Money Laundering

• Money Laundering


  The process that disguises the source of money which come from an illegal act or a way to wash or clean the money from its criminal origin or source
• Bank Negara Malaysia (BNM AML/CFT)


  The process of converting cash or property derived from the criminal activities to give it a legitimate appearance. In other word, it is a process to clean a dirty money to disguise its criminal origin
• How money laundering is done

  1. Convert the money into readily movable assets

  2. Move cash outside the jurisdiction to invest in such business or trading at an increasing prices to emigrant funds

  3. Ways used by the merchants in an attempt to evade taxation
• Money laundering


  A process of making an illegally obtained money to appear legal
• AMLA 2001 illustrates the type of activities involving money laundering in which inter alia referring to an act of a person who is involved with the proceeds of any unlawful activity
• BNM AML/CFT


  Act of providing financial support, funded from illegitimate source, to terrorist or terrorist organisation to enable them to carry out terrorist act or will benefit any terrorist or the organisation
• PP v Ong Seng Seh - new form of commercial crime that has been codified as criminal offence. White collar crimes. No physical violence but could penetrate if it is left unchecked could lead any country's economy to demolish
• Offences under Section 4(1) of AMLA 2001


  • Engage, direct or indirectly involved in the proceeds of unlawful activity
  • Obtain, receive, possesses, transfer, convert, trade, carries, disposes or uses proceeds of an unlawful activity
  • Take out or bring into Malaysia such unlawful proceeds of an unlawful activity
  • Conceal, disguise or hinder the proceeds of an unlawful activity
• Punishment for money laundering offence

  Prison < 15 years and fine < 5 times the sum or value or RM 5M whichever higher
• Section 4A(1) to be read together with Section 14 (1)(a)- nobody is allowed to make, give any instruction or be part of any transaction in the domestic or foreign currency exceeding the specified by the competent authority(BNM)
• Punishment for exceeding specified transaction amount

  Fine <5 times the amount or value or imprisonment <7 years or both
• Techniques of money laundering

  1. Placement - the money is placed/ deposited into the financial institution

  2. Layering - moving the money around the bank system (multiple transfer and re-transfer), repeat involving the same transaction, resale of assets originally purchased in cash by using the illicit fund

  3. Integration - withdraw the money from the account and use the money from the account and use the money to buy property or high value item, invoice manipulation to remit money abroad or engage in legal business by providing loan or capitals
• Economic Distortion


  • Development of the sectors that runs the business legally will impede- products are supplied at a lower that the production cost
• Socio-Economic Cost


  • Dirty money become legal after the transaction