Notwithstanding this noble goal, Malaysia needs to recognize a key problem area which could potentially impact negatively on the satisfactory achievement of this goal; i.e. the high prevalence of leakages due to fraud. Organizations especially corporations, risk financial loss or suffer a tainted reputation or witness their sustainability adversely affected when the management, employees and external third parties commit fraud.  The scenario becomes worse when measures and controls are absent or inadequate, thus depreciating the organization’s competitiveness or even endangering its position in the market.  Latest trend of fraud involves money laundering offences.  It is a truism that effective AML/CFT systems would be able to assist corporations and other entities in detecting the proceeds of financial crimes and terrorism financing and prevent the perpetrators of such crimes from enjoying the proceeds of their crimes. With the mounting pressure for regulatory compliance, the increasing  incidence of financial crimes and the growing complexity of fraud and money laundering schemes, it is imperative that corporations, NPOs and wakaf organisations should upgrade their systems, streamline their processes and improve efficiencies within their organisations. Adopting an integrated and comprehensive approach to money laundering and its compliance program would not only ensure the return on risk and compliance investments and prevent financial leakages but also would enhance their business reputations in the long run.

Combating money laundering requires concerted efforts from the reporting institutions, enforcement authorities and the regulators. Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATPUA 2001) (the Act) mandated the reporting institutions to submit suspicious transactions reports (STRs) in the event of any suspected money laundering incidences. The Act provides for investigation action to be carried out in case of any corroborated evidence suggesting that the STRs are genuine. STRs, however, need to be diligently screened for validity as reporting institutions may resort to protective filing of STRs in order to evade regulatory liability. Financial institutions, for instance, are subjected to file STRs with Bank Negara Malaysia (BNM) and failure to adhere to the Act would render financial institutions to be liable for a fine of RM1.0 million or imprisonment for a term of not more than one year, or both. This could have resulted in filing of unsubstantiated STRs to avoid the regulatory action. From thousands of STRs filed daily across the financial institutions, it is of utmost important that an informed decision on which STRs should warrant for further investigation is exercised. Hence, provision of the Act need to be carefully understood in ensuring the investigation carried out is not a wasted effort and contribute towards controlling money laundering risk.

 

Anti-Money Laundering Mechanisms and Typologies to Mitigate Financial Leakages in Law Enforcement Agencies

One the most important actions in terms of preventing money laundering, which extremely seems necessary to be taken is assessing the risk of accruing money laundering. A different stage of assessing a particular risk requires different types of studies. For the first stage which is identifying and measuring the risk, some in-depth interviews and investigation on the financial reports are required. Followed by the second stage, some additional data will be gathered through distributing questionnaires among the CEOs and top management level of the companies, in addition to the interviews and secondary data collection method.  All of the interviews will be an audiotaped beside rigorous note-taking during the interviews. As for transcribing the interview data, a qualitative software system (NVIVO) will be used. Meanwhile, secondary data will be analysed using Statistical Package for the Social Sciences (SPSS).

 

 

 

Suspicious Transaction Reporting  Investigation: Enhancing Anti-Money Laundering Compliance Assessment

Combating money laundering requires concerned efforts from the reporting institutions, enforcement authorities and the regulators, Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawfull Activities Act 2001 (‘the Act’) mandated the reporting institutions to submit suspicious transactions reports (STRs) in the event suspected money laundering incidences. The Act provides for the investigation action to be carried out in case of any corroborated evidence suggesting that the STRs are genuine. STR’s however, need to be diligently screened for validity as reporting institutions may resort to protective filing of STRs in order to evade regulatory liability. Financial institution, for instance, are subjected to file STRs with Bank Negara Malaysia (BNM) and the failure to adhere to the Act would render financial institutions to be liable under the Act. Thus could resulted the filling unsubstantiated STRs to avoid the regulatory action. From thousands of STRs filed daily across the financial institution, it is of utmost important that the informed decision on which STRs should warrant for further investigation is exercised. Hence, provision of the Act need to be clearly defined in ensuring the investigation carried out is not a wasted effort, contribute towards controlling money laundering risk and also reduced the potential issues of public interest. The data will be analysed using a qualitative software system (NVIVO).

 

Behavioral Implications on Risk assessment of Anti-Money Laundering and Financial Terrorism

In addressing the research issue, a qualitative study is chosen. A preliminary study will be conducted to address issues, problems and challenges faced by the financial institutions in order to ensure and to sustain an effective anti-money laundering program. The data collection process consists of interviews with respondents on their experiences along with experts’ opinions on the issues of law enforcements. Apart from that, a focus group discussion and interviews with the relevant parties such as the representatives from the law enforcement, the Central Bank of Malaysia, the Financial Intelligence Unit and the Deputy Public Prosecutors. The data will be analysed using a qualitative software system (NVIVO).