However, given that the controls on money laundering risks implemented at the financial institutions are increasingly tightened, there is this emerging consequence that DNFBPs, particularly the legal professionals, are increasingly becoming more attractive for the criminals to launder their ill-gotten gain. According to the report published by the FATF on money laundering involving legal professionals, key among those factors are the perception that the involvement of legal professionals provides a further step in the chain to frustrate investigation by law enforcement authorities. Thus, it is imperative for DNFBPs to increase their awareness and understanding on how their industry can be susceptible to money laundering and takes necessary measures commensurate with the money laundering and terrorism financing risks faced in offering such business activities. We hope that with higher awareness among the DNFBPs, we will be able to see higher number of submission of suspicious transaction reports from the DNFBPs. As the industry is aware, Bank Negara Malaysia is finalising the revised AML/CFT policies for DNFBPs and we are targeting to issue the policy before end of October. I would like to take this opportunity to thank the various associations and self-regulatory bodies who had provided comments and feedbacks to the draft policy papers that we had issued earlier. Bank Negara Malaysia will continue to support and partner the financial institutions to weather the challenges in fighting emerging trend in financial crimes. For this purpose, I would like to reinforce your attention that Malaysia’s AML/CFT regime will be undergoing the 3rd Mutual Evaluation Exercise commencing August 2014.

Key in managing the risks is to identify the sources and assess the extent of its impact to the business. Recognising this importance, The Financial Action Task Force or better known as FATF, has provided a clear statement on this under the very first recommendation in its Revised International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation. Countries, financial institutions and designated non-financial businesses and professions are required to clearly identify, assess,  BIS central bankers’ speeches  1  and understand risks. Understanding of those risks will then set the context for taking actions and allow better allocation of resources to effectively manage and mitigate those risks. To respond to this development, Bank Negara Malaysia has issued revised policies on Anti Money Laundering and Counter Financing of Terrorism (AML/CFT) in September 2013. The integral component of the revised AML/CFT policies is the introduction of an obligation for reporting institutions to adopt a risk-based approach in identifying, assessing, and understanding the money laundering and terrorism financing risks of respective reporting institutions. The risk-based approach is an over-arching requirement that runs through all the other elements in the AML/CFT policies. Proper assessment and understanding of the risks will allow reporting institutions to tailor an appropriate risk controls and establish proper policies and procedures to mitigate the risks. The revised policies also focused on refining Customer Due Diligence (CDD) requirements to reflect the varied risk levels.