Malaysian FIU
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Malaysia established various entities and frameworks to combat money laundering, including establishing a Financial Intelligence Unit (FIU) in Bank Negara Malaysia in 2001. When establishing the FIU, key issues that had to be addressed included building stakeholder confidence, ensuring reporting institution compliance, and developing expertise. Resolutions involved guidelines, training, and establishing legal and regulatory frameworks. The FIU works with domestic partners and international organizations to analyze financial intelligence and support law enforcement consistent with international standards. Ongoing challenges include organizational effectiveness and timely response to money laundering trends.
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Malaysian FIU
- 1. 1 Malaysian FIU –Malaysian FIU – Establishing an FIU, Issues and Resolutions By: Datuk Zamani Abdul Ghani Deputy Governor Bank Negara Malaysia 30 March 200530 March 2005 International Seminar on Anti-Money LaunderingInternational Seminar on Anti-Money Laundering
- 2. 2 OverviewOverviewEstablishing an FIU AMLA National Coordination Committee to Counter Money Laundering FIU in Bank Negara Malaysia Background Mission Organisational Structure Core partners of the FIU Issues and Resolutions Building Stakeholders’ Confidence Building Reporting Institutions’ Confidence in the FIU Ensuring Compliance among Reporting Institutions Building Expertise among Stakeholders Compliance with International Standards Challenges
- 3. FIU- Malaysian3 ANTI-MONEY LAUNDERING ACT 2001 (AMLA) April 2000 Inaugural meeting of National Co-ordinating Committee to Counter Money Laundering (NCC) Malaysian Government approved AMLA concept paper Dewan Rakyat (Lower House) passed AMLA Dewan Negara (Upper House) passed AMLA AMLA came into force October 2000 May 2001 June 2001 January 2002 AMLA (Amendment) Act 2003 gazetted as lawDecember 2003
- 4. FIU- Malaysian4 National Coordinating Committee to Counter Money Laundering (NCC) Coordinate the implementation of the national anti-money laundering / combating the financing of terrorism (AML/CFT) programme Develop and ensure proper implementation of measures to counter money laundering based on internationally accepted standards Comprises 13 government Ministries and agencies Each agency is responsible to study, provide information, and report the development of any decision in the NCC meeting
- 5. FIU- Malaysian5 NCC Members Anti-Corruption Agency Attorney-General’s Chambers Companies Commission of Malaysia Inland Revenue Board Labuan Offshore Financial Services Authority Ministry of Domestic Trade and Consumers Affairs Bank NegaraBank Negara MalaysiaMalaysia Ministry of Finance Ministry of Foreign Affairs Ministry of Internal Security Royal Malaysian Customs Royal Malaysian Police Securities Commission
- 6. FIU- Malaysian6 FIU in Bank Negara Malaysia - Background Established in August 2001 FIU in Bank Negara Malaysia Established under the Anti-Money Laundering Act 2001 (AMLA) The Minister of Finance appointed Bank Negara Malaysia as Competent Authority under the AMLA on 15 January 2002 Powers and functions under the AMLA
- 7. FIU- Malaysian7 Powers accorded by AMLA To receive suspicious transaction reports and analyse information Share financial intelligence with enforcement agencies To compile statistics and records pertaining to compliance with AMLA Make recommendations to the relevant supervisory authorities, enforcement agencies and reporting institutions Create training requirements and provide training for reporting institutions
- 8. FIU- Malaysian8 Mission and Purpose MissionMission Formulate and implement AML/CFT laws and measures to deter and detect financial crimes by gathering and sharing financial intelligence PurposePurpose To facilitate the implementation and enforcement of the AMLA nationwide and to co-operate with other countries in the global fight against money laundering and serious crimes.
- 9. FIU- Malaysian9 Organisational Structure Deputy DirectorDeputy Director IntelligenceIntelligence AnalysisAnalysis ClericalClerical OfficersOfficers SeniorSenior ExecutivesExecutives SeniorSenior ExecutivesExecutives SeniorSenior ExecutivesExecutives Strategic andStrategic and PolicyPolicy ComplianceCompliance InvestigationInvestigation SupportSupport RelationshipRelationship ManagementManagement Deputy DirectorDeputy Director DirectorDirector ManagersManagersManagersManagers ManagerManagerManagerManager SeniorSenior ExecutivesExecutives PersonalPersonal AssistantAssistant Admin.Admin. AssistantAssistant STRATEGICSTRATEGIC DEVELOPMENTDEVELOPMENT INTELLIGENCEINTELLIGENCE MANAGEMENTMANAGEMENT
- 10. FIU- Malaysian10 Core functions To carry out roles and functions set out in the AMLA Spearhead national efforts in combating money laundering and serious crimes by providing value- added contributions to national and international supervisory/enforcement agencies Formulate and implement comprehensive national anti-money laundering regime Promote awareness of money laundering and terrorism financing issues and the AMLA Act as Secretariat to, and coordinate, the NCC’s initiatives
- 11. FIU- Malaysian11 Core partners of the FIU SUPERVISORY &SUPERVISORY & REGULATORY AGENCIESREGULATORY AGENCIES • Bank Negara Malaysia • Securities Commission • Labuan Offshore Financial Services Authority • Companies Commission of Malaysia REPORTING INSTITUTIONSREPORTING INSTITUTIONS w.e.f. 15/01/2002 • Commercial banks • Merchant banks • Finance companies • Islamic banks w.e.f. 15./04/2002 • Discount houses • Insurers • Insurance brokers • Takaful operators • Offshore banks • Offshore insurers • Offshore trust companies w.e.f 1/06/2002 • Money changers w.e.f 15/01/2003 • Pilgrims Fund Board • Pos Malaysia Berhad • Bank Simpanan Nasional • Bank Kerjasama Rakyat Malaysia Berhad • Licensed casino ENFORCEMENT AGENCIESENFORCEMENT AGENCIES • Bank Negara Malaysia • Royal Malaysian Police • Royal Malaysian Custom • Anti-Corruption Agency • Companies Commission Of Malaysia • Securities Commission FOREIGN FIUsFOREIGN FIUs FINANCIAL INTELLIGENCE UNIT FINANCE MINISTERFINANCE MINISTER w.e.f 31/03/2004 • Stockbrokers • Futures brokers w.e.f 30 September 2004 • Lawyers • Accountants • Company Secretaries • Bar Council • Malaysian Institutes of Accountants • Malaysian Institute of Chartered Secretaries and Administrators • Other company secretaries bodies SELF-REGULATORYSELF-REGULATORY ORGANISATIONSORGANISATIONS
- 13. FIU- Malaysian13 Issue and Resolutions Issue: Building stakeholders’ confidence Resolutions: Regular consultation with the relevant supervisory and regulatory authorities Agreement sought on the implementation strategies Guidelines on AML/CFT issued by relevant regulatory and self-regulatory authorities AMLA briefing sessions Adequate manpower in the FIU
- 14. FIU- Malaysian14 Issues and Resolutions Issue: Building reporting institutions’ confidence in the FIU Resolutions: STR submitted in a highly confidential manner FIU deals directly with the compliance officer Compliance officers protected by civil, criminal or disciplinary actions under the AMLA for reporting STR Tipping off is an offence under the AMLA Financial Intelligence System (FINS) to ensure efficient and secure reporting
- 15. FIU- Malaysian15 Financial Intelligence System (FINS) To facilitate speedy and efficient submission of STRs or Account Statements (when the need arises) from the reporting institutions through secure online environment To ensure that submitted information is handled with high security and confidentiality without possible means of interruption throughout the transmission
- 16. FIU- Malaysian16 Intelligence Process InvestigatingInvestigating AgenciesAgencies ProsecutingProsecuting AgencyAgency DataData SubmissionSubmission DatabaseDatabase AnalysisAnalysis Foreign FIUsForeign FIUs RelatedRelated AgenciesAgencies ReportingReporting InstitutionInstitution Information for prosecuting Exchange of information Provide input Analyses information FIUFIU
- 17. FIU- Malaysian17 Inward Transfer BANK A BERHAD BANK Z OVERSEAS FIU Bank Negara Malaysia MR. JOHN DOE MR. RUDY FIASCO ROYAL MALAYSIAN POLICE BANK B BERHAD BANK C BERHAD MR. JOHN DOE MR. JOHNNY DOE MR. JOHNNY DOE ARRESTED BANK Y OVERSEAS MR. RUDY FIASCO Outward Transfer
- 18. FIU- Malaysian18 Issues and Resolutions Issue: Ensuring compliance among reporting institutions Resolutions: Establishing a comprehensive legal framework that consists of: regulatory/ supervisory compliance enforcement
- 19. FIU- Malaysian19 Ensuring Compliance LEGAL FRAMEWORKLEGAL FRAMEWORK REGULATORYREGULATORY FRAMEWORKFRAMEWORK COMPLIANCECOMPLIANCE FRAMEWORKFRAMEWORK ENFORCEMENTENFORCEMENT FRAMEWORKFRAMEWORK Supervisory &Supervisory & Regulatory AgenciesRegulatory Agencies Reporting InstitutionsReporting Institutions Enforcement AgenciesEnforcement Agencies • GuidelinesGuidelines • Supervisory FrameworkSupervisory Framework • Informal EnforcementInformal Enforcement FrameworkFramework ComplianceCompliance ProgrammeProgramme AMLA InvestigationAMLA Investigation Reference GuideReference Guide
- 20. FIU- Malaysian20 Supervisory Framework ManagementManagement OversightOversight Policies andPolicies and ProceduresProcedures Internal ControlInternal Control Human ResourceHuman Resource and Trainingand Training ManagementManagement InformationInformation SystemSystem
- 21. FIU- Malaysian21 Supervisory Framework Evaluate adequacy and effectiveness of AML/CFT policies, procedures, systems and controls Evaluate adequacy and effectiveness of AML/CFT programmes at FIs Determine compliance with AMLA Assess adequacy and comprehensiveness of AML/CFT training and education programmes Recommend corrective actions Assess AML risk management structure and highlight high risk areas to be reviewed
- 22. FIU- Malaysian22 Issues and Resolutions Issue: Building expertise among stakeholders Resolutions: Conduct regular briefing sessions Collaborate with training institutes Collaborate with international bodies for specialised training
- 23. FIU- Malaysian23 Building expertise FIUFIU ReportingReporting InstitutionsInstitutions SRAs, SROsSRAs, SROs and LEAsand LEAs • AwarenessAwareness programmeprogramme • Training inTraining in collaboration withcollaboration with training institutestraining institutes • AwarenessAwareness programmeprogramme • Training inTraining in collaboration withcollaboration with training institutestraining institutes and internationaland international bodiesbodies ExternalExternalInternalInternal • Specialised trainingSpecialised training programmesprogrammes • Training inTraining in collaboration withcollaboration with international bodiesinternational bodies International Orgns.International Orgns. (ASEM,APG)(ASEM,APG)
- 24. FIU- Malaysian24 Issues and Resolutions Issue: Compliance with international standards Resolutions: Membership and participation in various international groups Benchmarking – compliance with FATF’s 40+9 Recommendations Information sharing (MoUs) Mutual legal assistance
- 25. 25 Challenges
- 26. FIU- Malaysian26 Challenges Organisational effectiveness Implementation of FATF 40+9 Recommendations Timely response to emerging ML/TF trends