Monday, January 18, 2021

Malaysia: Central bank to toughen laws on money laundering after 1MDB scandal

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The central bank of Malaysia is finalising revisions to guidelines against money laundering and terrorism financing.

Bank Negara Malaysia will publish a draft and seek feedback on the changes in September, Assistant Governor Adnan Zaylani Mohamad Zahid said in the text of a speech on Thursday.

Starting next year, the regulator is increasing its supervisory and enforcement of anti-money-laundering compliance, with plans to pursue more deterrent action, he said.

“Bank Negara Malaysia has, increasingly over the years, taken more stringent enforcement actions on reporting institutions for non-compliances with Anti-Money Laundering and Counter Financing of Terrorism requirements,” Adnan Zaylani said in the speech at a joint conference with the Malaysian Bar in Kuala Lumpur.

Malaysia has been on a drive to curb corruption following the scandal surrounding state fund 1MDB that led to the ouster of former leader Najib Razak and ensnared Goldman Sachs in its first criminal case.

Najib is facing trial to face dozens of money-laundering and corruption charges linked to his alleged role in 1MDB.

Related: Kleptocracy: 1MDB trial involving Malaysia’s ex-Prime Minister Najib Razak Postponed

Recouping assets believed to be lost through the fund and bringing those responsible to justice were top on the list of Prime Minister Mahathir Mohamad’s campaign promises when he returned to power last May.

In a June interview, BNM Governor Nor Shamsiah Mohd Yunus said the central bank cannot allow another scandal like 1MDB to happen.

“This 1MDB affair has put a spotlight not just on Malaysia but also on banks in a number of other countries,” she said, adding that there are areas of improvement.

“These include controls and governance in the banks as well as the prosecution system in Malaysia that needs to target more on high-risk crimes.”

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