Malaysia has an upper-middle-income economy and is subject to several money laundering threats. Situations such as the country's porous land and sea borders, strategic geographic location, and well-developed financial system here increase its vulnerability to domestic and international criminal activities such as corruption, terrorism, terrorist financing, fraud, drug trafficking, smuggling, wildlife trade, tax crimes.
Besides, Malaysia has substantially up-to-date AML legislation and institutional frameworks. Malaysia has made continued progress in improving its AML implementation by increasing money laundering investigations and prosecutions. Besides, one of the key areas for development in Malaysia is the prosecution of foreign-origin crimes.
AML Regulators in Malaysia
Malaysia has more than one regulatory agency for money laundering crimes. The most important of these is The Anti-Money Laundering, Anti-Terrorism Financing, and Proceeds of Unlawful Activities Act 2001 (the “AMLATFA”). AMLATFA is a federal law that applies in all States and federal territories of Malaysia. Apart from that, we briefly mentioned other money laundering regulatory agencies below:
- Royal Malaysian Police
- Ministry of Home Affairs
- Securities Commission
- Malaysia Anti-Corruption Commission
- Immigration Department
- Royal Malaysian Customs
- Ministry of Finance
- Attorney General’s Chambers
- Companies Commission of Malaysia
- Labuan Offshore Financial Services Authority
- Ministry of Internal Security
- Ministry of Domestic Trade
What Is Considered to be Money Laundering in Malaysia?
According to section 4 of the AMLATFA, the following items are considered to be Money Laundering:
- engaging, directly or indirectly, in a transaction that involves proceeds of unlawful activity or instrumentalities of an offense;
- acquiring, receiving, possessing, disguising, transferring, converting, exchanging, carrying, disposing of or using proceeds of unlawful activity or instrumentalities of an offense; • removing from or bringing into Malaysia proceeds of unlawful activity or instrumentalities of an offense; or
- concealing, disguising, or impeding the establishment of the true nature, origin, location, movement, disposition, the title of, rights concerning, or ownership of, proceeds of unlawful activity or instrumentalities of an offense.
In general terms, income from illegal activity or any related gains or transactions is considered crime. What is called illegal activity is an activity that constitutes any serious crime. Indicates serious crimes regardless of whether such activity takes place wholly or partially inside or outside Malaysia. As a result of these crimes, Malaysia is punished by the authorities.
AML Fines in Malaysia
Different crimes under AMLATFA have different maximum penalties. The maximum penalty for a money laundering offense under section 4 of the AMLATFA is 15 years imprisonment and a fine of not less than five times the offense's value. Also, not only is there a penalty for money laundering, but also non-compliance with AML regulations. In minor non-compliance, the relevant supervisory authority can send a warning letter to the relevant reporting agency.
What Institutions Are Obliged to Comply with AML Regulations?
Although banks and financial institutions in Malaysia are subject to AML regulations, some institutions must also comply with AML regulations. This is because these institutions have money laundering risks. Here are some of these institutions:
- accountants and company secretaries
- licensed casinos
- licensed gaming outlets
- registered estate agents
- trust companies
With its AML solutions, Sanction Scanner can minimize the ML risks of institutions in Malaysia. All of the Sanction Scanner solutions are compliant with all regulations, so organizations can comply with the regulations without difficulty, thus protecting themselves from fines and reputational losses. For detailed information, you can contact us or request a demo.