That is to ensure that the financial system and the broader economy are protected from threats of money laundering and the financing of terrorism and proliferation, thereby strengthening financial sector integrity and contributing to safety and security of the country. In relation to the Mutual Evaluation that will be undertaken from 13 to 25 November this year, I wish to inform that some of you will be called to meet the assessors during the on-site assessment in November. The purpose of the meeting is for the assessors to assess how effectively have AML/CFT measures been implemented by the reporting institutions. We have identified several potential institutions as per the criteria given by the assessors. If your institution is being selected, you will receive formal notification from us in due course. Of course, there are possibilities that the assessors may request to meet other institutions during the on-site assessment. Malaysian leadership and authorities are fully committed and unrelenting in the efforts to address money laundering and terrorist financing risks. For the country, an effective AML/CFT regime is critical to: •  Reduce the overall crime in the country;  •  Increase government revenue and reduce leakages in the economy;  •  Preserve the integrity and reputation of our financial system;  •  Create conducive environment for businesses and investors, and support the Government’s economic transformation agenda; and  •  Strengthen Malaysia’s reputation as a country committed to combat money laundering and terrorist financing.

The FATF Standards requires, amongst others, that countries and financial institutions identify and assess their money laundering and terrorist financing risks and apply AML/CFT measures that commensurate with the identified risks. Therefore, the two main purposes of the NRA are: •  Firstly: to identify, assess, and understand key money laundering / terrorist financing threats and vulnerabilities facing the country; and  •  Secondly: to apply appropriate control measures to mitigate the risks. The identification of money laundering and terrorist financing risks would enhance our understanding of the specific money laundering and terrorist financing threats in Malaysia, in particular the scale, sources and methods of money laundering and terrorist financing, and identify vulnerabilities and risks across the various sectors. This, in turn, will provide guidance to the authorities and reporting institutions in allocating and prioritizing AML/CFT resources efficiently and towards areas that present the highest risks and impact. Results of the NRA will also serve as input in applying the appropriate national AML/CFT strategy and policy response proportionate to the identified risks, such as, the AML/CFT Strategic Plan, amendments to the law, revision of guidelines/policies, guidance to reporting institutions, manpower review and budget allocation. Understanding of risks form the main principles in the FATF revised standards and methodology. Riskin the context of money laundering and terrorist financingis a function of three factors: threat, vulnerability and consequence, and the money laundering and terrorist financing risks assessment involves making judgments about these 3 factors.