Circular No 072/2017
Dated 6 Apr 2017

To Members of the Malaysian Bar

Public Statement by Financial Action Task Force on Money Laundering on 24 Feb 2017

The Financial Action Task Force (“FATF”) issued a public statement on 24 Feb 2017 on jurisdictions that have strategic deficiencies in their anti-money laundering and counter financing of terrorism (“AML/CFT”) regime.

Bank Negara Malaysia (“BNM”) issued a notice on 8 Mar 2017 to inform reporting institutions (“RIs”) of FATF’s public statement.

According to BNM’s notice, FATF has urged its members and other jurisdictions to apply “effective countermeasures and targetted financial sanctions” against the Democratic People’s Republic of Korea (“DPRK”) “arising from on-going and substantial money laundering and terrorist financing risks emanating from and threats posed by DPRK’s illicit activities in relation to proliferation of weapons of mass destruction and its financing”.

BNM’s notice also states the following:

(1) RIs are “required to conduct enhanced customer due diligence for business relationships and transactions with any person from DPRK including those acting on their behalf”.  In addition, RIs are also required to apply “relevant countermeasures proportionate to the risk, including limiting business relationship and financial transactions with DPRK or its person and terminating correspondent relationships with DPRK banks, where necessary”;

(2) “The FATF continues the suspension on the call for countermeasures on Iran until June 2017, following its commitment to an agreed Action Plan.  As such, countermeasures as stipulated under respective AML/CFT Policy Documents will no longer be applicable.  However, enhanced due diligence measures which are proportionate to the risk remain applicable to all business relationships and transactions with any person from Iran”; and

(3) “RIs should also consider other jurisdictions which are being monitored by FATF as having inadequate AML/CFT system for which they have developed an action plan with FATF as part of the RIs’ risk assessment process (see Appendix II)”.

The relevant portion of the BNM notice is reproduced below, while a copy of it, including the public statement by FATF (Appendix I) and Appendix II, is attached for your reference, and is also available here.

Should you have any enquiries relating to the notice from BNM, please contact Amarjit Kaur Paridam Singh, Officer, BNM, by telephone at 03-2698 8044 (ext 8836) or by email at amarjit@bnm.gov.my. 

If you would like to contact the Bar Council Secretariat on matters relating to the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AMLA”), kindly contact Marianna Laureen Tan, Executive Officer, by telephone at 03-2050 2086, or by email at ml.tan@malaysianbar.org.my. 

Thank you.

Roger Chan Weng Keng
Secretary
Malaysian Bar

_____________________________________________________________________________________________________________________

Date: 8 March 2017

To:
All reporting institutions under the 
Anti-Money Laundering, Anti-Terrorism Financing 
and Proceeds of Unlawful Activities Act 2001 (AMLA)

Recent Statements by the Financial Action Task Force on Money Laundering (FATF)

            The purpose of this notice, issued pursuant to section 83 of the AMLA, is to inform the reporting institutions (RIs) of the recent Public Statement issued by the FATF on 24 February 2017 on jurisdictions having strategic deficiencies in their anti-money laundering and counter financing for terrorism (AML/CFT) regime (please see Appendix I).

2.         In the statement, FATF has called upon its members and other jurisdictions to apply effective countermeasures and targetted financial sanctions in accordance with applicable United Nations Security Council Resolutions against the Democratic People’s Republic of Korea (DPRK) arising from on-going and substantial money laundering and terrorist financing risks emanating from and threats posed by DPRK’s illicit activities in relation to proliferation of weapons of mass destruction and its financing.

3.         In accordance with the AML/CFT Policy Documents issued to your sector, please be advised that RIs are required to conduct enhanced customer due diligence for business relationships and transactions with any person from DPRK including those acting on their behalf.  In addition to enhanced CDD requirement, the RIs are also required to apply any relevant countermeasures proportionate to the risk, including limiting business relationship and financial transactions with DPRK or its person and terminating correspondent relationships with DPRK banks, where necessary.

4.        The FATF continues the suspension on the call for countermeasures on Iran until June 2017, following its commitment to an agreed Action Plan.  As such, countermeasures as stipulated under respective AML/CFT Policy Documents will no longer be applicable.  However, enhanced due diligence measures which are proportionate to the risk remain applicable to all business relationships and transactions with any person from Iran. 

5.       RIs should also consider other jurisdictions being monitored by FATF as having inadequate AML/CFT system for which they have developed an action plan with FATF as part of the RIs’ risk assessment process (please see Appendix II). 

6.      Further information on the abovementioned statements and other monitored jurisdictions is available at FATF’s website at http://www.fatf-gafi.org.