“Without delay”, in respect of maintenance of sanctions list and freezing, blocking and rejecting is ideally within a matter of hours of designation by the United Nations Security Council (UNSC) or its relevant Sanctions Committee. The aim is to prevent the flight or dissipation of funds or other assets which are linked to terrorists, terrorist activities, financing of terrorism or financing of proliferation of weapons of mass destruction.

Reporting institutions are expected to be updated on any changes in the UNSC or its relevant Sanctions Committee sanctions list and are accountable to ensure their sanction database is up-to-date and comprehensive.

Bank Negara Malaysia will assist in ensuring information is communicated as soon as practicable.

The list of all specified individuals and entities specified under the relevant subsidiary legislations made under section 66B(1) of the AMLA are published in the Gazette. Reporting institutions may refer to the following website for the list:

http://www.federalgazette.agc.gov.my

Reporting institutions may also refer to the Ministry of Home Affairs' website for the Domestic List.

Reporting institutions are to be aware that the subsidiary legislation issued under section 66B(1) of the AMLA usually amends the previous subsidiary legislation.

Reporting institutions are required to keep updated with the UNSCR Lists and Domestic List, which is updated without any specific intervals.

In this regard, reporting institutions shall refer the UNSCR and Ministry of Home Affairs' website regularly to ensure the lists maintained remain updated and relevant.

Bank Negara Malaysia will assist in ensuring information is communicated as soon as practicable.

No. Removal from UNSCR list does not automatically mean that the entities are removed from the Domestic List. The delisting will only take effect upon publication of the Gazette to declare the removal of such specified entities through the relevant subsidiary legislation issued by the Minister of Home Affairs.

Sanctions screening is applicable to every citizen of Malaysia and every body corporate in Malaysia. As such, sanctions screening shall also be done on any individuals who undertake “statutory obligation” transactions i.e. contributions to statutory bodies such as EPF, SOCSO, AKPK or LHDN.

Where the reporting institution acts as an agent for a statutory body or Ministry, the respective reporting institution and the statutory body or Ministry should have a clear understanding as to the role of each institution during on-boarding and ongoing business relationships.  

Reporting institutions in their agent capacity should conduct CDD and sanctions screening, for example, at the point of establishing business relationship (e.g. opening of account), as the requirement to conduct sanction screening under Section 66B(3) of the AMLA applies to all entities, whether dealing directly or indirectly with a sanctioned entity/person.

Reporting institutions are required to conduct sanctions screening on existing, potential or new customers against the UNSCR Lists and Domestic List which state names and particulars of specified / designated entities as declared by the UNSC or Minister of Home Affairs, as part of the customer due diligence process and on-going due diligence. 

For customers which are legal persons, reporting institutions are required to screen the name of the customer, i.e. among others but not limited to, companies, bodies corporate, foundations, partnerships, or associations and other similar entities, as well as the beneficial owners, i.e. directors, shareholders including nominees, against the sanctions lists. 

This refers to various ways of conducting search against the UNSCR Lists and Domestic List, for example, varying sequence and order of keywords of a name or the use of different spelling of a name, to prevent unintended omissions.

Further, to eliminate false positives, reporting institutions may make enquiries for additional information and identification documents from the customer or credible sources to assist in determining whether the potential match is a true match or may direct any query to FIED, BNM, in the case of similar or common names.

Reporting institutions are required to ascertain that potential matches are true matches and not false positives. It is the reporting institution’s responsibility to take further measures or steps (e.g. make further inquiries for additional information, etc.) to determine whether the potential match is a true match.

Reporting institutions are to ensure that the identifiers are strong and corroborative for the reporting institution to make their own assessment on the parameters used to ensure true matches. 

Related party refers to:

1. person related to the funds, other financial assets or economic resources that are wholly or jointly owned or controlled, directly or indirectly, by a designated person; and
2. a person acting on behalf or at the direction of a designated person.

Based on the above, it may extend to shareholders, directors, authorized person, senior management and also the beneficial owner.

Yes, they should be declared as related parties. The reporting institution is to further assess the accounts and transactions and may also consider submitting an STR if such is warranted.

Yes. The company account needs to be frozen, if, from the reporting institution’s assessment, the specified entity is considered to own or control, directly or indirectly, the company and/or the funds in question.

In making this assessment, reporting institutions should analyse the specified entity’s role and conduct as the signatory and other involvement in the company to ascertain that there is no indirect control or ownership.

Reporting institutions are only allowed to inform the customer on the reason why the account or transaction has been frozen, blocked or rejected for publicly listed names e.g. under the Gazette Orders, UNSCR Lists, etc.

Freezing of funds and periodic reporting must continue until the specified entities are delisted.

Freezing, blocking or rejecting funds must be applied to all transactions including RENTAS and GIRO transactions and to all accounts including joint accounts.

However, loan ac15counts should not be frozen, as it must continue to be serviced.

Reporting institutions are required to hold / freeze funds deposited by a listed individual/ entity into its account until its delisting or the sanction is uplifted.

A loan account and in this example, as a hire purchase account is a loan account, it should not be frozen. However, when the repayment is completed, the property or vehicle must not be redeemed, transferred or sold.

The reporting institution is required to establish the relationship of the specified entity as the guarantor of the vehicle loan, i.e. whether the specified entity is in possession or control of the property when repayment is completed and subsequent redemption of the vehicle.

Funds are to remain frozen as long as the specified entities remained listed. No dealing with the funds is allowed, which includes the transfer of funds to the Registrar of Unclaimed Moneys.

In relation to unilateral sanctions list such as those by the US Department of Treasury, the decision whether to freeze, block, reject or conduct transaction with persons listed under the unilateral list should be based on the reporting institution’s own assessment and its risk appetite.

Reporting institutions may consider submitting STR on any positive name match with individuals or entities listed in other unilateral sanctions list.

All allowable transactions require reporting institution to make an application to the Ministry of Home Affairs for any property belonging to specified entities under section 66B of the AMLA or the Strategic Trade Controller for specified entities under the Strategic Trade Act 2010.

Funds or payments that may be considered includes the following:

1. fees or service charges for routine holding or maintenance of frozen funds;
2. payments for medical purposes under an insurance policy / takaful certificate;
3. payment of insurance premiums;
4. payment of taxes;
5. public utility charges (e.g. Tenaga Nasional);
6. payment of reasonable professional fees; and
7. payment for rent or mortgage.

Yes. Reporting institutions are permitted to receive payments into the specified entities credit or loan accounts. However, should the payment be for the purchase of assets, the assets should remain frozen even after the full settlement of the financing facilities i.e.  no transfer of ownership to the specified entity or a third party.

In the event of any non-payment of loans, the reporting institution shall not proceed with property foreclosure or any subsequent court process without prior application to, and approval by:

1. the Minister of Home Affairs for Domestic List and UNSCR Lists for terrorism financing; or
2. the Strategic Trade Controller for UNSCR Lists for proliferation financing and others sanctions regime.

Reporting institutions may close any account where loans are not serviced or terminate any policy for non-payment of premium, only upon approval from:

1. the Minister of Home Affairs for Domestic List and UNSCR Lists for terrorism financing; or
2. the Strategic Trade Controller for UNSCR Lists for proliferation financing and others sanctions regime.

Yes. Submission of STR is still required in addition to submission of the TFS determination report. The STR should contain further information beyond the information reported in the TFS determination report, for example, details of related transactions or parties. 

No, reporting institutions are required to only submit determination or periodic reporting for positive name matches (i.e. when there is a hit).

For periodic reporting, the report is to be submitted at every six months interval period as per the forms in Appendix 8b of the Policy Document. The completed form may be submitted via email to: [email protected]

Yes. Reporting institutions are required to fill in the form in the “related parties” column in the case of supervisory reporting.

In addition, reporting institutions should assess and analyse the related parties’ transactions vis-à-vis specified entities. Should the reporting institution assess the relationship between the second joint account holder with the specified entities as suspicious, the reporting institution must consider submitting a STR to FIED, BNM.

Reporting institutions and financial groups are required to ensure that their foreign branches and subsidiaries apply AML/CFT and TFS requirements in a manner that is consistent with the AML/CFT and TFS requirements in Malaysia, to the extent that such is permitted by the laws and regulations of the host country.

As such, reporting institutions need to assess the requirements applicable to the foreign branches and subsidiaries on the need for reporting STRs in the host country.

Reporting institutions need to assess whether the home country domestic listing is a factor for STR submission. Reporting institutions’ foreign branches should also consider submitting a STR to FIED, BNM, to the extent that such is permitted by the laws and regulations of the host country.