Since the introduction of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 ("AMLATFPUAA"), the Government has taken a phased approach in imposing anti-money laundering ("AML") reporting obligations on various intermediaries and entities in the country. Whilst the initial phase of implementation was focused on financial institutions and capital market intermediaries, over the years, various other entities have been made reporting institutions ("RIs") under the AMLATFPUAA. The wide array of RIs now include financial institutions, stockbroking companies, fund managers, and recognised market operators such as peer-to-peer platforms and cryptocurrency exchanges. Professionals such as lawyers, accountants and company secretaries and various other entities including trust companies, dealers in precious metals or precious stones, moneylenders, casinos, and real estate agents have been subject to AML reporting requirements for several years. The obligations imposed upon such reporting entities revolve around conducting "Know Your Customer" (KYC) checks when onboarding new clients, carrying out ongoing customer due diligence during the course of the relationship, reporting suspicious transactions and proper recordkeeping. These requirements are currently set out in Bank Negara Malaysia’s (BNM) Policy Documents on Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions, and Designated Non-Financial Businesses and Non-Bank Financial Institutions, and the Securities Commission’s (SC) Guidelines on Prevention of Money Laundering and Terrorism Financing for Reporting Institutions in the Capital Market. RIs are required to adhere to these rules not only to counter money laundering but also terrorism financing and proliferation financing which is the financing of weapons of mass destruction.
Wading through AML rules can appear to be cumbersome and overwhelming at times. This, however, need not be the case. This Update seeks to point out five key points that RIs need to take heed of.