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Anti-Money Laundering Act Enhanced

02 April 2026

The Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities (Amendment) Act 2025 (“Amendment Act”) came into operation on 1 March 2026.1
 
The following are among the significant amendments made to the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“Principal Act”).2
 
Change of name
 
The Principal Act is renamed as the “Anti-Money Laundering, Anti-Terrorism Financing, Anti-Restricted Activity Financing and Proceeds of Unlawful Activities Act 2001.”
 
Offence of financing of restricted activity
 
As the amendment to the name of the Principal Act suggests, the ambit of the Principal Act is expanded to address the offence of financing of a “restricted activity”, which is defined in the Strategic Trade Act 2010 as (a) any activity that supports the development, production, handling, usage, maintenance, storage, inventory or proliferation of any weapon of mass destruction and its delivery systems; or (b) participation in transactions with persons engaged in such activities.   
 
A new Part VIB (sections 66H to 66J) introduces specific provisions into the Principal Act in relation to “restricted activity financing offence.”
 
The new section 66H provides that any person who, directly or indirectly, provides or makes available financial services or property (a) intending that such services or property be used, or knowing or having reasonable grounds to believe that such services or property will be used, in whole or in part, to commit or facilitate the commission of a restricted activity, or for the purpose of benefiting any person who is committing or facilitating the commission of a restricted activity; or (b) knowing or having reasonable grounds to believe that, the financial services or property, in whole or in part, will be used or will benefit any proliferator3, commits an offence which is punishable with imprisonment for a term not exceeding 15 years and a fine of not less than five times the sum or value of the proceeds of proliferator property4 or RM5.0 million, whichever is the higher.
 
Under the new section 66I, the competent authority5 or regulatory or supervisory authority may issue any direction, instruction, guideline, circular, etc., to, or impose any condition on, the institutions under their regulation or supervision in order to discharge any obligation binding on Malaysia by virtue of a decision of the United Nations Security Council for the purposes of preventing any restricted activity financing offence. Any institution which fails or refuses to comply or contravenes such direction, instruction, guideline, circular, etc. issued, commits an offence which is punishable with a fine not exceeding RM1.0 million.
 
The new section 66J empowers the competent authority or regulatory or supervisory authority to conduct examinations on the institutions under their regulation or supervision on such institutions’ compliance with the requirements in Part VIB.
 
It is to be noted that several other provisions in the Principal Act are amended to include references to “restricted activity financing offence” and “proliferator property” (e.g. sections 44(1), 45(1), 51(1), 55(1) and 56(1)).
 
Definition of “serious offence” expanded
 
The definition of “serious offence” in section 3(1) is amended to include a new sub-paragraph (aa) which declares “any offence under the federal law in respect of which the punishment provided by the federal law is imprisonment for a period of one year or more” to be a serious offence. This amendment significantly extends the reach of the Principal Act.
 
Clarifying the punishment for offence of money laundering
 
Section 4(1) has been amended to make it clear that upon conviction of an offence of money laundering, the existing punishments of a term of imprisonment not exceeding 15 years and a fine  of not less than five times the value of the proceeds of an unlawful activity or instrumentalities of an offence or RM 5 million, whichever is the higher, are both mandatory.6 
 
Responsibility of director, officer or employee
 
The obligations and responsibilities of a reporting institution and the sanction for an offence by a reporting institution in many provisions of the Principal Act are extended to a person who is a director, officer or employee of the reporting institution (e.g. sections 13(1), 16(1), 17(1), 18(3) and 19(1)).
 
Seizure and forfeiture provisions
 
The provisions relating to seizure and forfeiture of property under the Principal Act have been enhanced.
 
Section 52A
 
Two amendments are made to section 52A which provides for the expiry of the seizure order made in respect of any property seized by an investigating officer or an enforcement agency under the Principal Act (e.g. sections 45, 50, 51 and 52). First, the 12 months’ expiry period for the seizure order is extended to 18 months; and second, it is now clarified that section 52A also applies where no prosecution for any offence under the Principal Act has been instituted with regard to the property seized under the seizure order.
 
Section 28L
 
Where there is no prosecution or conviction for an offence under Part IVA, the time frame within which the Public Prosecutor (“PP”) is to apply to the High Court under section 28L(2) for a forfeiture order of any property seized under Part IVA is extended from 12 months to 18 months.
 
Section 53
 
This section, which facilitates the application by the PP for an order from the High Court to prohibit a person from dealing with property held outside Malaysia, has among others, been amended in the following respects: 
  1. the application may be made on an ex parte basis; 
  2. the duration of an order granted under this section is extended from 12 months to 18 months if the person against whom the order was made is not charged with an offence under the Principal Act or if no prosecution for any offence under the Principal Act has been instituted with regard to the property seized under the Court order; 
  3. a new section 53(4) permits the PP to apply for an extension of the order by way of an ex parte application; and 
  4. a new section 53(5) confers discretion on the Court to extend the order for a period not exceeding 12 months. 
Section 56
 
Section 56, which provides the procedure for the forfeiture and release of seized property where there is no prosecution, has been amended in, among others, the following respects: 
  1. where no prosecution is initiated, the time frame for the PP to apply to the High Court under section 56(1) for a forfeiture order is extended from 12 months to 18 months from the date of the seizure order or the date of the freezing order, as the case may be; 
  2. where there is no conviction, the time frame for the PP to apply to the High Court for a forfeiture order is three months from the date of no conviction; and 
  3. in line with the extension of the time frame mentioned in sub-paragraph (1) above, section 56(3) is amended to provide that if no application is made for forfeiture of the property under section 56(1), the seized property is to be released upon the expiration of 18 (instead of 12) months from the date of the seizure. 
Section 61
 
This section confers the right on bona fide third parties claiming to have an interest in property to show cause why the property should not be forfeited. For avoidance of doubt, a new section 61(2A) makes it clear that any third party who fails to attend Court on the date of the hearing has no right to make any claim after a forfeiture order is made.
 
Provisions on freezing, seizure and forfeiture expanded
 
The provisions in Part VI relating to freezing, seizure and forfeiture of property which previously applied only to money-laundering offences under section 4(1) (“money laundering offence”) and terrorism financing offences are expanded to include the offence of structuring, directing, assisting etc. a transaction in domestic or foreign currency under section 4A(2) to circumvent the reporting requirement threshold under section 14(1)(a) (“threshold circumvention offence”) and restricted activity financing offence. Where appropriate, the provisions in Part VI also apply to proliferator property.
 
Suppression of terrorism financing
 
Part VIA which contains specific provisions for suppression of terrorism financing offences has been enhanced in the following respects: 
  1. the powers exercisable by the relevant regulatory or supervisory authority under this Part have been extended to the competent authority; 
  2. the prohibitions under sections 66B(3)(a) to 66B(3)(d) which previously applied to Malaysian citizens and Malaysian incorporated bodies now apply to “any person”; and 
  3. a new section 66G empowers the competent authority or the regulatory or supervisory authority to conduct regular examinations of reporting institutions under their regulation or supervision to ensure compliance with Part VIA. 
Requirement to explain excessive holding of property
 
Based on investigations carried out under the Principal Act, if the PP has reasonable grounds to suspect that a money laundering offence, threshold circumvention offence, terrorism financing offence or restricted activity financing offence has been committed, the PP is empowered under section 49(1) to, by notice in writing, require a person suspected of committing such offence or the relative or associate of such person or any other person whom the PP has reasonable grounds to believe is able to assist in the investigation, to furnish a written statement on oath to provide information prescribed in that section in relation to every property owned by him and other information, such as his sources of income, business and travel.
 
A new section 49(3A) empowers the PP to require a person to whom a notice is sent under section 49(1), to furnish a written statement on oath explaining how he is able to own, possess, control or hold any interest in any property which is excessive, having regard to the person’s present and past emolument or income and all other relevant circumstances. Failure to provide an explanation is an offence which is punishable with a fine not exceeding RM3.0 million or imprisonment for a term not exceeding five years or to both.
 
Record keeping
 
The scope of the obligations under section 13(1) has been expanded. Previously, a reporting institution was required to keep a record of any transaction involving domestic currency exceeding a specified amount. The amendment to section 13(1) now requires a reporting institution, or its director, officer or employee, to keep a record of all domestic and international transactions or activities. For this purpose: 
  1. “transaction” includes (a) an arrangement to open an account involving two or more persons and any transaction related to the account; or (b) the transmission, transfer or exchange, involving funds or currency by any person; and includes a single or series of transaction, an attempted transaction or proposed transaction or any transaction specified by the competent authority (amended section 3(1) read with new section 16(7)(c)); and 
  2. “activity” refers to a single activity or a series of activities including any attempted activity or proposed activity for the purposes of activity carried out by a reporting institution under the First Schedule and as may be specified by the competent authority (amended section 16(7)(a)). 
The record to be maintained under section 13(1) now includes the identity and address of the person purporting to act on behalf of a customer in opening an account or carrying out a transaction or activity.
 
Further, all obligations in this section relating to a transaction have been extended to include an activity.
 
Reporting obligations
 
Section 14 is amended in the following respects: 
  1. all provisions referring to a transaction, where applicable, have been expanded to include activity; and 
  2. new obligations are imposed on a reporting institution to report to the competent authority: (a) any transaction, activity or property where its officer or employee has reason to suspect is related or linked to, used or intended to be used for or by, any restricted activity, proliferator or person who finances restricted activity; or (b) any suspicious transaction or activity as may be specified by the competent authority. 
Retention of records
 
The obligation of a reporting institution under section 17 to maintain records has been extended to include maintaining records to enable the reconstruction of any transaction or activity.
 
Powers of supervisory authority
 
The provisions relating to a supervisory authority in section 21 have been amended to include a reference to regulatory authority. Two other amendments to section 21 have extended the powers conferred on a regulatory or supervisory authority, namely: 
  1. the power to obtain from a reporting institution, or its director, officer or employee, any information, document, record or report as it deems fit to monitor the reporting institution from being exposed to money laundering, terrorism financing and restricted activity financing risks (new section 21(1)(aa)); and 
  2. section 21(1)(b) which previously permits the authority to examine and supervise reporting institutions, and verify that a reporting institution adopts and implements the compliance programme in section 19, now allows the authority to exercise the powers under this section to verify a reporting institution’s compliance with Part IV (which in addition to compliance programmes includes requirements related to record keeping, reporting and customer due diligence). 
Powers of investigation
 
The powers of investigation of an enforcement agency and the competent authority under Part V have been widened to include offences under Part VIA (terrorism financing offences) and Part VIB (restricted activity financing offences).
 
Disclosure of information by advocates and solicitors
 
The High Court’s power to order an advocate and solicitor to disclose information in relation to an investigation into any money laundering offence or terrorism financing offence has been extended to include investigations into a threshold circumvention offence and restricted activity financing offence (amended section 47(1)).
 
Functions of regulatory and supervisory authority
 
A new section 7A allows the Minister of Finance, upon the recommendation of the competent authority and after consultation with the Minister of Home Affairs for the purpose of Part VIA (specific provisions on terrorism financing), to appoint any person to be a regulatory or supervisory authority with all functions as may be specified by the Minister of Finance.
 
Coordination agency
 
A new agency, namely the “coordination agency” which is defined in section 3(1) as any agency that has coordination functions under any written laws in relation to serious offences under the Principal Act, is conferred authority to exercise certain functions and receive information and reports under sections 8 and 9.
 
Power to issue directions etc.
 
The power of the competent authority to issue guidelines, circulars or notices under section 83 has been expanded in several respects: 
  1. the documents that can now be issued to a reporting institution under section 83(1) include directions, instruction, standard, specification or requirement; 
  2. the competent authority may also impose any condition on a reporting institution or the director, officer or employee of the reporting institution; and 
  3. there is now an express requirement under the new section 83(2) for the reporting institution, or its director, officer or employee to comply with the document issued or condition imposed, in default of which the reporting institution, or the director, officer or employee may be liable to a fine not exceeding RM1.0 million under the new section 83(3). 
Additional powers of competent authority
 
Among the additional powers conferred on the competent authority or the regulatory or supervisory authority are the following: 
  1. to direct, or enter into an agreement with, a reporting institution or institution, or the director, officer or employee of the reporting institution or institution to implement any action plan to ensure compliance with obligations under the Principal Act (new section 83A); 
  2. to take an administrative action for any contravention of Part IV, Part VIA (except section 66B(3)) or Part IVB (except section 66H) (new section 83B); and 
  3. to take civil action for any breach under Part IV, Part VIA, Part VIB or of any direction, instruction, guideline, circular, standard, notice, specification or requirement issued, or any condition imposed under Part IV, Part VIA, Part VIB or Part VII (new section 83C). 
Comments
 
The Amendment Act not only introduces provisions to combat restricted activity financing offences but also significantly enhances the powers conferred under the Principal Act on government agencies in their on-going battle to suppress money laundering and terrorism financing in Malaysia.
 
 
Article by Lim Koon Huan (Partner) and Siew Ka Yan (Senior Associate) of the Compliance and Investigations Practice of Skrine.
 
 
 
1 Gazette Notification P.U.(B) 76/2026.
2 Unless otherwise stated, references in this article to “Part” and “section” are references to a Part or a section of the Principal Act.
3 The expression “proliferator” is defined in section 3(1) as any person who: (a) commits or attempts to commit any restricted activity; (b) participates in or facilitates the commission of any restricted activity; or (c) is designated as a prohibited end-user under section 8(2) of the Strategic Trade Act 2010.
4 The expression “proliferator property” is defined in section 3(1) as: (a) proceeds from the commission of any restricted activity; (b) property that has been, is being, or is likely to be used by a proliferator to commit any restricted activity; (c) property owned or controlled by or on behalf of a proliferator to commit any restricted activity, including funds derived or generated from such property; or (d) property that has been collected for the purpose of supporting a proliferator or funding any restricted activity.
5 Bank Negara Malaysia was appointed as the competent authority for the purposes of the Principal Act under the Anti-Money Laundering (Appointment of Competent Authority) Order 2002 [P.U.(A) 19/2002] when the Principal Act came into operation on 15 January 2002.
6 See paragraph 5 of Explanatory Statement to the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities (Amendment) Bill 2024.

This article/alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.

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