FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

ANTI MONEY LAUNDERING AND COUNTER FINANCING OF TERRORISM

________________________________ Malaysian Anti Money Laundering Act 2001 / Malaysian Anti-Money Laundering (Amendment) Act 2003

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

ANTI MONEY LAUNDERING AND COUNTER FINANCING OF TERRORISM

Whats The issue with AML/CFT? A Global Issue A Regional Issue A National Issue And How It Affects: The Malaysian Financial Services Sector Your Institution You

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

ANTI MONEY LAUNDERING AND COUNTER FINANCING OF TERRORISM

Role of the Reporting Institution Role of the Employee You!

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

ANTI MONEY LAUNDERING AND COUNTER FINANCING OF TERRORISM

Money Laundering is a Major Global Issue: Estimated >1 trillion dollars of illicit funds circulating worldwide 250 billion dollars associated with US drug sales Other countries which are target for money launderers are nations with a high GNP / high per capita income

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

ANTI MONEY LAUNDERING AND COUNTER FINANCING OF TERRORISM

Process whereby criminals attempt to hide & disguise the true origin & ownership of the proceeds of their criminal activities i.e. concealing existence, source or application of illegal income A process to make illegitimate income appear legitimate thereby avoiding prosecution, conviction & confiscation of the criminal funds.

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

Illicit Activity Drug Production and Trafficking Other Criminal Activities

Placement Disposal of Bulk Cash Smuggling Bulk Currency Mix Illicit Proceeds with legitimate deposits Deposit amounts in small denominations Sub-divide bank or commercial transactions

Integration Use layered funds to purchase Clean Legitimate Assets Money Assets Fixed Assets Business

Layering Disguise origin of initial deposit through: Multiple Transfers Multiple Transactions

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

ANTI MONEY LAUNDERING AND COUNTER FINANCING OF TERRORISM

Placement Phase Front or cash businesses - businesses operated by criminals or their associates Conversion of cash to monetary instruments, lighten load and reduce bulk Smuggling of cash out of the country to unregulated countries i.e. in passenger luggage, bulk container shipments The remainder is smurfed

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

ANTI MONEY LAUNDERING AND COUNTER FINANCING OF TERRORISM

Layering Phase Separation of illegal proceeds from their source through layers of complex financial transactions: Back-to-back loans; Further purchases and transactions; False letter of credit transactions; Bogus Invoices; Use of Professional Intermediaries e.g. lawyers , accountants, secretarial companies.

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

ANTI MONEY LAUNDERING AND COUNTER FINANCING OF TERRORISM

Integration Phase Provides an apparent legitimate explanation for the launderers wealth: Time deposits Investments Stocks and Bonds Artwork Real Estate Capital Construction Projects The source of funding for the above is dirty money

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

ANTI MONEY LAUNDERING AND COUNTER FINANCING OF TERRORISM

Your Institution & You - Consequences of Non-Compliance! Failure to comply: Fine or Imprisonment or Both

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

ANTI MONEY LAUNDERING AND COUNTER FINANCING OF TERRORISM

The Legal Framework - a financial institution is governed by: Malaysian Anti- Money Laundering Act 2001 / Malaysian Anti- Money Laundering (Amendment) Act 2003 UPW/GP1: Standard Guidelines on Anti- Money Laundering and Counter Financing of Terrorism (AML/CFT) UPW/GP1[1]: Sectoral Guidelines 1 on AML/CFT

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA)

Came into force on Jan 15 2002 Criminalises money laundering Provides for actions that deters and detects money laundering Provides for freeze, seize and forfeiture of proceeds derived from money laundering activities

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA)

LEGAL FRAMEWORK Competent Authority/Financial Intelligence Unit (FIU) Reporting Institutions Examination of a Reporting Institutions Investigation by a Competent Authority International Cooperation Highlights of AMLA

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA) The Legal Framework
MOF Enforcement Agencies BNM ACA Customs Police CCM SC

Supervisory / Supervisory / Regulatory Regulatory Agencies Agencies

BNM BNM SC SC LOFSA LOFSA CCM Competent Authority

CCM

Reporting Institutions

Foreign FIUs

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA)

AMLA: Some Critical Provisions Section 3: wide definition of money laundering - person involved in money laundering where, - by inference, a person knows or has reason to believe proceeds are from an unlawful activity - a person without reasonable excuse fails to take reasonable steps to ascertain whether proceeds are from any unlawful activity

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA)

Section 4: Offence of money laundering Any person who: (i) engages in, or attempts to engage in, or (ii) abets the commission of money laundering

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA)

Penalty: Fine of up to RM5 million, or Imprisonment of up to 5 years, or Both

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA)

Record Keeping & Reporting Requirements Sections 13, 14, 17 reporting of suspicious transactions & transactions exceeding the specified threshold limit retain record for 6 years or more from date account was closed or transaction completed / terminated

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA)

Customer Identification Section 16 Proper verification / documentation of Customer Identification particulars at account opening True Name Section 18 Account must not be opened with a fictitious, false or incorrect name [Note: penalty - RM1m fine / 1 year imprisonment / both]

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA)

Secrecy Section 20 Secrecy and non-disclosure of information [Note also Section 79: preservation of secrecy] Protection Section 24 Protection of persons reporting civil, criminal or disciplinary action [Note: reporting must be made in good faith!]

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA)

Tipping Off Section 35 No tipping off or disclosing information to any other person! [Note: penalty - RM 1m fine / 1 year imprisonment / both]

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

MALAYSIAN ANTI MONEY LAUNDERING ACT 2001 (AMLA)

DEALING WITH ENFORCEMENT AGENCIES ON AMLA ORDERS Provision in the AMLA allows Enforcement Agency / Public Prosecutor to make certain orders: - Section 44: freezing of any property - Section 50: seizure of movable property in a FI - Section 51: seizure of immovable property (including in a FI)

FINANCIAL SECTOR TALENT ENRICHMENT PROGRAMME

Thank you