Combating Money Laundering in Malaysia: Current Practice, Challenges and Suggestions (original) (raw)
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The Effectiveness of Anti Money Laundering Regulations of Malaysian Commercial Banks
International Journal of Academic Research in Accounting, Finance and Management Sciences
Money laundering has now been designated as a global crime, requiring the development of global strategies and policies to combat it. As a result, global courts should be established to hear all money-laundering cases and make informed decisions on punishments and penalties. The objective of this research is to assess the effectiveness of anti-money laundering (AML) regulations in Malaysian commercial banks. Customer record-keeping, suspicious transaction reporting, and employee training are three predictors that have been expected to affect money-laundering activities. Simple random sampling was used to pick the respondents from bank employees in the Klang Valley area. A total of 94 (94%) questionnaires were returned, and the data were analysed using descriptive and multiple regression analysis. The results indicating that customer record keeping, suspicious transaction reporting, and employee training have a significant relationship on money laundering prevention. Money laundering activities could be curbed by concentrating on customer record keeping, suspicious transaction reporting, and employee training. The findings show how the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA) has become a vital gap in combating money laundering. Similar research may be performed in other environments with different money laundering laws and regulations.
Combating Money Laundering In The Banking Industry: Malaysian Experience
2013
Money laundering has been described by many as the lifeblood of crime and is a major threat to the economic and social well-being of societies. It has been recognized that the banking system has long been the central element of money laundering. This is in part due to the complexity and confidentiality of the banking system itself. It is generally accepted that effective anti-money laundering (AML) measures adopted by banks will make it tougher for criminals to get their "dirty money" into the financial system. In fact, for law enforcement agencies, banks are considered to be an important source of valuable information for the detection of money laundering. However, from the banks- perspective, the main reason for their existence is to make as much profits as possible. Hence their cultural and commercial interests are totally distinct from that of the law enforcement authorities. Undoubtedly, AML laws create a major dilemma for banks as they produce a significant shift in ...
Combating money laundering in Malaysia
Journal of Money Laundering Control, 2008
PurposeThe aim of this paper is to highlight the importance of countering the dangers posed by money laundering activities and the measures taken to date by the Malaysian authorities in this respect.Design/methodology/approachThe paper achieves this by looking at the current money laundering trends in Malaysia, followed by a detailed account of the initiatives taken by the Malaysian authorities to curb such activities. These proactive initiatives range from the enactment and implementation of the Anti‐Money Laundering (AML) Act 2001, the establishment of the Financial Intelligence Unit of the Central Bank of Malaysia and the Southeast Asia Regional Centre for Counter‐Terrorism which work with international enforcement agencies, to the requirement of suspicious transaction reporting amongst professional accountants and lawyers and more.FindingsMalaysia continues to make a broad and sustained effort to combat money laundering and terrorist financing flows within its borders.Practical ...
Law Enforcement of Money Laundering in Banking
Scientific Research Journal, 2020
This study aims to identify the mechanism of money laundering in banking institutions in Indonesia. This type of research is a legal research of the juridical-sociological approach. The location of the study was conducted at several banks including Bank Niaga, Bank Cental Bank Asia and Bank Indonesia (BI) in Makassar City. Legal materials used to solve problems as formulated in this legal research are sourced from primary, secondary and tertiary legal materials. Data obtained through data collection in the form of interviews and literature study. The data obtained both primary and secondary data, were analyzed qualitatively. The results showed that the mechanism of eradicating money laundering at banking institutions in Indonesia has been regulated by Undang-Undang Nomor 8 Tahun 2010 concerning Prevention and Eradication of Money Laundering. Money laundering regulations are considered effective in anticipating and eradicating money laundering by tracking the flow of funds in banking institutions related to disclosure of crimes seized at the same time also criminalizing anyone who receives a flow of crime. This authority is exercised by the PPATK (Financial Transaction Reports and Analysis Center), which has the task of preventing and combating money laundering.
International Journal of Economics and Management, 2016
Bank Negara Malaysia, as the central agency for the enforcement of the Anti-Money Laundering and Terrorist Financing Act (AMLATFA) 2001, has investigated many cases involving individuals and businesses, which have violated the Act. Although many anti-money laundering initiatives have been carried out by the regulators, the number of investigations and charges has risen over the years and some of the cases have been left unsettled. This study focuses on the examination of cases and chargers under AMLATFA 2001 by Bank Negara Malaysia. The data were collected from the Enforcement Action reports of Bank Negara Malaysia on the investigated cases charged under the AMLATFA. 80 cases were reported in the Bank Negara Malaysia website and were classified into industries, sources of cases, status of the cases, and the amount of money laundered. The findings provide an insight to the money laundering cases investigated by BNM and the seriousness of the money laundering issue in the country.
Journal of Money Laundering Control, 2013
Purpose -The purpose of this paper is to give a better insight to the legal society, practitioners and legislators of the working mechanisms of money laundering activities, as well as the functionalities of the Anti-Money Laundering and Anti-terrorism Financing Act 2003 (AMLATFA) in Malaysia, in curbing money laundering and terrorism funding activities. At the same time, the paper provides an overview on the applicability and practicability of the enforcement mechanisms in Malaysia by exploring legislations from different jurisdictions that are more developed. Design/methodology/approach -The paper achieves this by having a cross-sectional analysis onto the legislation in Malaysia such as AMLATFA and also similar legislations found in countries such as the UK. A complete insight is further gained by having interviews with experts in the judiciary, Bank Negara, as well as the experts from the Attorney General's Chamber in Malaysia regarding their insight into the subject matter. Last but not least, the authors also surveyed into the different points of view from journal articles in Malaysia and globally. Findings -Malaysia has a legal framework for curbing money laundering but the current AMLATFA provisions are considered to have failed to be effectively enforced. A more comprehensive, specific and well elaborated legal framework will have to be laid down in order to create a better platform for the prosecutors to bring a good case against these money launderers. Practical implications -This paper will give a deeper insight to the legal society of the capability of AMLATFA and the lack of it, in curbing money laundering in Malaysia and, at the same time, creating awareness among policy makers of the difficulties faced by the enforcement bureaus in prosecuting these money launderers due to the lacunas in the current law. Originality/value -This paper could be useful source of information for practitioners, academics, policymakers and students and a guide for any possible future amendments to the current insufficiency.
Purpose -Reporting suspicious transactions under anti-money laundering (AML) laws creates a major dilemma for banks. On the one hand, failure to report suspicious transactions is an offence under the laws. On the other hand, if they report the transaction, they may breach their duty of confidentiality to their customer or could be liable for tipping off the suspected customer. More importantly, it can also undermine customers' trust. The purpose of this paper is to look into these issues and analyse them against the background of the Malaysian AML laws. Design/methodology/approach -This paper mainly relies on statutes as its primary sources of information. As such, the relevant Malaysian AML that affect the reporting obligations will be identified and analyzed. It will be necessary to examine not just the provisions of the Malaysian Anti-Money Laundering and Anti-Terrorism Financing Act, but also its regulations and guidelines which affect banks in detail, as this is the most important legislation for the purpose of this paper. Findings -It is apparent that the reporting suspicious transactions regime has had a significant impact on the operations of banks in Malaysia. While the regime is based on sound principles, the effectiveness of the regime is still unknown. As such, only time will tell whether the banks will be able to cope sufficiently with the increased AML obligations. Obviously, it is critical at this stage, to establish effective coordination between legislators, regulators and the banking industry, in order to minimize problems faced by the banks and thereby to ensure effective implementation of the regime. Originality/value -This paper provides an examination of the impact of the reporting suspicious transactions regime on Malaysian banks. It is hoped that the study would provide some insight into this particular area for academics, banks, their legal advisers, practitioners and policy makers, not only in Malaysia but also elsewhere. In view of the international nature of money laundering and banking, there will be significant interest in how the AML laws affect banks operating in Malaysia.
Journal of Money Laundering Control, 2021
Purpose The efficient and strong financial system is considered as the backbone of the economy to function properly along with to attract international capital flow, investment and employment. But, on the other hand, weakness in the financial system will create negative impacts on the economy by sabotaging society’s trust in the financial system. In Pakistan, the key component of the financial sector is the banking sector including conventional and Islamic banking. Pakistan is among the pioneer of the Islamic banking sector, its share of 15.6% deposits in the total banking sector. This paper aims to analyze the effectiveness of anti-money laundering (AML) legislation in the Islamic banking sector of Pakistan. Design/methodology/approach The study is doctrinal legal research. The semi-structured interview approach for analysis have been adopted to analyze the materials used in the study to attain the objective. The survey approach was used in critically analyzing the effectiveness of...
The Role of Regulatory Technology & Bankers to Prevent Money Laundering in Bank
JBMP: Jurnal Bisnis, Manajemen dan Perbankan, 2023
As financial institutions, banks are commonly used as a place for money laundering activity, and most financial institution sends suspicious transaction reports to the Indonesian Financial Transaction Reports and Analysis Center (PPATK). This research aims to examine the impact of implementing regulatory technology (regtech) and the role of Anti Money Laundering (AML) officers in money laundering prevention in a bank. This research used explanatory research to test hypotheses; the primary data for this study was collected through a questionnaire distributed to 689 Anti Money Laundering (AML) officers in Indonesia; 296 respondents filled out the questionnaire with a response rate of 42.9%. The multivariate analysis results show that electronic know-your-customer (KYC) is not significant in money laundering prevention. Transactions monitoring and cost & time has a positive & significant impact on money laundering prevention. Furthermore, there is a positive & significant effect between bankers' competency & awareness of money laundering prevention. Regulatory Technology and bankers have an important role in preventing money laundering. Research related to technology & bankers on money laundering prevention is still limited in Indonesia. This study contributes to the current literature on anti-money laundering and the advancement of anti-money laundering systems.
2015
Money laundering has been described by many as the lifeblood of crime and is a major threat to the economic and social well-being of societies. Malaysia passed the Anti-Money Laundering and Anti-Terrorism Financing Act (AMLATFA) in 2001. AMLATFA not only criminalizes money laundering, but also emphasizes on good corporate governance and senior management accountability.Banks as the main reporting entities have borne the brunt of the measures introduced by the law.This paper will highlight the importance of corporate governance in anti-money laundering measures.As such, the discussion will focus on the roles and responsibilities of the board of directors and senior management to put in place relevant antimoney laundering (AML) measures as prescribed by AMLATFA.Undoubtedly, effective AML measures significantly impact on the efficiency of a bank’s corporate governance which is considered a key element in ensuring that the bank is operated in a safe and sound manner.More importantly, an...