Banking and Finance

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Anti-Money Laundering Act 2001 (DP02 – Chapter 1)

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Diploma in Banking and Financial Services
ADDENDUM

LAW ON BANKING AND FINANCE
DP02

IMPORTANT INFORMATION:
Kindly take note that the Anti-Money Laundering Act 2001 (AMLA) will become an examinable topic from the April 2003 examination sitting. Thank You.

© Institut Bank-Bank Malaysia

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Anti-Money Laundering Act 2001 (DP02 – Chapter 1)

© Institut Bank-Bank Malaysia, 2002

All rights reserved. No part of this publication may be reproduced or transmitted, in any material form or by any means, including photocopying and recording, or stored in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication, without the written permission of the copyright holder. Written permission must also be obtained before any part of this publication is stored in a retrieval system of any nature. Application for such permission should be addressed to Institut Bank-Bank Malaysia.

Published by Institut Bank-Bank Malaysia Wisma IBI, 5 Jalan Semantan, Damansara Heights, 50490 Kuala Lumpur, Malaysia Tel: 03-20956833 (Gen.), 03-20938803 (Qualifications/Membership), 03-20958922 (CPD) Fax: 03-20952322 (Gen.), 03-20957822 (CPD) Website: www.ibbm.org.my Email: publish@ibbm.org.my

© Institut Bank-Bank Malaysia

Anti-Money Laundering Act 2001 (DP02 – Chapter 1)

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ANTI-MONEY LAUNDERING ACT 2001
The Anti-Money Laundering Act 2001 (hereinafter referred to as ‘AMLA’) came into force on January 15, 2002 to provide for: • • • • the offence of money laundering; the measures to be taken for the prevention of money laundering; the forfeiture of property derived from, or involved in, money laundering; and the requirements of record-keeping and reporting of suspicious transactions by reporting institutions.

Section 2 provides that the AMLA applies to: • • serious offences, foreign serious offences or unlawful activity whether committed before or after the commencement date. any movable or immovable, tangible or intangible property or interest therein worldwide.

The AMLA defines the word “financial institution” as: • Institutions licensed under: • Islamic Banking Act 1983 Takaful Act 1984 BAFIA 1989 Insurance Act 1996 Money-Changing Act 1998

Persons licensed under: Securities Industry Act 1983 Securities Commission Act 1993 Futures Industry Act 1993



Offshore financial institutions (as in the Labuan Offshore Financial Services Authority Act 1996)

Section 3 of the AMLA defines “reporting institutions” to mean: any person, including its branches and subsidiaries outside Malaysia who carries on any activity listed in the First Schedule: • banking business, finance company business, merchant banking business, discount house business and money-broking business and electronic fund transfer (EFT) as defined in BAFIA, Islamic banking business,



© Institut Bank-Bank Malaysia

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Anti-Money Laundering Act 2001 (DP02 – Chapter 1)

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building credit business, credit token business, development finance business, factoring business and leasing, insurance business, insurance broking business and adjusting business, takaful business, dealing in securities (excluding providing investment advice), money-changing business, futures broking business and futures fund management business, and offshore financial services.

Section 3 of the AMLA also defines “enforcement agency” as including a body or agency that is for the time being responsible in Malaysia for the enforcement of laws relating to the prevention, detection and investigation of any serious offence. Examples of enforcement agencies include the police, customs, Bank Negara Malaysia, Securities Commission, AntiCorruption Agency, LOFSA and the Registrar of Companies.

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Supervisory and Regulatory Framework
The AMLA empowers the Minister of Finance to appoint a Competent Authority which is empowered to act in accordance...
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