The Anti-Money Laundering, Anti-Terrorism Financing and Process of Unlawful Activities Act 2001 “AMLA” imposes reporting obligations on reporting institutions as a counter-measure to prevent or mitigate money laundering and terrorism financing “ML/TF” was enacted with the intention to fulfil the international standards imposed by the Financial Action Task Force “FATF”. The main question for AMLA compliance is to assess whether are you a reporting institution.
Qualification of a Reporting Institution
Under AMLA, a reporting institution is any person, including branches and subsidiaries of that person, who carries on any activity listed in the First Schedule.
The following are a summary listing of the common reporting institutions:
If you fall into the above categories, you are considered as a reporting institution which will need to comply with the Act’s requirements which includes conducting customer due diligence “CDD”.
Customer Due Diligence “CDD”
All reporting institution are to conduct Customer Due Diligence “CDD”, which is a process of identifying and verifying the identity of the reporting institution’s customer. The following are items to be included in your CDD process:
Identification of the customer
Beneficial owners
The identity of the person making the transaction on behalf of a person
Representative appointed by a legal person that conducts the transaction
Purpose of the transaction
Question: Who is a beneficial owner “BO”? Answer: Beneficial owner is an individual or natural person who ultimately owns or control an entity. |
Purpose of CDD
CDD is important as it helps to:
Confirm the identity of the customers through a screening process
Enable risk profiling of customers
Prevent abuse by criminals
Assist law enforcement agencies in undertaking an investigation, especially on persons-of -interest or anyone related to them
For further details on AMLA, it is recommended to refer to the Frequently Asked Questions in the website for guidance.
Source: AML/CFT Bank Negara
Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001
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