Marzunisham Omar: Opening remarks - Malaysia Assessed Country
Training
Opening remarks by Mr Marzunisham Omar, Deputy Governor of the Central Bank of
Malaysia (Bank Negara Malaysia), at the Malaysia Assessed Country Training, Kuala
Lumpur, 15 May 2024.
* * *
It is my honour to be able to address all of you this morning. I am heartened to see
many representatives from government and law enforcement agencies here, all of
whom share in our commitment and responsibility in implementing measures to further
strengthen anti-money laundering, as well as countering the financing of terrorism and
proliferation of weapons of mass destruction. I would like to express my gratitude to our
colleagues from the FATF-APG Secretariat, whose sharing of insights and perspectives
on the end-to-end mutual evaluation processes will certainly be valuable to all of us
here today.
I'll begin this remark with a brief overview on where we are with regards to the Mutual
Evaluation, or ME, process. As you are aware, Malaysia is among the first set of
countries that will undergo the FATF's fifth round of the ME. This will first begin with the
submission of the Technical Compliance on selected FATF recommendations in June
2024, then followed by the submission of the effectiveness of AML/CFT/CPF in
September 2024, before finally the on-site visit in February 2025. The ME report is
scheduled to be tabled during the FATF Plenary in October 2025.
In gearing up preparations for the coming ME milestones, we have sought to engage
various key stakeholders at all levels involved. In recent months, we have undertaken a
series of both high-level engagements and operations-focused discussions with a
multitude of regulatory, supervisory and law enforcement agencies. These
crossagency interactions have resulted in the implementation of more than 100 key
recommended actions (KRAs) to strengthen our AML/CFT/CPF regime. In this regard, I
would like to express my sincere gratitude to all of you for the inputs shared and your
teams' unwavering support and commitment to implementing these KRAs.
Additionally, in our recent mock run of the ME, held between 4 to 6 March 2024, our
teams had the opportunity to familiarise ourselves with the onsite interview process,
where I trust we gained insights on the expectation of assessors and identified
remaining areas for further improvement in our AML/CFT/CPF measures.
Ladies and gentlemen,
As a member of FATF, Malaysia holds itself to the highest levels of integrity in adhering
to international AML/CFT/CPF standards. As we all know, crimes today transcend
borders, and in response to this, Malaysia has also forged and maintained strong
relationships with our foreign counterparts, particularly where intelligence-sharing and
investigations are concerned. Additionally, our AML/CFT/CPF regime is anchored by a
robust surveillance system, which in turn helps ensure the effectiveness and timeliness
of enforcement actions by the relevant law enforcement agencies.
On this note, in 2023, Bank Negara Malaysia (BNM) had undertaken a total of 291
supervisory and enforcement actions on financial institutions, and forfeited assets from
illegal activities amounting to approximately RM 11 million. The Financial Intelligence
Unit of BNM had also shared financial intelligence with domestic law enforcement
agencies and more than 50 foreign FIUs, with 71% of these disclosures related to
highrisk crimes.
We do not, and cannot, combat financial crimes alone. Indeed, our regulatory and
enforcement counterparts have played an equally critical role in this respect. The
Malaysian Anti-Corruption Commission, or MACC, for example, has made important
and significant progress in graft-busting, including the opening of a total of 776
investigation papers, resulting in 869 arrests and a total of 326 charges brought to court
between January and August 2023. Our counterpart, the Commercial Crime
Investigation Department of the Royal Malaysia Police has also charged a total of 4,880
cases in court between January and April 2024. These efforts are reflective of
Malaysia's keen determination to combat financial crimes and preserve the integrity of
our financial system.
While we have made commendable progress, we should not be complacent. ML/TF/PF
risks continue to evolve, and if we let our guard down, it will pose serious threats to our
financial system, our economy, our society, and our country. On that note, I would like
to elaborate on five strategic priorities in our effort to further strengthen our national AML
/CFT/CPF regime:
First of these is the new National Coordination Committee to Counter Money
Laundering Roadmap that is currently being developed as we refresh our National Risk
Assessment. This new roadmap, like the existing one, will outline key initiatives in the
areas of investigation, enforcement, coordination, and capacity building. Improvements
and refinements will be made to ensure our AML/CFT/CPF continue to be
fit-forpurpose amid significant global and national developments that have occurred in recent
years, as well as taking into account what we have learnt from our previous
experiences in these areas.
Second, futureproofing the legal framework. We are currently reviewing our primary
AML/CFT/CPF legislation, the Anti-Money Laundering, Anti-Terrorism Financing and
Proceeds of Unlawful Activities Act 2001 (AMLA), to address gaps and implementation
issues, particularly in matters relating to regulation, supervision and enforcement. Other
crucial laws, such as the Companies Act 2016, are also being amended to elevate
beneficial ownership reporting, which is key in enhancing transparency.
Third, identification of emerging risks. Targeted risk assessments are currently being
updated to sharpen our understanding in the areas of proliferation financing, virtual
assets, legal persons and legal arrangements. Our particular focus at present is on
vulnerabilities associated with beneficial ownership and foreign-created entities.
Fourth, public-private sector collaboration. Combating ML/TF/PF warrants a
whole-ofnation approach, and the strength of alignment and coordination between the public
and private sectors are key elements of this nexus. One initiative being undertaken in
this respect is the development of the National Fraud Portal, a collaboration involving
BNM and the private sector that complements the National Scam Response Centre, or
NSRC, in responding to scams. The portal will expedite the tracing of stolen funds, thus
enabling prompt action to be taken against scammers.
Fifth, strengthening coordination for joint actions. Tackling complex financial crimes
requires collective commitment with respect to timely information sharing, technical
assistance, continuous training, and optimal use of technological tools. Our initiatives in
refining these areas of coordination over the years have paid off, with enforcement
actions being conducted increasingly frequently on a joint basis. Joint raids and arrests
coordinated by the National Anti-Financial Crime Centre (NFCC) and Multi-Agency
Task Force (MATF) have led to investigations and prosecutions of ML and predicate
offences. For instance, in the Ops Tropicana case, timely financial intelligence-sharing
and intelligence-based investigations enabled coordinated joint actions by our law
enforcement agencies. In this case, investigators uncovered professional enablers,
such as accountants and company secretaries facilitating the operations of illegal
syndicates.
While demanding, I am confident that our collective experience, strengthened
coordination, and adaptive enhancements to our AML/CFT/CPF regime will allow us to
execute these strategic priorities effectively in the coming years.
Ladies and gentlemen,
The FATF is continuously enhancing its standards to ensure policy responses remain
up-to-date, and Malaysia, in turn, has sought to keep abreast of these latest
developments. Allow me to briefly speak on some key initiatives we have taken to adapt
to our evolving landscape.
First, we have included virtual assets on our radar of new or emerging risks. As
cryptocurrencies and other digital assets become increasingly relied upon by criminals
to evade detection by authorities, there is an urgent need to accelerate and deepen our
understanding of the risks associated with these virtual assets. For instance, a major
step in this direction is the establishment of the Cryptocurrency Analysis Lab by the
Royal Malaysia Police in May 2022 under the Commercial Crime Department, a first of
its kind in Southeast Asia. This lab has been instrumental in facilitating the analysis and
investigation of cryptocurrency-related crimes. Also BNM, Securities Commission
Malaysia, Labuan Financial Services Authority and Royal Malaysia Police had also
jointly undertaken the Virtual Assets Risk Assessment study, to be published this year.
Second, we have tightened global beneficial ownership requirements. This is crucial in
preventing criminals from hiding their money behind corporate structures. I would like to
commend the Companies Commission of Malaysia for launching the Electronic
Beneficial Ownership System, with which companies can now identify, obtain, record,
update and submit beneficial ownership information to the Registrar.
Third, we have adopted enhanced FATF standards on asset recovery. An important
amendment to the NFCC Act will pave the way towards a centralised property
management system. Currently, there are several agency-driven initiatives to manage
assets more effectively, including refining internal processes.
Fourth, we continuously review Malaysia's exposure to TF/PF risks in light of global
developments. As a member state of the United Nations, we are committed to the UN
Security Council Resolutions, as well as FATF's Standards on targeted financial
sanctions. We are also cognisant of unilateral sanctions and welcome constructive
dialogue and information-sharing with other countries and information-sharing on
matters of mutual importance, including TF/PF intelligence. We stand ready to
cooperate and undertake necessary action in cases of clear violations against
international or Malaysian laws. This is in addition to the strong baseline we hold all our
financial institutions to in terms of compliance with AML/CFT/CPF requirements as set
out under our laws, which are in line with international standards.
Ladies and gentlemen,
Combating ML/TF/PF risks is a continuous endeavour where challenges are constantly
growing and evolving. Even as we continue to make strides in improving our
approaches and systems in addressing these risks, there is always the need to ensure
that we keep an eye on the horizon, particularly in terms of ensuring that all agencies
continue to have the necessary resources, skills and tools to effectively adapt to the
emerging risks that lie ahead and the capabilities they would demand of us.
In conclusion, I would like to stress that our ultimate and consistent goal is to ensure a
strong, robust and effective AML/CFT/CPF regime that will address financial crimes and
preserve the integrity of our financial system. In this sense, the ME is not a final
destination. Rather, it is an opportunity for us to take stock and demonstrate key
progress that has been made in addressing these risks. I trust that the diligent and
thorough preparations by all parties, including in executing our Key Recommended
Actions effectively, will be reflected in the ME's outcomes.
On that note, I wish all of you an insightful and productive exchange in the rest of
today's sessions.
Thank you.