Legal & Regulatory Framework
The Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA) is the primary statute governing the AML/CFT regime in Malaysia. The Act was gazetted as law on 5 July 2001 and came into force on 15 January 2002.
The AMLA provides for the offence of money laundering and terrorism financing and the measures to be undertaken for the prevention of money laundering and terrorism financing offence.
The AMLA provides wide-ranging investigation powers including powers for law enforcement agencies and Public Prosecutor to freeze and seize properties that are involved or suspected to be involved in money laundering or terrorism financing offences, and the power of the court to forfeit properties derived from the proceeds of serious crimes.
The various parts of the AMLA are:
Part I : Preliminary
Part II : Money Laundering Offences
Part III : Financial Intelligence
Part IV : Reporting Obligations
Part IVA : Cross border movements of cash and Bearer Negotiable Instruments
Part V : Investigation
Part VI : Freezing, seizure and forfeiture
Part VIA : Suppression of Terrorism Financing Offences and Freezing, Seizure and Forfeiture of Terrorist Property
Part VII : Miscellaneous
The enforcement of the AMLA is undertaken by various ministries/agencies based on the predicate offences under their respective purview which is listed under the Second Schedule of the AMLA. As at November 2014, there are 356 offences under 42 pieces of legislations are listed under the Second Schedule of the AMLA.
Roles of Bank Negara Malaysia as Competent Authority under the AMLA
As the Competent Authority, Bank Negara Malaysia’s roles include the following:
- receive suspicious transaction reports (STR) from the reporting institutions;
- receive cash threshold reports (CTR) from relevant reporting institutions;
- analyse the STRs and CTRs;
- disseminate information on suspected offences derived from the STRs and CTRs analysis to the appropriate law enforcement agencies for investigation;
- compile statistics and records;
- give instructions to reporting institutions pertaining to any report or information received;
- make recommendations to the relevant supervisory authority, enforcement agency and reporting institutions arising from any report or information received; and
- create training requirements and provide training for any reporting institutions in respect of the reporting institutions’ obligations under Part IV of the AMLA.
The AMLA is enforced by various agencies depending on the nature of the crime under their respective purviews. Bank Negara Malaysia is only empowered to investigate money laundering cases relating to laws administered by Bank Negara Malaysia:
- Financial Services Act 2013
- Islamic Financial Services Act 2013
- Money Services Business Act 2011
- Development Financial Institutions Act 2002 (Act 618)