Marzunisham Omar: Welcoming remarks - 23rd Asia/Pacific Group
on Money Laundering (APG) Typologies Workshop
Welcoming remarks by Mr Marzunisham Omar, Deputy Governor of the Central Bank of
Malaysia (Bank Negara Malaysia), at the 23rd Asia/Pacific Group on Money Laundering (APG)
Typologies Workshop, 9 November 2021.
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It is my pleasure to welcome all of you to the 23rd APG Typologies Workshop. This is the second
time the Annual Typologies Workshop is held virtually. Malaysia is pleased to jointly host the
Workshop with the APG Secretariat.
After more than a year of COVID-19, the past few months have seen the ease of the pandemic
and the lifting of restrictions by most countries. Despite the challenging environment, it is
encouraging to note that the authorities remain vigilant in the fight against money laundering (ML),
terrorism financing (TF) and proliferation financing (PF). Indeed, we are facing new and
increasing challenges following the increasing sophistication of financial tools and products.
This morning, allow me to share four observations on the recent developments and challenges
that are pertinent in strengthening AML/CFT/CPF measures. First, on the rapid changes of
ML/TF/PF methods and risks that are driven by technology. As the shift towards
digitalisation especially in the financial industry accelerates, the emerging risks presented are
intensifying. The rapid change in technology sometimes result in AML/CFT/CPF measures
undertaken by authorities to be reactive. For example, we see this in the virtual asset sector
given its rapid development and widespread innovations.
As such, knowledge sharing platforms such as this Workshop are useful to enhance our
knowledge on the latest changes and trends in this space. It is also crucial to continuously adopt
new approaches and tools such as data analytics and artificial intelligence to elevate our
surveillance and enforcement capability in keeping up with the increasingly complex and
innovative financial instruments. Remaining reactive and defensive would limit our opportunity to
proactively shape the orderly development of the financial landscape while managing any
potential ML/TF/PF risks that accompany it.
The second observation is on the greater scrutiny by both the domestic stakeholders and
Revelations of
global community on AML/CFT/CPF measures and implementation.
highprofile information such as Panama Papers, FINCEN leaks and more recently, the Pandora
Papers, have attracted great interest within the domestic and international communities on the
AML/CFT/CPF regime. This has led to higher expectations for authorities to take prompt action
against activities involving cross-border flow of illicit funds as well as the broader ML/TF/PF
threats. While efforts by the Financial Action Task Force (FATF) to enhance and provide greater
clarity on related Standards, including on transparency of beneficial ownership is underway,
authorities and gatekeepers are also expected to ensure that blind spots are effectively
addressed. More often than not, the information regarding these illicit activities resides with
multiple parties across the public and private sectors. Hence, any suspicion will only surface if
we are able to link and integrate that information. In this pursuit, greater collaboration among the
law enforcement agencies (LEAs) as well as between LEAs and the private sector is essential
for us to efficiently and effectively connect and assess all relevant information, which will no
doubt further strengthen our efforts to fight ML/TF/PF threats.
In this respect, it is observed that the Public-Private Partnership (PPP) is gaining momentum and
is fast becoming known as a key success factor for effective information sharing in the
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AML/CFT/CPF ecosystem. To quote some examples, the Joint Money Laundering Intelligence
Taskforce (JMLIT) established by the United Kingdom in 2016 has prompted a key shift in
addressing ML/TF threats. As of June 2020, JMLIT has completed over 750 cases and detected
more than 5,000 suspected accounts linked to financial crimes. Similar achievement was also
experienced by the Fintel Alliance in Australia where within the span of one year between 2018 to
2019, over 300 cases were successfully completed through the partnership. Other countries
within the region have also followed suit - Hong Kong's Fraud and Money Laundering Intelligence
Taskforce (FMLIT) and Singapore's Anti-Money Laundering and Countering the Financing of
Terrorism Industry Partnership (ACIP). In Malaysia, the PPP is undertaken through the Financial
Intelligence Network (MyFINet), which involves collaboration and information sharing between
LEAs such as the Central Bank, Royal Malaysia Police and Malaysian Anti-Corruption
Commission, and private sectors such as financial institutions.
Given the significant potential of PPP, we have identified it as one of the APG Co-Chairs'
Priorities and we have also successfully conducted the first part of the PPP Technical Seminar
in July this year. For the upcoming PPP sessions in this Workshop, I believe speakers will
explore more advanced topics including the operational and technical challenges of diverse PPP
arrangements as well as the future of PPP, especially in relation to possible regional
collaborative efforts. I trust that this would bring the conversation to the next level and encourage
similar set-ups by other APG members.
The third observation is on changes in the international AML/CFT/CPF standards. The FATF
is continuously enhancing its Standards through various workstreams to ensure the availability of
up-to-date policy responses and to facilitate better incorporation of the Standards into domestic
laws and regulations. As you are aware, a recent change to the FATF Standards was the
introduction of a requirement to identify and assess the risks of potential breaches,
nonimplementation or evasion of the targeted financial sanctions related to PF and to take action to
mitigate these risks. As authorities and the private sector are expected to promptly take
necessary steps to implement this new requirement, it is timely for our Workshop to have further
discussions on this matter.
Compared to ML and TF, proliferation financing is usually considered a relatively new area and
less understood. To date, only a few countries have conducted their Proliferation Financing Risk
Assessment (PFRA), for example, Cayman Islands, Gibraltar, Latvia, Portugal, and the United
2 3
States, as well as the recent assessments by Malaysia and the United Kingdom in 2021. To
further facilitate APG members, the Workshop this week will discuss the strategies and best
practices for conducting the PFRA including challenges faced by the public and private sectors
as well as sharing of latest trends and typologies on PF.
My fourth and final observation is on the importance of greater understanding of risk
associated with AML/CFT/CPF measures which will help us mitigate any unintended
consequences from such measures. The FATF's recent project on mitigating unintended
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consequences of its Standards has found financial exclusion and de-risking as among the
consequences which are often observed from the incorrect understanding and implementation of
AML/CFT/CPF measures. Taking pre-emptive steps to better understand the risks will help us
avoid those potential consequences while supporting access to financial services and other
developmental agendas which are equally important.
Conclusion
I would like to encourage participants and delegates to take the opportunity to learn the latest
developments and perspectives from various experts during the Workshop this week. I hope that
participants will be able to draw new insights, consider relevant initiatives and emulate best
practices in your respective jurisdictions.
I also note that a diverse mix of participants including from the private sector has registered for
the Workshop which no doubt will enrich the discourse this week. Having both the public and
private sectors on the same platform would help to cement the shared responsibility mindset and
synergise our efforts in addressing the ML/TF/PF risks.
Finally, let me thank the APG Secretariat for coordinating this Workshop. Special thanks as well
to all speakers, moderators, and participants that took their time to be with us for the next three
days. With that, I wish all of you a successful and productive Workshop ahead.
1
RUSI, 5 years of growth of Public-Private Partnership to Fight Financial Crime, August 2020
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FATF Guidance on PF Risk Assessment and Mitigation
3
UK National Risk Assessment of Proliferation Financing
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Mitigating the Unintended Consequences of the FATF Standards