Anti Money laundering and Risk Based Methodologies by Mr ...

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Workshop On “Anti-Money Laundering Risk Based Methodologies”

©AICB/Vijayaraj R Kanniah/Visioon Business Solutions Sdn Bhd

ByVIJAYARAJ R KANNIAH MIBM, ACISAdvocate & Solicitor LLM (Malaya), LLB (Hons) London

CLP (Malaya), ICSA (MAICSA)CCP (IBBM), CCP-i (IBFIM), AML/CFT (ICA) B.Soc Science [Econs] (Hons) USMInt. Diploma [AML/CFT] (Manchester)©The materials used are solely for Asian Institute Of Chartered Bankers conference program. The materials arestrictly prohibited from reproduction, circulation or any type of distribution / discussions other than for AsianInstitute Of Chartered Bankers training purposes.

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SCOPE OF WORKSHOP

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MALAYSIAN REGULATIONS ON AML/CFT

* Anti-Money Laundering & Anti-Terrorism Financing (Declaration of Specified Entities& Reporting Requirements) Order 2014

• 15 January 2002Anti-Money Laundering Act 2001

• Amended in 2003Anti-Money Laundering & Anti Terrorism Financing Act 2001

• Amended in 2007Anti-Money Laundering & Anti-Terrorism Financing Act 2001 And Regulations

• Amended in 2014Anti-Money Laundering, Anti-Terrorism Financing And Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA 2001)

PARLIAMENT –AML/CFT GUIDELINE

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GP9 : Know Your Customer Policy

• Amended in Nov 2006 & Feb 2009

UPW/GP1: Standard Guideline On Anti-Money Laundering & Counter Financing of Terrorism

• Amended in 15 September 2013

Anti-Money Laundering & Counter Financing of Terrorism AML/CFT – Banking & Deposit Taking Institutions (Sector 1)

BANK NEGARA MALAYSIA – AML/CFT GUIDELINE

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2007 (OLD) 2013 (NEW)a) Standard Guidelines on Anti-MoneyLaundering & Counter Financing ofTerrorism (AML/CFT).

a) Guidelines on Anti-Money Laundering &Counter Financing of Terrorism (AML/CFT) –Banking Sector.b) Anti-Money Laundering & CounterFinancing of Terrorism (AML/CFT) SectoralGuidelines 1 For Offshore FinancialInstitutions Licensed & Registeres UnderOffshore Banking Act 1990.

b) Guidelines on Anti-Money Laundering &Counter Financing Terrorism (AML/CFT) –Insurance & Takaful Sectors.

c) ) Anti-Money Laundering & CounterFinancing of Terrorism (AML/CFT) SectoralGuidelines 2 For Offshore Insurance &Insurance-Related Companies.

c) Guidelines on Anti-Money Laundering &Counter Financing of Terrorism (AML/CFT) –Trust Company Sector.

d) Anti-Money Laundering & CounterFinancing of Terrorism (AML/CFT) SectoralGuidelines 3 For Capital Markets Industries.d) Guidelines on Anti-Money Laundering &Counter Financing Terrorism (AML/CFT) –Capital Market & Other Business Sectors.

LFSA –AML/CFT GUIDELINE

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INTERNATIONAL REGULATIONS ON AML/CFT

FINANCIAL ACTION TASK FORCE (FATF) ASIA PACIFIC GROUP (APG)

• 40 + 9 Recommendations and SpecialRecommendations (SR) [Issued in 1990& revised in 2001 & 2003]• FATF new structure of 40Recommendations (9 SR on terroristfinancing merged into revised 40general recommendations) [LatestIssuance in 2012].• Membership by invitation only(Malaysia is member since 19 February2016)

• Regional body adopting FATF policies• Malaysia member since 2000•Conduct Mutual Evaluation (ME) onmembers• M’sian ME – 2001 & 2007•Recent ME – 2014 (outcome?)

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FATF & APG

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• Implementation on Risk Based Approach (RBA)• Number of STRs Submission• Obligations related to countering terrorism financing (TF) & proliferation financing (PF)• Obligation to ascertain ownership (BO) information

Areas of Improvement Identified :-

APG MUTUAL EVALUATION REPORT –SEPTEMBER 2015

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1. RULED BASED TO ‘RISK BASED’ 2. FINE TO ‘FINE & SHAME’

MAJOR CHANGE IN AML/CFT APPROACH

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AML/CFT BNM FINEOffence Ref. Offence Description No. of offence(s) AmountMain Section

14 & 86 Report by reporting institutionsDelay (>30 days) in submitting CTR (14a) 68 340,000Failure to submit CTR (14a) 3 30,000Failure to submit STR (14b) 12 120,000

16 & 86 Customer Due Diligence Failure to conduct ECDD on high risk 1 10,000Failure to verify license of purportedmoney changer 1 10,000No CDD for cash transaction RM 50k &ABOVE 79 790,000

19 & 86 Compliance Programme Failure to conduct transactionmonitoring for customers from high riskcountry highlighted by FATF93 930,000

Insufficient ongoing CDD 1 10,000Insufficient ongoing CDD resulting innon submission of STR 5 50,000Total 263 2,290,000

Source : BNM

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AML/CFT BNM FINEMain Section Offence Description No. of offence(s) Amount

19 (1) & 48(1) & 86 Compliance Programme &Investigation powers in relation to a financial institution

Failure to implement internal programmes,policies, procedures and controls to guardagainst and detect any offence underAMLATFPUAA

3 285,000

Failure to adopt, develop implement internalprogrammes, policies, procedures andcontrols to guard against and detect anyoffence under AMLATFPUAA

1 77,500

Failure to adopt, develop & implementinternal programmes, policies, procedures &controls to guard against and detect anyoffence under AMLATFPUAA and Failure tocomply with standards specified by BNM

2 3,900,000

35 & 88(a) Tipping-off & Offence by an individualTipped-of customer whose name was in orderissued under s48 1 500,000

Source : BNM

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AML/CFT BNM FINEMain Section Offence Description No. of offence(s) Amount

44 & 86 Freezing of property Release funds from frozen account 1 125,00050(3) Seizure of moveable property in financial institution

Breach of seizure order 3 1,090,000

Total 11 5,977,500

Source : BNM

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“A process of convertingcash/property which isderived from criminalactivities to give it theappearance of havingbeen obtained from alegitimate source”.

PREDICATEOFFENCESList of 358

predicate offencesfrom 42 pieces of legislation

WHAT IS MONEY LAUNDERING? AMLATFPUAA 2001 SECOND SCHEDULE

Who assist criminals in money laundering and what are theirrole in laundering the proceeds? To mitigate this assistance –S4A AMLATFPUAA 2001

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AMLATFPUAA 2001 Anti-Trafficking In Persons & Anti-

Smuggling of Migrants Act 2007 Betting Act 1953 Capital Market & Services Act 2007 Child Act 2001 Common Gaming Houses Act 1953 Companies Act 1965 Control of Supplies Act 1961 Control of Supplies Regulations 1974 Copyright Act 1987 Corrosive & Explosive Substances &

Offensive Weapons Act 1958

Customs Act 1967 Dangerous Drugs Act 1952 Dangerous Drugs (Forfeiture of Property)

Act 1988 Development Financial Institutions Act

2002 Direct Sales & Anti-Pyramid Scheme Act

1993 Excise Act 1976 Explosives Act 1957 Financial Services Act 2013 Firearms (Increased Penalties) Act 1971 Income Tax Act 1967 International Trade In Endangered Species

Act 2008

AMLATFPUAA SECOND SCHEDULEList of 358 predicate offences from 42 pieces of legislation

Islamic Financial Services Act 2013 Kidnapping Act 1961 Kootu Funds (Prohibition) Act 1971 Labuan Financial Services & Securities

Act 2010 Labuan Islamic Financial Services &

Securities Act 2010 Malaysian Anti-Corruption

Commission Act 2009 Malaysian Palm Oil Board Act 1998 Malaysian Palm Oil Board (Licensing)

Regulations 2005 Malaysian Timber Industry Board

(Incorporation) Act 1973

Moneylenders Act 1951 Money Services Business Act 2011 Optical Discs Act 2000 Pawnbrokers Act 1972 Penal Code Sales Tax Act 1972 Service Tax Act 1975 Strategic Trade Act 2010 Strategic Trade (United Security Council

Resolutions) Regulations 2010 Trade Descriptions Act 2011 Wildlife Conservation Act 2010

AMLATFPUAA SECOND SCHEDULEList of 358 predicate offences from 42 pieces of legislation

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EXERCISE 1

“Process of financingterrorist activity(ies)either through legitimateor illegitimate source.”18

WHAT IS FINANCING OF TERRORISM? PENAL CODE [AMLATFPUAA 2ndSCHEDULE]

Close to 24predicate offencerelated to terrorismfinancing

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• Section 125 Waging war against any power in alliance with theYang di-Pertuan Agong• Section 125A Harbouring or attempting to harbour any person inMalaysia or person residing in a foreign State atwar or in hostility against the Yang di-PertuanAgong• Section 121 Waging or attempting to wage war or abetting thewaging of war against the Yang di-Pertuan Agong,a Ruler orYang di-Pertua Negeri• Section121A Offences against the person of the Yang diPertuanAgong, Ruler or Yang di-Pertua Negeri

PENAL CODE [AMLATFPUAA 2nd SCHEDULE]

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• Section 121B Offences against the authority of the Yang di-Pertuan Agong, Ruler or Yang di-Pertua Negeri• Section 121C Abetting offences under section 121A or 121B• Section 120B Punishment of criminal conspiracy• Section130C Committing terrorist acts• Section 130D Providing devices to terrorist groups• Section 130E Recruiting persons to be members of terroristgroups or to participate in terrorist acts• Section 130F Providing training and instruction to terroristgroups and persons committing terrorist acts• Section 130G Inciting, promoting or soliciting property for thecommission of terrorist acts


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• Section 130H Providing facilities in support of terrorist acts• Section 130I Directing activities of terrorist groups• Section 130J Soliciting or giving support to terrorist groups orfor the commission of terrorist acts• Section130K Harbouring persons committing terrorist acts• Section 130L Criminal conspiracy• Section 130M Intentional omission to give information relatingto terrorist acts• Section 130N Providing or collecting property for terrorist acts• Section 130O Providing services for terrorist purposes• Section 130P Arranging for retention or control of terroristproperty


o List Screening from three main database:-

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TERRORISM DETECTION METHOD

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TO CATCH A “CROOK”YOU MUST THINK LIKE A CROOK

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CHANGING PATTERN / MODUS OPERANDI IN MONEY LAUNDERING BUSINESSOLD METHOD

1.Laundry 2.Hotel3.Restaurant / Pub4.Furniture Shop5.Cash Based Business

NEW METHOD1.Internet Biz / Games2.Real Estate3.Int. Trade4.Sports5.Movie / Concert / Paintings

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OLD METHOD1.Legitimate Funding2.Illegal Activities[HAWALA]

NEW METHOD1.On-line University2.Cyber Terrorism3.Donation4.Prepaid Card5.Economic Terrorism

CHANGING PATTERN / MODUS OPERANDI IN TERRORISM FINANCING

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KNOW YOUR CUSTOMER [FI]KNOW YOUR FI [CRIMINAL]

CRIMINALS ARE LIKE FINANCIAL INSITUTIONS (FI)

Risk vs Reward

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PREDICATE OFFENCES

Customer Assessment, Risk Profiling & MitigationCustomer Due Diligence / Enhanced CDDRBA not completed, can we reject customer?

FINANCIAL PRODUCT

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MONEY LAUNDERING RISK?Risk Based Approach

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INTERNATIONAL

DRUG LISTED COUNTRIES

BASEL INDEX SCORE & RANKING FOR ML/TFHUMAN TRAFFICKING COUNTRIES

CORRUPTION COUNTRIES

ARE WE FAMILIAR WITH HIGH RISK AREAS ?

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*Measures risk of money laundering & terrorist financing based on publicly available sources in 2015

NO COUNTRY SCORE1. Iran 8.592. Afghanistan 8.483. Tajikistan 8.264. Guinea-Bissau 8.155. Mali 7.976. Cambodia 7.937. Mozambique 7.908. Uganda 7.869. Swaziland 7.85

10. Myanmar 7.78

BASEL INDEX SCORE & RANKINGS

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o Customer Know To Us - Really ?o Verifying Document Without Sighting Original – NotaryPublic Risk ?o Existence of Business – Site Visit Done ?o Financials Details Obtained – PDPA issue ?o Source of funds verified ?o Approval level complied – Senior Management ?

CONCERN FOR OFFSHORE FINANCIAL INSTITUTIONS (FI)

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o Is customer background information sufficient to do riskassessment & profiling?o Is there is a ‘system’ for profiling?o Are the profiling being reviewed / on-going monitoringdone ?o Are the correct ‘questions’ being asked during KYCprocess ? [KYCc completed]o Quality vs Quantity STR reporting?

CONCERN FOR OFFSHORE FINANCIAL INSTITUTIONS (FI)

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IMPLICATION

REPUTATION & FINANCIAL LOSSES

REVOCATION / SUSPENSION OF LICENSE

FREEZING & FORFEITURE OF ASSETS

MANAGEMENT / EMPLOYEE IMPRISONMENT

WHAT ARE THE IMPLICATIONS OF NON COMPLIANCE ON FINANCIAL INSTITUTIONS

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French bank BNP Paribaspleaded guilty to criminalcharges for breaching U.S.sanctions and will pay a recordpenalty of almost USD9 billion. The settlement concludes along-running criminalinvestigation into allegationsthat BNP Paribas violated U.S.money laundering laws byhelping clients dodgesanctions on Iran, Sudan andother countries.

BNP PARIBASJP MORGAN

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HSBC has been ordered to pay arecord 40m Swiss francs (£28m)and been given a final warning bythe Geneva authorities for“organisational deficiencies”which allowed money launderingto take place in the Bank’s Swisssubsidiary.

HSBCThe Guardian, Thursday, 4 June 2015

On 12th August 2016, PhilippineCentral Bank slapped P1b(US$21.3m) supervisoryenforcement action on RizalCommercial Banking Corporation(RCBC) for not raising enoughquestions when $81m inquestionable funds flowed throughits system to local gaming industry.The $81m was stolen fromBangladeshi Central Bank accounts.

RIZAL COMMERCIAL BANKING CORPORATION (RCBC)

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REVOCATION OF LICENCES EC TRUST LABUAN –LICENCE REVOKED Its director & Trust officer,Peter Kent Searle disqualifiedby LFSA. 400 investor from Australia &New Zealand cheated of USD23million & missing interestincome. Capital One (Fund Mgmt Co)domiciled in Labuan with ECtrust acted as trustee for theinvestment fund.

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Section 50 AMLATFPUAA provides that ‘any personwho fails to comply with a freezing order shall onconviction be liable to a fine not exceeding FIVE timesthe amount which has been parted with’.

Section 51 AMLATFPUAA provides that ‘any person whodoes any act which results in contravention shall onconviction be liable to a fine not exceeding FIVE timesthe value of the property’.

FREEZING OF MOVABLE PROPERTY

SEIZURE OF IMMOVABLE PROPERTY

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Section 22 AMLATFPUAA provides that ‘areporting institution that failed withoutexcuse to comply in whole / in part anyobligations under this Act, the officers /employee shall on conviction be liable to afine not exceeding RM1.0 million and/orimprisonment not exceeding 3 years’.

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POWERS TO ENFORCE COMPLIANCE

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ANTI-MONEY LAUNDERING, ANTI-TERRORISM

FINANCING AND PROCEEDS OF UNLAWFUL ACTIVITIES ACT 2001

[AMLATFPUAA 2001]

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KEY CHANGES

Providing Clarity On Reporting ObligationsStrengthening Measures Relating To Cross-Border Transportation

Strengthening Investigation and Prosecution Powers

Increase In Penalties

KEY CHANGES IN AMLATFPUAA 2001

OPENING ACCOUNT IN FALSE NAME [S18][Penalty : 5yrs / 3m OR both]

COMPLIANCE PROGRAMME [S19][Penalty : 3yrs jail / RM1.0m OR both & RM3k if offence continues]

REPORTING SUSPICIOUS TRANSACTIONS [S14]RECORD KEEPING [S13]

RETENTION OF RECORDS [S17] [Penalty : 5yrs / 3m OR both]

AMLATFPUAA RI OBLIGATIONS

CUSTOMER DUE DILIGENCE [S16] CENTRALISATION OF INFORMATION [S15]

PROHIBITION AGAINST DISCLOSURE OF REPORTS & RELATED INFORMATION [S14A]

REPORTING INSTITUTION OBLIGATION

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1. Account must be maintained in name of account holder ONLY.2. No account to be opened in anonymous, fictitious, false or incorrect name.3. Undertake customer due diligence by reliable means:

• Identity• Representative capacity• Domicile• Legal capacity• Occupation (for individuals)• Business purpose (for non-individuals)

4. Take reasonable measures to obtain & record such particulars when establishing biz r/ship / conducting any transaction.41

S16 AMLATFPUAA – CUSTOMER DUE DILIGENCE (PART OF RBA)

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KEY CHANGES IN AMLATFPUAA 2001S4 AMLATFPUAA 2001 Implication to be increased from 5 years to 15years & fine from RM5million or 5 times amountlaundered depending on which is the higherfigureS4A AMLATFPUAA 2001

Anyone who assist in such act to be fined notmore than 5 times the value of transaction attime of offence or a jail term not exceeding 7years or bothS14AAMLATFPUAA 2001

Forbids disclosure of suspicious in transactionsreports and related information provided toauthorities during investigation, punishable byfine not exceeding RM3million or jail notexceeding 5 years or both

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KEY CHANGES IN AMLATFPUAA 2001S44AAMLATFPUAA2001

An order to freeze property issued under S44 maybe varied / revoked by enforcement agency thatissued the orderPART 4A AMLATFPUAA 2001

Consisting 12 new sections (S28A-S28L) whichprovide for monitoring of cross border movementof cash & negotiable instrument e.g. S28G – noperson shall structure, direct, assist or participatein structuring any cross border transportation /movement of cash / bearer negotiable instrumentto avoid making a declaration.Penalty : 7 years or 5 times amount or both

4444

LFSA AML/CFT POLICY

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WHAT IS RISK BASED APPROACH

Measures to prevent or mitigate money laundering and terrorist financing that commensurate to the risk identified.

Resources should be directed in accordance with priorities so that the greatest risk receive the highest attention.

RISK ASSESSMENT Customers Countries Geographical areas Products Services Transactions/Deliverychannels

Document processes & findings Consider overall risk factors beforedetermining level/type of mitigationapplied Periodic assessment/or as when specifiedby BNM Appropriate mechanism to provide riskassessment info to supervisory authorities RISK MITIGATION

RISK PROFILING

Have the policies, control andprocedures approved byBoard of Directors and SeniorManagement to manage &mitigate risk Monitor implementation ofthose controls and enhancethem if necessary Enhance measures to manageand mitigate higher riskidentifiedRI required to identify & assessrisk of customers duringestablishment of businessrelation i.e. risk profilingMeasures implemented by RIshall commensurate with riskprofile of particular customer

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RISK BASED APPROACH

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1. Country of origin (HT, C, DT, UN / OFAC List)

2. Company incorporated (Outside / Inside Malaysia)

3. Company business (cash based?) & source of funds

4. Directors / shareholders details (any beneficial owner?)

5. Individual acct (type of business / occupation & source of income)

RBA CHECKLIST SHOULD INCLUDE :-

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6. All relevant documentrequired before ‘on-boarding’ new client

7. Letter of confirmation /information from LabuanFinancial ServiceAuthority (for LabuanIncorporated Companies)

8. Documents to beduly certified bycompany secretary(inside Malaysia) or byNotary Public /Malaysian Embassy

RBA CHECKLIST SHOULD INCLUDE :-

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RISK ASSESSMENT

1. Customer Due Diligence

● Identify & verify customer (identify/sight documents)● Identify & verify legal arrangement, beneficial ownership/control of such transaction (take copies of ID document)●How? ▪ Individual

▪Corporate (identify the natural person who is the beneficial owner)2. Enhanced Customer Due Diligence [Higher Risked Customers]

●More detailed info i.e. purpose & source of funds●Approval from senior management

4949

RISK BASED APPROACH

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IDENTIFY AND VERIFY BENEFICIAL OWNERa) Name, legal from and proof of existenceb) Powers that regulate and bind customersc) Address of registered office

Identification / verification of thebeneficial owners up to the level ofnatural persons who are controllingentities

Identify and take reasonable measures to verifybeneficial ownerIdentify of the natural person who has ultimately hascontrolling interest in the legal person. At minimum,this includes:i.Identification of directors / shareholders with equityinterest of 25% or more;ii.NRIC / Passport to identify the authorised person.

If there is a doubt on the controlling interest – theidentity of the natural person exercising controlthrough other means.

Where there is no natural person identified – theidentity of the natural person who holds the seniormanagement position.

IDENTIFYING BENEFICIAL OWNER

If in doubt, document allmeasures taken and proceedto the following:

If there is no natural person identified in(a) or (b), document all measures takenand proceed to the following:

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4 IMPORTANT STEPS IN RISK BASED APPROACH

i) Identify The Risk Factors ii) Quantify Risk Factorsiv) Manage & Monitor In Risk Based Manner

iii) Risk Grade Relationship

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EXERCISE 2

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1. Companies incorporated overseas – howfamiliar are you with those documents

2. The need to verify ‘Notary Public’ existencein foreign country

3. Availability of Malaysian embassy to certifydocuments4. Invoices provided by foreign incorporatedcompanies can be fabricated (cost too high toget all certified)

CHALLENGES FACED BY LABUAN FI

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5. Investment holding company – wide rangeof activity & unable to verify actual business

6. Trading companies – business notcommenced but insist to open account7. Over depend on confirmation given by TrustCompany / Overseas agent that CDD iscompleted

8. Transaction volume too big to monitor –unable to verify documents

CHALLENGES FACED BY LABUAN FI

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WHAT IS PEP?Question : Are any of these people PEPs?

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POLITICALLY EXPOSED PERSON (PEPs)o Foreign / Domestic PEPs are individuals entrusted withprominent public function i.e. Head of State / Govt, SeniorPolitician, Senior Government, Judiciary / Military Officials,Senior Executives of State owned corporation andimportant political party officials incl. family members &associate.o Person entrusted with a prominent function by aninternational organisation.

PEPS DEFINITION IN LFSA AML/CFT POLICY

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POLITICALLY EXPOSED PERSON (PEPs)o RI required to:-

a) Put in place measure to determine customer / beneficialowner is PEPb) Adopt following measures :-

i. Obtain SM approval before establishing bizrelationshipii. Reasonable measure to establish source of wealth /fundsiii.Conduct enhance CDD and on-going monitoring onPEPs

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LFSA AML/CFT POLICY

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PRACTICAL CHALLENGES IN DEFINING “PEP”o PEP defined differently across RI according to its ownsassessmento No out-off level of political party functions (National vsState)o Inclusion of Royalties?o No single reference point of informationo Over reliance on 3rd party vendor’s database

LFSA AML/CFT POLICY

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PRACTICAL CHALLENGES IN DEFINING “PEP”o Cost involve to get “PEP” declarationo Once a “PEP” always a “PEP”? When do we un-tag?o Is “BO” considered a PEP?o Criminal / Civil record not readily availableo Not enough resources / level of knowledge to detect“PEP”.

LFSA AML/CFT POLICY

ON-GOING MONITORINGo RI required to conduct on-going CDD whichinclude:-a) Scrutiny of transactions undertaken consistent withcustomer business & profileb) Ensuring doc, data or info collected under CDDprocess is kept up to dateo RI to examine & clarify any transactions / businessrelationship that appears unusual, does not makeeconomic purpose or legality not clear

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LFSA AML/CFT POLICY

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EXISTING CUSTOMER – MATERIALITY & RISKo RI to apply CDD to existing customer on basis of materiality& risk at appropriate timeso RI in assessing materiality & risk may consider the followingfactors :-

(a) nature & circumstances of transaction(b) materiality change in acct / biz(c) insufficient information / change to customer’s info.

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LFSA AML/CFT POLICY

LEGAL PERSON & LEGAL ARRANGEMENTo RI required to identify the customer & verify identitythru following info:-

a) Name, legal form & proof of existence incl. M&A, F24& F49 COI or any other reliable references to verifyidentity.b) Powers that regulate & bind the customer incl. Powerof Attorney, Trust Deed or other doc.c) If RI in doubt, conduct search & verify authenticity ofinformation.

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LFSA AML/CFT POLICY

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LOCAL AMLATFPUAA REPORTED CASES

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Characteristics:• Unclear investment schemes• Member find members (pyramid scheme/ponzi)• Market products only to foreigners – Malaysians are not allowed to participate• Internet based

Payme Inc.Incorporated in offshore centre

Payme Inc.Local agent operating in Malaysia

Open accountin local bank

Hundreds of investors from throughout the world deposited their investmentDisclosed to Enforcement Agency

LEALEA FIED, BNM

Report STRs

Local Bank

Charged In Court64

CASE STUDY 1

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LAND Forging 2 Land Titles

RM4 million (Cheques)

Standard Chartered BankNominee Acct (SAF)

Issues Cheque forRM2 million to GKB

Fund Transfer of RM1 million to IH wife account in CIMB

Sale to Innocent 3rd parties. [Cheating]

Credited cheques into Bank Acct

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CASE STUDY 2

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• Government servant with financial activities (e.g numerous deposits andwithdrawals to/from various accounts, transfer of funds) not commensuratewith his employment• Analysis shows funds are transferred from the government servant’s accountto his and other people’s accounts in several banks• There are other financial activities from other banks, insurance companiesand stock broking firms• None of these institutions reported his suspicious activities

• 7 other banks did not report any STR• 2 insurance companies did not report any STR – mortgage, household itemsand motor insurance• Huge over the counter cash transaction by third party on his behalf• Huge cash payment for insurance policy• Early settlement of loan was not reported – origin of funds may be suspicious• High value property (more than RM500,000) with loan application only for30% - 50% of the value

Bank A – Report STR

FIED – AnalyseSTR

Other banks -Findings

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CASE STUDY 3

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“COMPLIANCE COMPLEMENTS BUSINESS”

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Mr. VIJAYARAJ R KANNIAHManaging Partner SHEILA HUSSAIN VIJAY & PARTNERSAdvocate & Solicitors8trium Menara 2, Level 6, M2-6-03, Jalan Cempaka SD 12/5, Bandar Sri Damansara PJU 9,52200 Kuala Lumpur.Tel : 03-62632995Fax : 03-62638995H/P : 012-3181794E-mail : [email protected] :Managing DirectorVISIOON BUSINESS SOLUTIONS SDN BHD(COMPLIANCE TRAINING & ADVISORY)

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Anti Money laundering and Risk Based Methodologies by Mr ...

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