Record-keeping by reporting institutions
(1) A reporting institution shall keep a record of any transaction involving the domestic currency or any foreign currency exceeding such amount as the competent authority may specify.
(2) The record referred to in subsection (1) shall be in such form as the competent authority may specify.
(3) The record referred to in subsection (1) shall include the following information for each transaction:
(a) the identity and address of the person in whose name the transaction is conducted;
(b) the identity and address of the beneficiary or the person on whose behalf the transaction is conducted, where applicable;
(c) the identity of the accounts affected by the transaction, if any;
(d) the type of transaction involved, such as deposit, withdrawal, exchange of currency, cheque cashing, purchase of cashier’s cheques or money orders or other payment or transfer by, through, or to such reporting institution;
(e) the identity of the reporting institution where the transaction occurred; and
(f) the date, time and amount of the transaction,
and shall also include such other information as the competent authority may specify in writing.
(4) For the purposes of this Part, multiple cash transactions in the domestic or foreign currency which, in aggregate, exceeds the amount specified by the competent authority pursuant to subsection
(1) shall be treated as a single transaction if they are undertaken by or on behalf of any one person during any one day or such other period as the competent authority may specify.
Report by reporting institutions
A reporting institution shall promptly report to the competent authority any transaction—
(a) exceeding the amount specified by the competent authority under subsection 13(1); and
(b) where the identity of the persons involved, the transaction itself or any other circumstances concerning that transaction gives any officer or employee of the reporting
institution reason to suspect that the transaction involves proceeds of an unlawful activity.
Centralisation of information
A reporting institution shall provide for the centralisation of the information collected pursuant to this Part.
Identification of account holder
(1) A reporting institution—
(a) shall maintain accounts in the name of the account holder; and
(b) shall not open, operate or maintain any anonymous account or any account which is in a fictitious, false or incorrect name.
(2) A reporting institution shall—
(a) verify, by reliable means, the identity, representative capacity, domicile, legal capacity, occupation or business purpose of any person, as well as other identifying information on that person, whether he be an occasional or usual client, through the use of documents such as identity card, passport, birth certificate, driver’s licence and constituent document, or any other official or private document, when establishing or conducting business relations, particularly when opening new accounts or passbooks, entering into any fiduciary transaction, renting of a safe deposit box, or performing any cash transaction exceeding such amount as the competent authority may specify; and
(b) include such details in a record.
(3) A reporting institution shall take reasonable measures to obtain and record information about the true identity of the person on whose behalf an account is opened or a transaction is conducted if there are any doubts that any person is not acting on his own behalf, particularly in the case of a person who is not conducting any commercial, financial, or industrial operations in the foreign State where it has its headquarters or domicile.
(4) For purposes of this section, “person” shall include any person who is a nominee, agent, beneficiary or principal in relation to a transaction.
Retention of records
(1) Notwithstanding any provision of any written law pertaining to the retention of documents, a reporting institution shall maintain any record under this Part for a period of not less than six years from the date an account has been closed or the transaction has been completed or terminated.
(2) A reporting institution shall also maintain records to enable the reconstruction of any transaction in excess of such amount as the competent authority may specify, for a period of not less than six years from the date the transaction has been completed or terminated.
(3) Subsections (1) and (2) will not apply where a reporting institution has transmitted the record to the competent authority or an enforcement agency.
(4) Any reporting institution which contravenes subsection (1) or (2) commits an offence and shall on conviction be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both.
Opening account in false name
(1) No person shall open, operate or authorise the opening or the operation of an account with a reporting institution in a fictitious, false or incorrect name.
(2) Where a person is commonly known by two or more different names, the person shall not use one of those names in opening an account with a reporting institution unless the person has previously disclosed the other name or names to the reporting institution.
(3) Where a person using a particular name in his dealings with a reporting institution discloses to it a different name or names by which he is commonly known, the reporting institution
shall make a record of the disclosure and shall, upon request in writing from the competent authority, give the competent authority a copy of that record.
(4) For the purposes of this section—
(a) a person opens an account in a false name if the person, in opening the account, or becoming a signatory to the account, uses a name other than a name by which the person is commonly known;
(b) a person operates an account in a false name if the person does any act or thing in relation to the account (whether by way of making a deposit or withdrawal or by way of communication with the reporting institution concerned or otherwise) and, in doing so, uses a name other than a name by which the person is commonly known; and
(c) an account is in a false name if it was opened in a false name, whether before or after the commencement date of this Act.
(5) Any person who contravenes this section commits an offence and shall on conviction be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both.
Compliance programme
(1) A reporting institution shall adopt, develop and implement internal programmes, policies, procedures and controls to guard against and detect any offence under this Act.
(2) The programmes in subsection (1) shall include—
(a) the establishment of procedures to ensure high standards of integrity of its employees and a system to evaluate the personal, employment and financial history of these employees;
(b) on-going employee training programmes, such as “knowyour-customer” programmes, and instructing employees with regard to the responsibilities specified in sections 13, 14, 15, 16 and 17; and
(c) an independent audit function to check compliance with such programmes.
(3) A reporting institution shall implement compliance programmes under subsection (1) on its branches and subsidiaries in and outside Malaysia.
(4) A reporting institution shall also designate compliance officers at management level in each branch and subsidiary who will be in charge of the application of the internal programmes and procedures, including proper maintenance of records and reporting of suspicious transactions.
(5) A reporting institution shall develop audit functions to evaluate such policies, procedures and controls to test compliance with the measures taken by the reporting institution to comply with the provisions of this Act and the effectiveness of such measures.
Secrecy obligations overridden
The provisions of this Part shall have effect notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by any written law or otherwise.
Obligations of supervisory or licensing authority
(1) The relevant supervisory authority of a reporting institution or such other person as the relevant supervisory authority may deem fit may—
(a) adopt the necessary measures to prevent or avoid having any person who is unsuitable from controlling, or participating, directly or indirectly, in the directorship, management or operation of the reporting institution;
(b) examine and supervise reporting institutions, and regulate and verify, through regular examinations, that a reporting institution adopts and implements the compliance programmes in section 19;
(c) issue guidelines to assist reporting institutions in detecting suspicious patterns of behaviour in their clients and these guidelines shall be developed taking into account modern and secure techniques of money management and will serve as an educational tool for reporting institutions’ personnel; and
(d) co-operate with other enforcement agencies and lend technical assistance in any investigation, prosecution or proceedings relating to any unlawful activity or offence under this Act.
(2) The licensing authority of a reporting institution may, upon the recommendation of the competent authority, revoke or suspend the reporting institution’s licence if it has been convicted of an offence under this Act.
(3) The relevant supervisory authority shall report promptly to the competent authority any information received from any reporting institutions relating to transactions or activities that could be related to any unlawful activity or offence under this Act.
Powers to enforce compliance
(1) An officer of a reporting institution shall take all reasonable steps to ensure the reporting institution’s compliance with its obligations under this Part.
(2) The competent authority, upon application to the High Court and satisfying the Court that a reporting institution has failed without reasonable excuse to comply in whole or in part with any obligations in this Act, shall obtain an order against any or all of the officers or employees of that reporting institution on such terms as the Court deems necessary to enforce compliance with such obligations.
(3) Notwithstanding subsection (2), the competent authority may direct or enter into an agreement with any reporting institution that has without reasonable excuse failed to comply in whole or in part with any obligations in this Part to implement any action plan to ensure compliance with its obligations under this Part.
(4) Any person who contravenes subsection (1) or fails to comply with a directive under subsection (3) commits an offence and shall on conviction be liable to a fine not exceeding one hundred thousand ringgit or to imprisonment for a term not exceeding six months or to both, and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction.
Currency reporting at border
(1) A person leaving or entering Malaysia with an amount in cash, negotiable bearer instruments or both, exceeding such value as the competent authority may prescribe by order published in the Gazette, shall declare to the competent authority such amount in such form as the competent authority may specify.
(2) Any person who contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both.
(3) Notwithstanding the Exchange Control Act 1953 [Act 17] and the Central Bank of Malaysia Act 1958, the Controller of Foreign Exchange shall have authority to submit to the competent authority information received under section 24 or 25 of the Exchange Control Act 1953.
(4) Any declaration required to be made or given under subsection (1) shall for the purposes of the Customs Act 1967 [Act 235] be deemed to be a declaration in a matter relating to customs.
Protection of persons reporting
(1) No civil, criminal or disciplinary proceedings shall be brought against a person who—
(a) discloses or supplies any information in any report made under this Part; or
(b) supplies any information in connection with such a report, whether at the time the report is made or afterwards;
in respect of—
(aa) the disclosure or supply, or the manner of the disclosure or supply, by that person, of the information referred to in paragraph (a) or (b); or
(bb) any consequences that follow from the disclosure or supply of that information, unless the information was disclosed or supplied in bad faith.
(2) In proceedings against any person for an offence under this Part, it shall be a defence for that person to show that he took all reasonable steps and exercised all due diligence to avoid committing the offence.
Examination of a reporting institution
(1) For the purposes of monitoring a reporting institution’s compliance with this Part, the competent authority may authorise an examiner to examine—
(a) any of the reporting institution’s records or reports that relate to its obligations under this Part, which are kept at, or accessible from, the reporting institution’s premises; and
(b) any system used by the reporting institution at its premises for keeping those records or reports.
(2) In carrying out the examination under subsection (1), the examiner may—
(a) ask any question relating to any record, system or report of a reporting institution; and
(b) make any note or take any copy of the whole or part of any business transaction of the reporting institution.
Examination of person other than a reporting institution
(1) An examiner authorised under section 25 may examine—
(a) a person who is, or was at any time, a director or an officer of a reporting institution or of its agent;
(b) a person who is, or was at any time, a client, or otherwise having dealings with a reporting institution; or
(c) a person whom he believes to be acquainted with the facts and circumstances of the case, including an auditor or an advocate and solicitor of a reporting institution,
and that person shall give such document or information as the examiner may require within such time as the examiner may specify.
(2) Any person who contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both, and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction.
(3) Notwithstanding any other written law, an agent, including an auditor or an advocate and solicitor of a reporting institution, shall not be liable for breach of a contract relating to, or a duty of, confidentiality for giving any document or information to the examiner.
Appearance before examiner
(1) A director or an officer of a reporting institution examined under subsection 25(1), or a person examined under subsection 26(1), shall appear before the examiner at his office upon being called to do so by the examiner at such time as the examiner may specify.
(2) Any person who contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both, and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction.
Destruction of examination records
The competent authority may destroy any document or copy of such document made or taken pursuant to an examination under sections 25 and 26 within six years of the examination except where a copy of the document has been sent to an enforcement agency.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
