Reporting A Suspicious Transaction Under AMLA 2001

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Reporting A Suspicious Transaction Under AMLA 2001

April 30, 2021 Litigation Advisory & Strategy Public Interest Disputes 0

Anti-Money Laundering, Anti-Terrorism Financing And Proceeds of Unlawful Activities Act, or AMLA for short, is a piece of legislation created for the purpose of punishing those who commit money laundering activities and/ or those who commit the act of financing terrorist activities. 

Money Laundering? Financing Terrorist Activities? What Is That All About?

Money laundering is a process of converting cash or property derived from criminal activities to give it a legitimate appearance. It is a process to clean ‘dirty money’ in order to disguise its criminal origin.

On the other hand, financing terrorist activities (terrorism financing) is the act of providing financial support, funded from either legitimate or illegitimate source, to terrorists or terrorist organisations to enable them to carry out terrorist acts or will benefit any terrorist or terrorist organisation. While most of the funds originate from criminal activities, they may also be derived from legitimate sources, for example, through salaries, revenues generated from a legitimate business or the use of non-profit organisations to raise funds through donations.

When should suspicion be raised?

The short answer is this: when the money is transacted between parties:

  1. appears unusual;
  2. has no clear economic purpose;
  3. appears illegal;
  4. does not commensurate with the customer’s profile or business activities;
  5. involves proceeds from unlawful activity; or
  6. indicates that the customer is involved in money laundering or terrorism financing activities.

So, what to do?

Report the suspicious activity. Under section 14(1) of the Act, a reporting institution (i.e. any person, including branches and subsidiaries outside Malaysia of that person, who carries on any activity listed in the First Schedule of the Act) shall promptly report to the competent authority:

  1. Any transaction exceeding such amount as the competent authority may specify; 
  2. 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 unlawful activity or instrumentalities of an offence; 
  3. 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 the person who finances terrorism. 

How to report?

Submit a suspicious transaction report (STR) Form to the Financial Intelligence and Enforcement Department of Bank Negara Malaysia.

What to provide?

  1. The information on the person conducting the transaction;
  2. The information on the account holder or beneficiary of the transaction;
  3. The details of the transaction, such as the type of products or services and the amount involved;
  4. A description of the suspicious transaction or its circumstances; and
  5. Any other relevant information that may assist the Financial Intelligence and Enforcement Department in identifying potential offences and individuals or entities involved.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information.

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