Malaysia’s AML/CTF supervisors
According to the Anti-Money Laundering, Anti-Terrorism Financing, and Proceeds of Unlawful Activities Act of 2001, Bank Negara Malaysia (BNM) is the competent body in Malaysia. BNM, among other things, directs national AML/CTF efforts, creates AML/CTF regimes and regulations, and collects and evaluates Suspicious Transaction Reports (STRs).
How do you comply with AML/CTF regulations in Malaysia?
The reporting entities in Malaysia must comply with the following obligations.
Obligation to perform consumer due diligence measures in all of the following situations, or in any of them
- While establishing or maintaining commercial ties, carrying out any transaction with customers, or performing tasks for or on behalf of clients, whether they are sporadic or regular customers
- If the planned transaction or activity costs more than what a competent authority may allow
- When there is a solid basis for suspicion that a ML/TF offence has been committed
- When the validity or sufficiency of previously acquired consumer identifying data is under question
Obligation to follow guidelines while conducting consumer due diligence processes, such as:
- Determine the client
- Establish their identity
- Check the credentials of anyone claiming to speak or act on behalf of a customer
- Follow the reasonable steps to ascertain a person's identity if there is any reasonable doubt that a person is not acting on their own behalf when an account is opened or when a transaction or other activity is carried out
Responsibility to continuously undertake due diligence on all accounts, business relationships, transactions, and operations
Obligation to document any information, data, or facts discovered during the customer due diligence process and, upon request, to provide a written copy of such record to a competent body
Obligation to maintain all accounts, records, business communications, and documents relating to a connection, transaction, or activity with a customer, another person, or any other entity, as well as the results of any analysis performed
Obligation to retain records of all domestic currency transactions and foreign currency transactions exceeding the limits set by competent authorities for at least 6 years after the completion or termination of the transaction
Obligation to establish, create, and put into effect internal programmes, policies, procedures, and controls to prevent and uncover any act-related offence. The programmes must consist of:
- The creation of policies to guarantee high levels of integrity among its personnel and a method to assess their financial, employment, and personal histories
- Ongoing employee training initiatives, such as "know your customer" initiatives, as well as teaching employees about the requirements related to recordkeeping, reporting, due diligence, and record retention
- A function of independent auditing to verify such programmes' compliance
Requirement to appoint compliance officers at the management level in each branch and subsidiary who will be responsible for implementing internal programmes and procedures, including adequate recordkeeping and the reporting of questionable transactions
Obligation to create auditing functions to assess the policies, practices, and controls put in place to abide by the Act
What are my AML/CTF reporting obligations?
When one or more of the following acts takes place, a reporting institution must notify the competent authority as quickly as possible.
Any transaction that exceeds the maximum allowed by a competent authority (RM 25,000 and above in one day)
Any transaction that gives any officer or employee of the reporting institution reason to suspect that the transaction involves the proceeds of an illegal activity or the tools of a crime due to the identity of the parties involved, the transaction itself, or any other circumstances surrounding the transaction
Any transaction or property in which an officer or employee of the reporting institution has reason to believe that it is connected to, used for, or intended to be used in connection with a terrorist act, a terrorist, a terrorist group, an entity that supports terrorism, or a person who finances terrorism.
