Bank’s AML Responsibilities in Malaysia: Reporting Obligations and Potential Criminal Offences

Assessment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
A. The Bank’s AML responsibilities under the law and guidelines in Malaysia:.......................3
Bank’s Reporting Obligations:....................................................................................................3
Potential Criminal Offences Involved In The Scenario:..............................................................5
B. Action of Bank:.......................................................................................................................6
Evaluating the risks involved: .....................................................................................................6
Reasonable grounds to suspect money laundering:.....................................................................6
Risk of tipping off:.......................................................................................................................7
Assets of ZYX and individual accounts should be frozen and accounts closed:.........................7
Liaison with the authorities:.........................................................................................................8
The relationship between compliance team and the bank’s business division:...........................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
In present time, the activity of safeguarding and accepting the currency owned by the
people and the business entity is known as banking. There are number of useful activities related
with banking services such as lending of money to generate profit, issuance of credit and debit
card, delivering safe and security of valuable items, 24 hrs ATM services, funds transfer all over
the worlds (Bin Zul Kepli and Zulhuda, 2019). AML is compliance team which monitors internal
policies of banks or financial institution as to ensure the compliances with relevant law and
regulation.
In this report, Bank’s AML responsibilities under the law and guidelines in Malaysia is
discussed in the context of Bank’s reporting obligations and potential criminal offences involved
in the scenario. In addition the action of bank in respect of evaluating the risks involved in the
scenario, reasonable grounds to suspect money, risk of tipping off, individual accounts should be
frozen and accounts closed, Liaison with the authorities and relationship between the compliance
team and the bank’s business division.
TASK
A. The Bank’s AML responsibilities under the law and guidelines in Malaysia:
Banking institutions, credit unions, including similar financial corporations are mandated
to appoint an Anti-Money Laundering (AML) Compliance Officer to monitor internal anti-
money laundering policies as well as remain consistent with relevant legislation (Byrnes and
Munro, 2019). Here following is discussion upon major aspects related to responsibilities of
AML and bank obligations, as follows:
Bank’s Reporting Obligations:
Pursuant to Part IV of AMLA, AML / CFT obligations levied on reporting institutions
are given for in AML / CFT policies. These obligations involve requirements, as listed below:
1. Proper implementation of AML/CFT risks management which corresponding with
money laundering levels and act of terrorism financing hazards;
2. Perform customer due-diligences;
3. Maintaining proper and adequate records related to customers and different transactions;
4. Implementation of AML/CFT compliances programmes;
5. Reporting of suspicious transactions report or STR and

6. Reporting of cash threshold-report (CTR) with respect to cash/monetary transactions
above RM 50,000 or any other specified amounts.
These are main reporting obligations for banks under AML responsibilities but there are also
some thresholds and requirements are specified with respect to such reporting obligations, as
discussed below:
 Cash Threshold report (CTR): CTR relates to money/cash transactions above RM50,000
(or other recommended level) including physical currencies (regional or international
currencies) as well as negotiable/legally-enforceable instruments like travellers' checks
but not includes bank-drafts, balances, digital transfers or fixed deposit deposits or
renewals. These involve all transactions related to withdrawing of cash/money from
bank accounts or exchanges of any bearer negotiable-instrument for withdrawing cash.
Requirements for this report are applicable for single/multiple cash-transactions occurred
within same amount prescribed in single day. In case there are deposits and withdrawals
then amount should be aggregative (Choo, 2015).
◦ On 30/10/2018 at 10th Global Conference session on topic of Financial Crimes &
Terrorism Financing operations, Governor announced that CTR requirements will be
decreased from RM 50000 and above (In single day) to RM25,000 and above( In
single day) effective from 01/01/2019.
 The preventative measures involve risks assessment, customer due diligence framework,
submissiveness of suspicious transaction report (STR) and cash threshold report (CTR),
effective maintenance and preservation of transaction data, and execution of the AML /
CFT conformance program which captures money laundering and terrorist funding risk
level of reporting institutions.
 Reporting institutions like bank and other financial institutions have been mandated to
sustain an up to date directory of all individuals and all entities mentioned in relevant
UNSCR roster as well as the instructions opened to the public by Home Affairs Minister.
Monitoring organizations are required to perform checks for new customer names, and
frequent reviews on current customer identities, and prospective customers, against
names in record-database. In case there's any customer name match occurs, banks are
mandatory to enforce sensible and effective steps to confirm and examine true identity of
their customers. When confirmations have been acquired, bank must instantly: