Malaysian FIU – Establishing an FIU, Issues and ResolutionsBy

1. Malaysian FIU –

International Seminar on Anti-Money Laundering
Malaysian FIU –
Establishing an FIU, Issues and Resolutions
30 March 2005
By:
Datuk Zamani Abdul Ghani
Deputy Governor
Bank Negara Malaysia
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2. Overview

Establishing 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
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3.

ANTI-MONEY LAUNDERING ACT 2001 (AMLA)
April 2000
October 2000
Inaugural meeting of National Co-ordinating
Committee to Counter Money Laundering (NCC)
Malaysian Government approved AMLA
concept paper
May 2001
Dewan Rakyat (Lower House) passed AMLA
June 2001
Dewan Negara (Upper House) passed AMLA
January 2002
December 2003
AMLA came into force
AMLA (Amendment) Act 2003 gazetted as law
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FIU- Malaysian Experience

4. 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
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FIU- Malaysian Experience

5. NCC Members

Anti-Corruption
Agency
Ministry of Finance
Attorney-General’s
Chambers
Ministry of Foreign
Affairs
Companies
Commission of
Malaysia
Ministry of Internal
Security
Royal Malaysian
Customs
Inland Revenue Board
Labuan Offshore
Financial Services
Authority
Bank Negara
Malaysia
Royal Malaysian
Police
Securities
Commission
Ministry of Domestic
Trade and Consumers
Affairs
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FIU- Malaysian Experience

6. 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
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FIU- Malaysian Experience

7. 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
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FIU- Malaysian Experience

8. Mission and Purpose

Mission
Formulate and implement AML/CFT laws
and measures to deter and detect financial
crimes by gathering and sharing financial
intelligence
Purpose
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.
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FIU- Malaysian Experience

9. Organisational Structure

Director
Personal
Assistant
INTELLIGENCE
MANAGEMENT
STRATEGIC
DEVELOPMENT
Deputy Director
Strategic
and Policy
Admin.
Assistant
Compliance
Managers
Senior
Executives
Senior
Executives
Deputy Director
Relationship
Management
Intelligence
Analysis
Investigation
Support
Manager
Managers
Manager
Senior
Executives
Senior
Executives
Clerical
Officers
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FIU- Malaysian Experience

10. 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 valueadded 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
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FIU- Malaysian Experience

11. Core partners of the FIU

SUPERVISORY &
REGULATORY AGENCIES
FOREIGN FIUs
• Bank Negara Malaysia
• Securities Commission
• Labuan Offshore Financial Services
Authority
• Companies Commission of
Malaysia
FINANCE MINISTER
Bank Negara Malaysia
Royal Malaysian Police
Royal Malaysian Custom
Anti-Corruption Agency
Companies Commission Of
Malaysia
• Securities Commission
FINANCIAL
INTELLIGENCE UNIT
SELF-REGULATORY
ORGANISATIONS
ENFORCEMENT
AGENCIES
• Bar Council
• Malaysian Institutes of Accountants
• Malaysian Institute of Chartered
Secretaries and Administrators
• Other company secretaries bodies
REPORTING INSTITUTIONS
w.e.f. 15/01/2002
Commercial banks
Merchant banks
Finance companies
Islamic banks
w.e.f 31/03/2004
• Stockbrokers
• Futures brokers
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
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w.e.f 15/01/2003
Pilgrims Fund Board
Pos Malaysia Berhad
Bank Simpanan Nasional
Bank Kerjasama Rakyat
Malaysia Berhad
• Licensed casino
w.e.f 30 September 2004
• Lawyers
• Accountants
• Company Secretaries
FIU- Malaysian Experience

12. Issues and Resolutions

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13. 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
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FIU- Malaysian Experience

14. 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
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FIU- Malaysian Experience

15. 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
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FIU- Malaysian Experience

16. Intelligence Process

Reporting
Institution
FIU
Analysis
Related
Agencies
Foreign FIUs
Exchange of
information
Data
Submission
Database
Provide input
Analyses information
Investigating
Agencies
Information for
prosecuting
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Prosecuting
Agency
FIU- Malaysian Experience

17.

MR.
JOHNNY
DOE
MR. RUDY
FIASCO
BANK Z
OVERSEAS
ARRESTED
BANK Y
OVERSEAS
Inward
Transfer
Outward
Transfer
MR. JOHNNY DOE
MR. JOHN DOE
MR. JOHN DOE
BANK A
BERHAD
BANK B
BERHAD
BANK C
BERHAD
MR. RUDY FIASCO
ROYAL MALAYSIAN
POLICE
FIU Bank Negara
Malaysia
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FIU- Malaysian Experience

18. Issues and Resolutions

Issue: Ensuring compliance among
reporting institutions
Resolutions: Establishing a comprehensive
legal framework that consists of:
regulatory/ supervisory
compliance
enforcement
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FIU- Malaysian Experience

19. Ensuring Compliance

LEGAL
FRAMEWORK
REGULATORY
FRAMEWORK
COMPLIANCE
FRAMEWORK
ENFORCEMENT
FRAMEWORK
Supervisory &
Regulatory Agencies
Reporting
Institutions
Enforcement
Agencies
Compliance
Programme
AMLA Investigation
Reference Guide
• Guidelines
• Supervisory Framework
• Informal Enforcement
Framework
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FIU- Malaysian Experience

20. Supervisory Framework

Management
Oversight
Internal Control
Management
Information
System
Policies and
Procedures
Human Resource
and Training
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FIU- Malaysian Experience

21. 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
high risk areas to be reviewed
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and highlight
FIU- Malaysian Experience

22. Issues and Resolutions

Issue: Building expertise among
stakeholders
Resolutions:
Conduct regular briefing sessions
Collaborate with training institutes
Collaborate with international bodies for
specialised training
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FIU- Malaysian Experience

23. Building expertise

FIU
Internal
Reporting
Institutions
• Awareness
programme
• Training in
collaboration with
training institutes
External
SRAs, SROs
and LEAs
• Awareness
programme
• Training in
collaboration with
training institutes
and international
bodies
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International Orgns.
(ASEM,APG)
• Specialised training
programmes
• Training in
collaboration with
international bodies
FIU- Malaysian Experience

24. 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
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FIU- Malaysian Experience

25. Challenges

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26. Challenges

Organisational effectiveness
Implementation of FATF 40+9 Recommendations
Timely response to emerging ML/TF trends
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FIU- Malaysian Experience