Financial Crime World

Malaysia Tightens Grip on Terrorist Financing Risks and Mitigation Efforts

Government Reaffirms Commitment to Combating Money Laundering and Counter-Terrorism Financing (AML/CFT) Risks

Kuala Lumpur, July 26 - The Malaysian government has reaffirmed its commitment to developing a robust national framework against AML/CFT risks. Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz highlighted the country’s significant progress in combating these illicit activities during his address at the Annual Meeting of the Asia/Pacific Group on Money Laundering.

Key Developments and Initiatives

  • National Money Laundering and Terrorism Financing Risk Assessment 2020 (NRA): Identified corruption, smuggling, fraud, illicit drug trafficking, and organized crime as prevalent offenses giving rise to money laundering.
  • Comprehensive policy on disclosure of conflict-of-interest for government procurement: Implemented to enhance transparency and prevent financial crimes.
  • National Anti-Financial Crime Centre (NFCC): Established in 2020 to coordinate integrated operations among enforcement agencies, maintain a centralized data system, and carry out activities related to preventing financial crimes.

Enhanced AML/CFT Efforts

  • Strategic plan for 2020-2024: Aimed at reducing high-impact financial crime threats through a whole-of-government approach.
  • Multi-Agency Task Force: Leading joint operations across relevant enforcement agencies to combat illicit activities such as smuggling.
  • Revenue recovery targets: Set an ambitious target of recovering RM5 billion in lost revenue from cigarette and liquor smuggling over the next five years.

Progress and Achievements

  • Improved ranking in various dimensions: Voice and accountability, regulatory quality, rule of law, and control of corruption have seen significant improvements.
  • Disclosures of suspicious transaction reports: Led to 70 arrests for various offenses, with RM136 million in criminal proceeds frozen or seized, and revenue recovery exceeding RM255 million.

Commitment to AML/CFT Regime

  • National Anti-Corruption Plan (NACP) 2019-2023: Maintaining accountability and credibility of the judiciary, prosecution, and law enforcement agencies.
  • Whole-of-government approach: Recognized as essential in combating AML/CFT risks, with the National Coordination Committee to Counter Money Laundering expanded to include 17 agencies and ministries.

Preparation for FATF/APG Mutual Evaluation Exercise

  • Independent assessment of Malaysia’s AML/CFT regime: Expected to take place in 2024.
  • Identification of areas for improvement: The government accords great importance to this exercise, aiming to enhance the country’s AML/CFT efforts.