On the 22 May 2017 the issue of global terrorism once again came to the fore at a concert given by popular singer Ariana Grande in UK city of Manchester. The international world once again had to face a wave of terror unleashed by suicide bombers inspired by the Islamic State of Iraq and the Syria Islamic State (“ISIS”).[1] Indeed, ISIS militants also attacked the city of Marawi in the Philippines on 23 May 2017, which resulted in a death toll of 85.[2] The world has condemned both of these tragic events in the strongest possible terms.
 
Sadly, Indonesia has also sustained a long list of losses over the years as a result of terrorist attacks. The most recent of these attacks, the suicide bombing at a Kampung Melayu TransJakarta bus stop on 25 May 2017, ultimately caused the deaths of three police officers.[3] This unfortunate event led to President Joko Widodo requesting the acceleration to the revision of Law No.  15 of 2003 on the Stipulation of Government Regulation in Lieu of Law No. 1 of 2002 on the Eradication of Terrorism (“Terrorism Eradication Law”).[4]
 
However, the most effective way of combating terrorism is not through the imposition of repressive measures but through prevention. One such preventive measure which has been intensified in recent years is to cut off the sources of access to financing for terrorist groups.[5] This approach has long been embedded in Law No. 9 of 2013 on the Prevention and Eradication of Terrorist Financing (“Terrorism Financing Eradication Law”), which urges corporations to not become involved in the financing of terrorism, with severe criminal sanctions being applied for acts of non-compliance.[6]
 
The role of financial services is crucial in terms of all aspects of terrorism funding or financing activity. Due to their significant role as regards the receiving and transferring of funds, financial-service institutions have become prone to innocently facilitating the preparation of terrorist attacks. Back in 2009, the Australian Transaction Report and Analysis Center (AUSTRAC) uncovered several sources of funding within Australia which were being used to help Al-Shabaab in Somalia. Similarly, in 2010, the German government spotted funds being transferred from within its jurisdiction to terrorist organizations located in the Middle East.
 
Given the significant possibility of the misuse of financial services as facilities which can be used in order to accommodate the funding of terrorism, financial-service institutions are now required to be increasingly vigilant as regards the identities of those who use their services. In an attempt to analyze this complex issue, this edition of Indonesian Law Digest (ILD) will tackle the various lists of measures aimed at preventing terrorism financing in connection to financial-service institutions, as well as current trends and issues relating to terrorism financing that all parties should be aware of. Our discussion will break down as follows: