Financial Crime World

Anti-Money Laundering Act: Seizure and Liquidation for Corporate Bodies

Introduction

The Anti-Money Laundering and Counter Terrorist Financing Act No. 29 has introduced new measures to combat money laundering and terrorist financing in Malaysia. Under the act, corporate bodies that engage in a pattern of money laundering offenses will be subject to seizure and liquidation.

Requirements for Corporate Bodies

  • Verify Customer Identity: Corporate bodies must establish the identity of their customers by obtaining official records, such as birth certificates or passports.
  • Maintain Accurate Records: Reporting persons, including banks and financial institutions, must maintain accurate and detailed records of all transactions. The records must be kept for a minimum period of five years from the date the relevant business or transaction was completed.
  • Report Suspicious Transactions: Reporting persons must report suspicious transactions within 24 hours of forming suspicion. This includes taking reasonable measures to ascertain the purpose and origin of the transaction, as well as preparing a report in the manner prescribed by regulations.

Consequences of Non-Compliance

Failure to comply with the provisions of the act can result in severe penalties, including:

  • Fines up to twice the market value of the property involved for individuals
  • Fines three times the market value of the property involved for body corporates
  • Imprisonment for up to two years for individuals

Key Definitions

  • Reporting Person: Any individual or body corporate who provides services for or on behalf of another person, including banks and financial institutions.
  • Politically Exposed Persons: Individuals who have held or hold prominent public functions, such as heads of state or government ministers.
  • Financial Intelligence Unit (FIU): Responsible for receiving reports of suspicious transactions and investigating money laundering offenses.

Conclusion

The Anti-Money Laundering Act aims to strengthen Malaysia’s efforts to combat money laundering and terrorist financing, and to protect the financial system from illicit activities. Reporting persons are expected to play a critical role in detecting and preventing these offenses, and must ensure that they maintain accurate records and report suspicious transactions promptly.