMPJ procedures without in-depth risk analysis.

2. Notifying Procedures and Service Coverage to Service Users

Accountants or Public Accountants are obligated to communicate with Service Users to explain whether the services to be provided fall within the scope of PMPJ. Furthermore, information must be provided regarding the procedures to be followed and the data to be submitted in accordance with PMPJ procedures. Once Service Users agree to apply PMPJ, the next step is to ascertain whether the Service User is acting on their own behalf or on behalf of a Beneficial Owner (BO).

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However, if a Service User refuses to adhere to PMPJ procedures, the Accountant or Public Accountant must take decisive steps by terminating the business relationship with the Service User and reporting it to the Financial Transaction Reports and Analysis Center (PPATK).

By following these steps, Accountants or Public Accountants will be able to apply the Principles in Recognizing Service Users accurately and ensure compliance with applicable regulations.

3. Analysis of Service Users Risks

In the context of providing services by an Accountant or Public Accountant, it is essential to conduct a risk analysis of the Service Users and/or Beneficial Owner (BO) to assess the associated risk levels. This analysis is carried out using professional considerations based on guidelines such as Sectoral Risk Assessment from the Ministry of Finance or other relevant regulations. Some key points of this risk analysis are as follows:

  1. Risk categories: Each Service User and/or BO must be categorized as low, medium, or high risk. These risk categories need to be periodically updated in accordance with the latest developments.

  2. Beneficial owner: A Beneficial Owner is an individual who holds rights, benefits, or control over Service User Transactions. This includes factors such as asset ownership, transaction control, and roles within a company or legal entity.

  3. Risk profiles: Several risk profiles are identified, including profiles of Service Users and/or BO, business profiles, and domicile profiles. Each of these profiles carries a different risk category based on their characteristics.

  4. Politically exposed persons (PEP): Individuals with political affiliations, such as state officials or individuals closely connected to the government, automatically fall into the high-risk category.

  5. Transactions with high-risk countries: Service Users or BO engaging in transactions with parties from countries deemed high-risk based on recommendations from the Financial Action Task Force (FATF) are also considered high-risk.

  6. Special criteria: Service Users and/or BO meeting specific criteria, such as affiliations with political parties or holding strategic positions in various institutions, also fall into the high-risk category.

In conducting this risk analysis, it is crucial to understand the applicable rules and regulations and adhere to established guidelines. This risk analysis aids in identifying potential risks arising from interactions with Service Users and/or BO and taking appropriate actions to manage those risks.

4. Implementation of Principles of Recognizing Service Users Procedures

Implementation of the principles in recognizing service users involves the stages of identification, verification, and transaction monitoring.

1. Identification of Service Users and/or BO:The identification process involves requesting information and identity documents from Service Users and/or BO. There are two scenarios:

  • If a Service User acts on their own behalf, the identification process is focused on the Service User alone.
  • If a Service User acts on behalf of a BO, identification is conducted for both parties. 

Accountants/Public Accountants need to hold face-to-face meetings with Service Users at the beginning of the business relationship to verify their identity. The risk category of Service Users and/or BO determines the level of identification detail.

  • Low Risk: Simple principles in recognizing service users' process, including basic information such as individual or corporate identity.
  • Medium Risk: Principles in recognizing service users process with more comprehensive information.
  • High Risk: In-depth principles in recognizing service users process involving more detailed information and documents.

2. Verification of Service Users: After identification, Accountants or Public Accountants verify the information and documents. This involves interviews, confirmation with issuing institutions, and requesting supporting documents.

3. Transaction Monitoring for Service Users: Accountants/Public Accountants must monitor the transactions of Service Users according to the provided services. This includes monitoring payments, transaction actors, amounts, and transaction dates.

5. Documentation and Record-Keeping System Management

  1. All documents related to Service Users and other relevant parties (including identities, business relationship forms, and correspondence) must be retained for 5 (five) years after the business relationship with Service Users ends. These documents need to be submitted upon request by authorized institutions such as PPPK, PPATK, or other authorities. Document submission should take place within a maximum of 3 (three) days after receiving an official request.

  2. Accountants or Public Accountants must have a transaction recording system (whether manual or computerized) capable of identifying, monitoring, and generating reports about the characteristics of Transactions carried out by Service Users.

6. Reporting

  1. Accountants or Public Accountants are required to report to PPATK (Financial Transaction Reports and Analysis Center) when they come across suspicious financial transactions.

  2. Accountants or Public Accountants are also obligated to report to PPATK as suspicious financial transactions if:

  1. Service Users refuse to comply with the principles in recognizing service users procedures, or

  2. There are doubts about the authenticity of the information provided by Service Users.

  3. Reporting regarding suspicious financial transactions can be done through the GRIPS PPATK application available on the website https://grips2.ppatk.go.id.???????

Conclusion

The Principle in Recognizing Service Users is a principle applied by Accountants and Public Accountants to understand the profile, characteristics, and patterns of Customer Transactions, in order to detect the early potential for money laundering that can be followed up by the relevant law enforcement authorities.

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