Malaysia legislation
Section 16
Section 16
Customer due diligence
(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
*NOTE—The Companies Act 1965 [Act 125] has since been repealed by the Companies Act 2016
[Act 777] which comes into operation on 31 January 2017–see subsection 620(1) of Act 777.
**NOTE—The provisions of section 16 of the Act shall be invoked in respect of persons licensed to carry on money services business as defined in the Money Services Business Act 2011 [Act 731]–see P.U. (A)
144/2014 which comes into operation on 27 May 2014.
Anti-Money Laundering, Anti-Terrorism 35
Financing and Proceeds of Unlawful
Activities 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,
36 Laws of Malaysia 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.
(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—
Anti-Money Laundering, Anti-Terrorism 37
Financing and Proceeds of Unlawful
Activities
(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.
Retention of records