BNM - AML/CFT/CPF Newsletter 01/2024

1.

Malaysia’s Mutual Evaluation Updates

Malaysia is currently undergoing the Mutual Evaluation (ME) exercise from April 2024 to December 2025. This exercise assesses a country's level of compliance and effectiveness of international standards i.e. FATF Recommendations on anti-money laundering, countering the financing of terrorism, and countering the financing of proliferation of weapons of mass destruction (AML/CFT/CPF). Malaysia has submitted the technical compliance write-up on 17 June 2024.

The ME Onsite visit will take place in February 2025 where Malaysia will be receiving a team of international experts from several countries. Reporting Institutions (RIs) are urged to continuously improving their compliance culture to demonstrate an effective AML/CFT/CPF regime. RIs should ensure implementation of AML/CFT/CPF requirements, including to screen all customers against the Sanction Lists, remain vigilant of red flags for suspicious transactions, and promptly submit suspicious transaction reports (STRs) to Bank Negara Malaysia (BNM) where necessary.

2.

Preparation for Data and Compliance Report (DCR) 2024

Since 2020, DNFBP and NBFI reporting institutions (RI) are required to submit mandatory annual compliance report i.e. DCR, which covers important areas of the RI’s exposures to ML/TF risks and their AML/CFT/CPF compliance level.

Submission for DCR2024 will be in 4th Quarter 2024 through the online DCR portal. Access to the portal will only be opened when the submission period starts. Please be reminded that non-submission of DCR may result in enforcement action on RIs, hence RIs are advised to make necessary preparation, in particular on information availability, prior to DCR issuance.

3.

Heightened Enforcement Action against Non-Compliance

In recent years, countries worldwide have heightened enforcement actions against various non-compliances with AML/CFT/CPF requirements, including RIs and their officers in the DNFBPs sectors. For examples:

• HMRC issue fines to estate agents for failing to register for AML supervision-FCS Compliance
• The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), imposed penalty for failing to comply with federal anti-money-laundering rules-CTV News
• Jeweller charged for failing to perform due diligence for suspected money laundering in gold transactions-CNA
• Law firm Clyde & Co fined $635K for breaching UK money laundering rules-Reuters
• Former Las Vegas casino executive sentenced to year of probation in bookmaking money laundering case (msn.com)

On 29 January 2024, BNM imposed a compound of RM96,250 on Habib Jewels Sdn. Bhd for its failure to promptly submit STRs to BNM. The enforcement action taken was in line with the approach and processes outlined in the recently published Enforcement Approach document.

4.

Issuance of Red Flags and Typologies Report for Company Secretaries and Accountants

Following the report issue to the Lawyers in 2022, Bank Negara Malaysia has issued the Red Flags and Typologies Report for Company Secretaries and Accountants on 10 May 2024. The reports highlight vulnerabilities of the company secretary and accounting sectors that can be abused for money laundering and terrorism financing activities as well as relevant red flags for the purpose of identifying and reporting suspicious transactions.

5.

Directive on Targeted Financial Sanctions relating to Proliferation Financing (TFS-PF)

The Ministry of Investment, Trade and Industry (MITI) has issued a revised Directive on Targeted Financial Sanctions Relating to Proliferation Financing (TFS-PF), which came into effect on 7 June 2024.