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Amendment Act · As enacted

Anti-Money Laundering and Anti-Terrorism Financing (Amendment) Act 2014

Amends the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 and the Anti-Money Laundering (Amendment) Act 2003

Official textFrom Laws of Malaysia Online, unchanged

s 1Short title and commencement

(1)

This Act may be cited as the Anti-Money Laundering and

Anti-Terrorism Financing (Amendment) Act 2014.

(2)

Except for section 78, this Act comes into operation on a date to be appointed by the Minister of Finance by notification in the Gazette, and the Minister of Finance may appoint different dates for the coming into operation of different provisions of this

Act.

(3)

Section 78 comes into operation on the date of the publication of this Act in the Gazette.

s 2Amendment of long title

The Anti-Money Laundering and Anti-Terrorism Financing

Act 2001 [Act 613], which is referred to as the “principal Act”

in this Act, is amended in the long title by substituting for the words “terrorist property and property involved in, or derived from, money laundering and terrorism financing offences” the words “property involved in or derived from money laundering and terrorism financing offences, as well as terrorist property, proceeds of an unlawful activity and instrumentalities of an offence”.

s 3Amendment of section 1

Subsection 1(1) of the principal Act is amended by substituting for the words “Anti-Money Laundering and Anti-Terrorism Financing

Act 2001” the words “Anti-Money Laundering, Anti-Terrorism

Financing and Proceeds of Unlawful Activities Act 2001”.

s 4Amendment of section 3

Subsection 3(1) of the principal Act is amended—

(a)

by substituting for the definition of “unlawful activity”

the following definition:

‘ “unlawful activity” means—

(a)

any activity which constitutes any serious offence or any foreign serious offence; or

(b)

any activity which is of such a nature, or occurs in such circumstances, that it results in or leads to the commission of any serious offence or any foreign serious offence, regardless whether such activity, wholly or partly, takes place within or outside Malaysia;’;

(b)

in the definition of “Bank Negara Malaysia” by substituting for the words “Central Bank of Malaysia Act 1958

[Act 519]” the words “Central Bank of Malaysia Act 2009 [Act 701]”;

Anti-Money Laundering and Anti-Terrorism

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(c)

by substituting for the definition of “proceeds of an unlawful activity” the following definition:

‘ “proceeds of an unlawful activity” means any property, or any economic advantage or economic gain from such property, within or outside Malaysia—

(a)

which is wholly or partly—

(i)

derived or obtained, directly or indirectly, by any person from any unlawful activity;

(ii)

derived or obtained from a disposal or other dealings with the property referred to in subparagraph (i); or

(iii)

acquired using the property derived or obtained by any person through any disposal or other dealings referred to in subparagraph (i) or (ii); or

(b)

which, wholly or partly, due to any circumstances such as its nature, value, location or place of discovery, or to the time, manner or place of its acquisition, or the person from whom it was acquired, or its proximity to other property referred to in subparagraph (a)(i),

(ii)

or (iii), can be reasonably believed to be property falling within the scope of subparagraph (a)(i), (ii) or (iii);’;

(d)

by substituting for the definition of “property” the following definition:

‘ “property” means –

(a)

assets of every kind, whether corporeal or incorporeal, moveable or immovable, tangible or intangible, however acquired; or

(b)

legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such assets, including currency, bank credits, deposits and other financial resources, traveller’s cheques, bank cheques, money orders, capital market products, drafts and letters of credit, whether situated within or outside Malaysia, and includes a legal or equitable interest, whether full or partial, in any such property;’;

(e)

by substituting for the definition of “financial institution”

the following definition:

‘ “financial institution” means –

(a)

a licensed bank, licensed insurer and investment bank under the Financial Services Act 2013

[Act 758];

(b)

a licensed international Islamic bank, licensed international takaful operator, licensed Islamic bank and licensed takaful operator under the Islamic Financial Services Act 2013

[Act 759];

(c)

a prescribed institution under the Development

Financial Institutions Act 2002 [Act 618];

(d)

a licensee under the Money Services Business

Act 2011 [Act 731];

(e)

a person licensed or registered under the

Capital Markets and Services Act 2007

[Act 671];

(f)

the central depository established under the

Securities Industry (Central Depositories)

Act 1991 [Act 453];

(g)

a bank licensee, an insurance licensee, a securities licensee and any entity licensed or registered under the Labuan Financial Services and Securities Act 2010 [Act 704];

(h)

an Islamic bank licensee, a takaful licensee, an Islamic securities licensee and any entity licensed or registered under the Labuan Islamic

Financial Services and Securities Act 2010

[Act 705]; and

(i)

a person prescribed by the Minister of Finance under section 12a;’;

(f)

by deleting the definition of “offshore financial institution”;

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(g)

by inserting after the definition of “reporting institution”

the following definition:

‘ “conveyance” includes any vessel, train, motor vehicle, aircraft and any other means of transport by which persons or goods can be carried;’;

(h)

by inserting after the definition of “terrorism financing offence” the following definition:

‘ “money laundering offence” means an offence under subsection 4(1);’;

(i)

by deleting the definition of “client”;

(j)

by substituting for the definition of “Labuan Offshore

Financial Services Authority” the following definition:

‘ “Labuan Financial Services Authority” means the Authority established under section 3 of the

Labuan Financial Services Authority Act 1996

[Act 545];’;

(k)

by inserting after the definition of “foreign State” the following definition:

‘ “customer” includes a client;’;

(l)

by deleting the definition of “money laundering”;

(m)

by inserting after the definition of “controller” the following definitions:

‘ “instrumentalities of an offence” means—

(a)

any thing which is used in, or in connection with, the commission of any unlawful activity;

(b)

any property which is wholly or partly used in, or in connection with, the commission of any unlawful activity, whether the thing or property is situated within or outside Malaysia;

“business” means—

(a)

any business registered under any written law providing for the registration of businesses;

(b)

a corporation incorporated or registered under the Companies Act 1965 [Act 125] and an associate of that corporation; or

(c)

any venture or concern in any trade, commerce, profession, vocation or any other similar activity, whether or not it is carried on for a pecuniary gain or profit, and whether or not conducted on a regular, repetitive or continuous basis, and includes all assets derived from or used in or for the purpose of carrying on such business activity, and all interests, rights and liabilities arising from such business activity;’;

(n)

by inserting after the definition of “premises” the following definition:

‘ “capital market products” has the same meaning as in the Capital Markets and Services Act 2007;’;

and

(o)

by inserting after the definition of “Securities Commission”

the following definition:

‘ “diminished in value”, in relation to any property, means the whole or part of the property being expended, utilised, destroyed, or being subjected to any dealing, process or other act, so that it ceases to exist, or is reduced in value or size, or is altered in character;’.

s 5Substitution of section 4

The principal Act is amended by substituting for section 4

the following section:

s 4“Offence of money laundering

(1)

Any person who—

(a)

engages, directly or indirectly, in a transaction that involves proceeds of an unlawful activity or instrumentalities of an offence;

Anti-Money Laundering and Anti-Terrorism

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(b)

acquires, receives, possesses, disguises, transfers, converts, exchanges, carries, disposes of or uses proceeds of an unlawful activity or instrumentalities of an offence;

(c)

removes from or brings into Malaysia, proceeds of an unlawful activity or instrumentalities of an offence;

(d)

conceals, disguises or impedes the establishment of the true nature, origin, location, movement, disposition, title of, rights with respect to, or ownership of, proceeds of an unlawful activity or instrumentalities of an offence, commits a money laundering offence and shall on conviction be liable to imprisonment for a term not exceeding fifteen years and shall also be liable to a fine of not less than five times the sum or value of the proceeds of an unlawful activity or instrumentalities of an offence at the time the offence was committed or five million ringgit, whichever is the higher.

(2)

For the purposes of subsection (1), it may be inferred from any objective factual circumstances that—

(a)

the person knows, has reason to believe or has reasonable suspicion that the property is the proceeds of an unlawful activity or instrumentalities of an offence;

(b)

the person without reasonable excuse fails to take reasonable steps to ascertain whether or not the property is the proceeds of an unlawful activity or instrumentalities of an offence.

(3)

For the purposes of any proceedings under this Act, where the proceeds of an unlawful activity are derived from one or more unlawful activities, such proceeds need not be proven to be from any specific unlawful activity.

(4)

A person may be convicted of an offence under subsection (1) irrespective of whether there is a conviction in respect of a serious offence or foreign serious offence or that a prosecution has been initiated for the commission of a serious offence or foreign serious offence.”.

s 6New section 4a

The principal Act is amended by inserting after section 4 the following section:

“Offence of structuring transactions to evade reporting requirement 4a. (1) No person shall structure, or direct, assist or participate in structuring, any transaction in the domestic or foreign currency to avoid the application of paragraph 14(1)(a).

(2)

Any person who contravenes subsection (1) commits an offence and shall on conviction be liable to a fine of not more than five times the aggregate sum or value of the transaction at the time the offence was committed or to imprisonment for a term not exceeding seven years or to both.

(3)

In determining whether a transaction was conducted in contravention of this section, the following matters may be taken into consideration:

(a)

the value of the money or property involved in each transaction;

(b)

the total value of the transactions;

(c)

the period of time over which the transactions took place;

(d)

the interval of time between any of the transactions;

(e)

the locations at which the transactions took place.”.

s 7Amendment of section 5

Section 5 of the principal Act is amended—

(a)

in subsection (1), by substituting for the words “money laundering” the words “a money laundering offence”;

and

(b)

by inserting after subsection (2) the following subsection:

Anti-Money Laundering and Anti-Terrorism

Financing (Amendment)

“(3) Any person who knowingly discloses any false information under this section commits an offence and shall on conviction be liable to imprisonment for a term not exceeding five years and to a fine not exceeding one million ringgit.”.

s 8Amendment of section 6

Subsection 6(5) of the principal Act is amended—

(a)

by substituting for the words “fifty thousand” the words

“one million”;

(b)

by substituting for the words “one year” the words “three years”; and

(c)

by substituting for the words “to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction” the words

“shall in addition be liable to a fine not exceeding three thousand ringgit for each day or part thereof during which the offence continues to be committed”.

s 9Amendment of section 8

Subsection 8(1) of the principal Act is amended by inserting after the words “reporting institution” the words “(if any)”.

s 10Amendment of section 9

Subsection 9(2) of the principal Act is amended by deleting the word “Offshore”.

s 11Amendment of section 10

Section 10 of the principal Act is amended—

(a)

in subsection (1), by inserting after the word “Minister”

the words “of Finance”; and

(b)

in subsection (3)—

(i)

by inserting after the words “section 14” the words “or any other information received by it or disclosed to it by any person under this Act”;

and

(ii)

in paragraph (b)—

(A)

in subparagraph (i), by inserting after the word “Minister” the words “of Finance”;

and

(B)

by inserting after the words “section 14” the words “or any other information received by or disclosed to the competent authority under this Act”.

s 12Amendment of section 12

Subsection 12(4) of the principal Act is amended—

(a)

by substituting for the words “one million” the words

“three million”; and

(b)

by substituting for the words “one year” the words “five years”.

s 13New section 12a

The principal Act is amended by inserting after section 12

the following section:

“Prescription of additional financial institutions 12a. The Minister of Finance may, on the recommendation of the competent authority, by order published in the Gazette, prescribe a person that is carrying on a financial business that is regulated or supervised by or subject to the oversight of a relevant regulatory or supervisory authority pursuant to the laws enforced by such regulatory or supervisory authority to be a financial institution for the purposes of the definition of “financial institution” under subsection 3(1).”.

Anti-Money Laundering and Anti-Terrorism

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s 14Substitution of section 14

The principal Act is amended by substituting for section 14

the following section:

s 14“Report by reporting institutions

(1)

A reporting institution shall promptly report to the competent authority—

(a)

any transaction exceeding such amount as the competent authority may specify;

(b)

any transaction where the identity of the person involved, the transaction itself or any other circumstances concerning that transaction gives any officer or employee of the reporting institution reason to suspect that the transaction involves proceeds of an unlawful activity or instrumentalities of an offence;

(c)

any transaction or property where any officer or employee of the reporting institution has reason to suspect that the transaction or property involved is related or linked to, is used or is intended to be used for or by, any terrorist act, terrorist, terrorist group, terrorist entity or person who finances terrorism.

(2)

For the purposes of this section, “transaction” includes any attempted transaction or proposed transaction.”.

s 15New section 14a

The principal Act is amended by inserting after section 14

the following section:

“Prohibition against disclosure of reports and related information 14a. (1) Any person who knows or has reason to suspect that a reporting institution is proposing to report, is reporting or has lodged a report under section 14 or is proposing to provide, is providing or has provided any other related information to the competent authority and discloses such knowledge, suspicion or information to any other person commits an offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding five years or to both.

(2)

Any person to whom a disclosure of any knowledge, suspicion or information in contravention of subsection (1) has been made who makes a record of the knowledge, suspicion or information, or further discloses that knowledge, suspicion or information to any other person in any circumstances commits an offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding five years or to both.

(3)

Subsections (1) and (2) do not apply to the disclosure of information by a person if the disclosure is made—

(a)

in the course of acting in connection with the performance of his duties or the exercise of his functions under this Act;

(b)

for the purpose of informing of the risks involved in dealing with a particular customer, to a related corporation of the reporting institution where that related corporation is incorporated in Malaysia and is engaged in financial services in Malaysia;

(c)

in the course of acting in connection with the performance of his duties as a director, officer or employee of a reporting institution, to the supervisory authority of the reporting institution; or

(d)

with the written authorisation of the competent authority.

(4)

For the purposes of subsection (3), “related” in relation to a corporation means related within the meaning of section 6

of the Companies Act 1965.”.

Anti-Money Laundering and Anti-Terrorism

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s 16Substitution of section 16

The principal Act is amended by substituting for section 16

the following section:

s 16“Customer due diligence

(1)

A reporting institution—

(a)

shall not open or operate any anonymous account or any account which is in a fictitious, false or incorrect name;

(b)

shall not establish or conduct any business relationship, transaction or activity involving a fictitious, false or incorrect name; and

(c)

shall maintain—

(i)

accounts in the name of an account holder;

and

(ii)

records or information of any business relationship, transaction or activity in the name of a customer.

(2)

A reporting institution shall undertake customer due diligence measures in all or any of the following circumstances:

(a)

establishing or conducting a business relationship, conducting any transaction with a customer or carrying out any activity for or on behalf of a customer, whether the customer is an occasional or usual customer, including when opening a new account or passbook, entering into any fiduciary transaction, renting of a safe deposit box, performing any other transaction or activity as the competent authority may specify;

(b)

the transaction or activity to be carried out exceeds such amount as the competent authority may specify;

(c)

there is reasonable suspicion of the commission of a money laundering offence or a terrorism financing offence;

(d)

there is reasonable doubt about the veracity or adequacy of previously obtained customer identification data.

(3)

A reporting institution, in undertaking customer due diligence measures, shall—

(a)

ascertain the identity, representative capacity, domicile, legal capacity, occupation or business purpose of any person, whether he is an occasional or usual customer;

(b)

verify, by reliable means or from an independent source, or from any document, data or information, the identity, representative capacity, domicile, legal capacity, occupation or business purpose of any person, through the use of documents which include identity card, passport, birth certificate, driver’s licence, constituent document or any other official or private document as well as other identifying information relating to that person, whether he is an occasional or usual customer;

(c)

verify the identity and authority of any person purporting to act on behalf of a customer in the opening of an account, the conduct of any transaction or the carrying out of any activity;

(d)

take reasonable steps to obtain and record information about the true identity of any person on whose behalf an account is opened or a transaction or activity is conducted if there is reasonable doubt that the person is not acting on his own behalf, particularly where the person is not conducting any commercial, financial or industrial operations in a foreign State where the person has his headquarters or domicile;

and

(e)

take reasonable steps to verify the identity of natural persons who own or exercise effective control over a customer who is not a natural person.

(4)

A reporting institution shall conduct ongoing due diligence on all accounts, business relationships, transactions and activities.

Anti-Money Laundering and Anti-Terrorism

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(5)

The competent authority shall, upon consultation with the relevant supervisory authority of a reporting institution

(if any), issue such directions or guidelines to a reporting institution on the undertaking of customer due diligence measures as it considers necessary—

(a)

to give full effect to internationally accepted standards for the detection or prevention of a money laundering offence or terrorism financing offence; and

(b)

to specify additional customer due diligence measures to be undertaken by a reporting institution.

(6)

A reporting institution shall record any information, data or details obtained under this section and shall, upon request in writing, provide a copy of such record to the competent authority.

(7)

For the purposes of this Part—

(a)

“transaction” and “activity” includes a single transaction or activity or a series of transactions or activities, as the case may be; and

(b)

“person” includes any person who is a nominee, agent, beneficiary, beneficial owner or principal and any other person specified by the competent authority in relation to a transaction or activity.”.

s 17Amendment of section 17

Section 17 of the principal Act is amended—

(a)

by substituting for subsection (1) the following subsection:

“(1) Notwithstanding any provision of any written law pertaining to the retention of documents, a reporting institution shall maintain any account, record, business correspondence and document relating to an account, business relationship, transaction or activity with a customer or any person as well as the results of any analysis undertaken, as the case may be, for a period of at least six years from the date the account is closed or the business relationship, transaction or activity is completed or terminated.”;

(b)

in subsection (2)—

(i)

by inserting after the word “specify” the words

“under section 14”;

(ii)

by substituting for the words “not less than” the words “at least”; and

(iii)

in the English language text, by substituting for the words “has been” the word “is”;

(c)

in subsection (3), by substituting for the word “record”

the words “account, record, business correspondence and document”; and

(d)

in subsection (4)—

(i)

by substituting for the words “one million” the words “three million”; and

(ii)

by substituting for the words “one year” the words

“five years”.

s 18Substitution of section 18

The principal Act is amended by substituting for section 18

the following section:

“Opening of account or conducting business relationship, transaction or activity in fictitious, false or incorrect name

s 18

(1)

No person shall—

(a)

open, operate or authorise the opening or the operation of an account; or

(b)

establish, conduct or perform any business relationship, transaction or activity, with a reporting institution in a fictitious, false or incorrect name.

(2)

Where a person is commonly known by two or more names, the person shall not use one of those names when—

(a)

opening, operating or authorising the opening or operation of an account; or

Anti-Money Laundering and Anti-Terrorism

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(b)

establishing, conducting or performing any business relationship, transaction or activity, with a reporting institution unless the person has previously disclosed the other name or names to the reporting institution.

(3)

Where a person using a particular name in his dealings with a reporting institution discloses to it a different name or names by which he is commonly known, the reporting institution shall make a record of the disclosure, and shall, upon request in writing from the competent authority, give the competent authority a copy of that record.

(4)

For the purposes of paragraphs (1)(a) and (2)(a)—

(a)

a person opens an account in a fictitious, false or incorrect name if that person, in opening the account, or becoming a signatory to the account, uses a name other than a name by which the person is commonly known;

(b)

a person operates an account in a fictitious, false or incorrect name if that person does any act or thing in relation to the account (whether by way of making a deposit or withdrawal or by way of communication with the reporting institution concerned or otherwise)

and, in doing so, uses a name other than a name by which the person is commonly known; and

(c)

an account is in a false name if it was opened in a fictitious, false or incorrect name, whether before or after the commencement of this section.

(5)

For the purpose of paragraphs (1)(b) and (2)(b)—

(a)

a person establishes a business relationship, transaction or activity in a fictitious, false or incorrect name if that person, in establishing such business relationship, transaction or activity, or becoming a signatory to any agreement or arrangement, uses a name other than a name by which the person is commonly known;

(b)

a person conducts or performs a business relationship, transaction or activity in a fictitious, false or incorrect name if that person does any act or thing in relation to such business relationship, transaction or activity (whether by way of communication with the reporting institution concerned or otherwise)

and, in doing so, uses a name other than a name by which the person is commonly known; and

(c)

a business relationship, transaction or activity is in a false name if it was established in a fictitious, false or incorrect name, whether before or after the commencement of this section.

(6)

Any person who contravenes this section commits an offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding five years or to both.”.

s 19Amendment of section 19

Paragraph 19(2)(b) of the principal Act is amended by inserting after the words “14,” the words “14a,”.

s 20Amendment of section 21

Paragraph 21(1)(c) of the principal Act is amended by substituting for the word “clients” the word “customers”.

s 21Amendment of section 22

Section 22 of the principal Act is amended—

(a)

in subsection (2), by substituting for the words “High

Court” the words “Magistrate’s Court”; and

(b)

in subsection (4)—

(i)

by substituting for the words “one hundred thousand”

the words “one million”;

(ii)

by substituting for the words “six months” the words “three years”; and

Anti-Money Laundering and Anti-Terrorism

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(iii)

by substituting for the words “to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction” the words “shall in addition be liable to a fine not exceeding three thousand ringgit for each day or part thereof during which the offence continues to be committed”.

s 22Deletion of section 23

The principal Act is amended by deleting section 23.

s 23Amendment of section 26

Section 26 of the principal Act is amended—

(a)

in paragraph (1)(b), by substituting for the words “client,”

the word “customer”; and

(b)

in subsection (2)—

(i)

by substituting for the words “one million” the words “three million”;

(ii)

by substituting for the words “one year” the words

“five years”; and

(iii)

s 24Amendment of section 27

Subsection 27(2) of the principal Act is amended—

(a)

by substituting for the words “one million” the words

“three million”;

(b)

by substituting for the words “one year” the words “five years”; and

(c)

by substituting for the words “to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction” the words

“shall in addition be liable to a fine not exceeding three thousand ringgit for each day or part thereof during which the offence continues to be committed”.

s 25Deletion of section 28

The principal Act is amended by deleting section 28.

Read on from s 26