Governance, Risk, and Compliance Handbook: Technology, Finance, Environmental, and International Guidance and Best Practices

CHAPTER 71

THE KEY TO MALAYSIAN FINANCIAL INSTITUTIONS COMPLIANCE AND ECONOMIC CRIME REQUIREMENTS

Tommy Seah, CFE

71.1 BACKGROUND

71.2 CUSTOMER DUE DILIGENCE FOR INDIVIDUAL CUSTOMERS

71.3 CORPORATE CUSTOMERS

71.4 CLUBS, SOCIETIES, AND CHARITIES

71.5 LEGAL ARRANGEMENT

71.6 BENEFICIAL OWNERSHIP AND CONTROL

71.7 RELIANCE ON INTERMEDIARIES FOR CDD

71.8 NON-FACE-TO-FACE CUSTOMERS

71.9 POLITICALLY EXPOSED PERSON

71.10 HIGHER-RISK CUSTOMERS

71.11 EXISTING CUSTOMERS

71.12 RECORD KEEPING

71.13 COMBATING TERRORISM

71.1 BACKGROUND

On June 27, 2006, at 2:30 PM, the supervision and regulation departments of the central bank of Malaysia, Bank Negara Malaysia (BNM), called for a meeting for all compliance officers from the Composite, Life Business, and Takaful Operators and working group members.

The purpose of the meeting was twofold:

1. To discuss the salient features of the draft Standard Guidelines on Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT)
2. To discuss the salient features of the draft AML/CFT Sectoral Guidelines

The presentation of Standard Guidelines on Anti-Money Laundering and Counter Financing of Terrorism was conducted by the Financial Intelligence Unit, Bank Negara Malaysia.

The meeting's agenda was:

1. Introduction
2. Applicability
3. Customer acceptance policy
4. Customer due diligence (CDD)
5. Record keeping
6. Ongoing monitoring
7. Reporting mechanism
8. Counter financing of terrorism
9. Penalty for noncompliance

BNM introduced the Guidelines and reiterated that they were issued ...