BNM issues Supplementary Document No. 1 on Anti-Money Laundering & Anti-Terrorism Financing for Money Services Business

On 30 June 2021, Bank Negara Malaysia (“BNM”), the Central Bank of Malaysia, issued the Policy Document on Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions (AML/CFT and TFS for FIs) (Supplementary Document No. 1) – Money Services Business Sector (“Supplementary Document No. 1”).
The Supplementary Document No. 1 came into effect on 30 June 2021.
The Supplementary Document No. 1 applies to reporting institutions licensed under the Money Services Business Act 2011 which carry on remittance and money-changing businesses (“MSBRI”) and sets out obligations to be complied with by a MSBRI that proposes to use non-face to face (“non-FTF) onboarding verification process for its corporate customers.
Under the Money Services Business Act 2011:
  1. remittance business” means the business of transferring funds or facilitating the transfer of funds, in any form and by any means (whether or not involving movement of funds) on behalf of an originator person in or outside Malaysia, with a view to making the funds available to a beneficiary (who may be the originator person) in or outside Malaysia, but excludes any other businesses, activities, systems or arrangements as BNM may prescribe; and
  1. money-changing business” means all or any of the following businesses: (a) entering into an exchange transaction at a rate of exchange; (b) buying or selling travellers' cheques, on behalf of an issuer of travellers' cheques, at a rate of exchange; (c) such other business as BNM may prescribe.
Among other obligations, a MSBRI is required under the Supplementary Document No. 1 to obtain the approval of:
  1. the board of directors of the MSBRI before implementing non-FTF onboarding verification in establishing business relationships with its corporate customers (unless otherwise specified by BNM); and
  1. the Director of the Money Services Business Regulation Department of BNM to implement non-FTF for the provision of online or mobile remittance and money-changing business for their corporate customers.
Non-compliance with any requirements set out in the Supplementary Document No. 1 may result in enforcement or direction of corrective actions by BNM and/or suspension or revocation of the approval obtained for the implementation of the non-FTF onboarding verification.
A set of Frequently Asked Questions were issued at the same time as the Supplementary Document No. 1, and can be accessed here.
Alert by Lee Ai Hsian (Partner) and Tai Kean Lynn (Associate) of the Banking and Finance Practice of Skrine.

This 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.