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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. Establishing an FIU AMLA National Coordination Committee to Counter Money Laundering

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Malaysian FIU –

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  1. 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

  2. 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 Overview

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

  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

  5. 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 Ministry of Finance Ministry of Foreign Affairs Ministry of Internal Security Royal Malaysian Customs Royal Malaysian Police Securities Commission Bank Negara Malaysia

  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

  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

  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.

  9. Organisational Structure Director Personal Assistant INTELLIGENCE MANAGEMENT STRATEGIC DEVELOPMENT Admin. Assistant Deputy Director Deputy Director Investigation Support Strategic and Policy Compliance Relationship Management Intelligence Analysis Managers Managers Manager Manager Senior Executives Senior Executives Senior Executives Senior Executives Clerical Officers

  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 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. Core partners of the FIU SUPERVISORY & REGULATORY AGENCIES FOREIGN FIUs FINANCE MINISTER • Bank Negara Malaysia • Securities Commission • Labuan Offshore Financial Services Authority • Companies Commission of Malaysia ENFORCEMENT AGENCIES FINANCIAL INTELLIGENCE UNIT • Bank Negara Malaysia • Royal Malaysian Police • Royal Malaysian Custom • Anti-Corruption Agency • Companies Commission Of Malaysia • Securities Commission SELF-REGULATORY ORGANISATIONS • 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. 15./04/2002 • Discount houses • Insurers • Insurance brokers • Takaful operators • Offshore banks • Offshore insurers • Offshore trust companies • 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 31/03/2004 • Stockbrokers • Futures brokers • w.e.f 30 September 2004 • Lawyers • Accountants • Company Secretaries • w.e.f 1/06/2002 • Money changers

  12. Issues and Resolutions

  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

  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

  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

  16. Intelligence Process Reporting Institution FIU Analysis Foreign FIUs Related Agencies Data Submission Database Exchange of information Provide input Analyses information Information for prosecuting Investigating Agencies Prosecuting Agency

  17. MR. JOHNNY DOE MR. RUDY FIASCO ARRESTED BANK Z OVERSEAS 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

  18. Issues and Resolutions • Issue: Ensuring compliance among reporting institutions • Resolutions: Establishing a comprehensive legal framework that consists of: • regulatory/ supervisory • compliance • enforcement

  19. Ensuring Compliance LEGAL FRAMEWORK COMPLIANCE FRAMEWORK REGULATORY FRAMEWORK ENFORCEMENT FRAMEWORK Enforcement Agencies Supervisory & Regulatory Agencies Reporting Institutions • Guidelines • Supervisory Framework • Informal Enforcement Framework Compliance Programme AMLA Investigation Reference Guide

  20. Supervisory Framework Management Oversight Internal Control Management Information System Policies and Procedures Human Resource and Training

  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 and highlight high risk areas to be reviewed

  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

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

  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

  25. Challenges

  26. Challenges • Organisational effectiveness • Implementation of FATF 40+9 Recommendations • Timely response to emerging ML/TF trends

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