Malaysia Malaysia

New Documents

Bank Negara Malaysia published its annual report for 2023, highlighting that combatting online fraud continues to be a top priority for the agency.

Bank Negara Malaysia published revised policy documents on anti-money laundering, counterterrorist financing, countering proliferation financing, and implementing targeted financial sanctions that implement recent updates to international standards set by the Financial Action Task Force.

Enforcement Actions

Bank Negara Malaysia imposed a monetary penalty on the Kuala Lumpur-headquartered financial institution for contravening the Money Services Business Act 2011.

Bank Negara Malaysia fined MPI Generali Insurans Berhad RM260,000 for violating the Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions policy document.


Important Facts

  • The U.S. State Department identifies Malaysia as a major money laundering country. The jurisdiction is vulnerable to domestic and transnational criminal activity due to its porous borders and visa-free entry policy for nationals from over 160 countries. Although Malaysia maintains a largely up-to-date AML regime with effective monitoring and enforcement capabilities, the country nevertheless faces risks of fraud, corruption, smuggling, tax crimes, and terrorist financing. Malaysia is also used as a transit country to move drugs globally. Drug trafficking by Chinese, Iranian, and Nigerian organizations is a significant source of illegal proceeds. Malaysia is a source, destination and transit country for wildlife trafficking, with some contraband (like ivory) used as currency by the trafficking networks. Money laundering methods that are also used for terrorist financing include cash couriers, funds skimmed from charities, gold and gem smuggling, front companies and businesses. Illicit proceeds also are primarily generated by fraud, criminal breach of trust, illegal gaming, credit card fraud, counterfeiting, robbery, forgery, human trafficking, and extortion. The jurisdiction’s large cash and informal economies and unauthorized money services businesses pose significant vulnerabilities. In 2020, the country's former prime minister was found guilty on three counts of money laundering in connection to the 1MDB prosecution and was sentenced to 12 years' imprisonment.
Source: 2021 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i | 2013 Methodology

Technical Effectiveness
Compliant : 20 High : 0
Largely Compliant : 18 Substantial : 4
Partially Compliant : 2 Moderate : 7
Non-Compliant : 0 Low : 0

Malaysia's technical compliance was re-rated in a Oct. 31, 2018 follow-up report

BASEL i

Rank : 72/152
Score : 5.21/10

TRANSPARENCY INTERNATIONAL i

Rank : 57/180
Score : 50/100

Tax Justice Network i

Rank : 39/141
Score : 66/100