FAILURES to report suspicious transactions and conduct proper customer checks have exposed weaknesses in Malaysia’s safeguards against illicit funds, prompting Bank Negara Malaysia (BNM) to stress stricter compliance across professional services and financial institutions.
BNM deputy governor Datuk Marzunisham Omar said recent enforcement action against a company secretary and a Labuan investment bank demonstrated how compliance failures could create opportunities for criminals to operate.
In one case, BNM and the Companies Commission of Malaysia took action against a company secretary for failing to submit suspicious transaction reports involving foreigners suspected of being linked to an international fraud syndicate.
In a separate case, BNM and the Labuan Financial Services Authority took enforcement action against a Labuan investment bank over significant weaknesses in customer due diligence and delays in reporting suspicious transactions.
Marzunisham said the deficiencies had affected the bank’s ability to assess whether customers might be involved in unlawful activities overseas.
“While these cases may involve different sectors and circumstances, the message is the same: weaknesses in due diligence, vigilance and reporting create opportunities for criminals to operate.
“Professional services should not become channels through which illicit funds are made to appear legitimate, whether intentionally or otherwise,” he said at the DNFBP Compliance Conference 2026 yesterday.
Against this backdrop, BNM will conduct its next National Risk Assessment (NRA) in 2027 to examine money laundering and terrorism financing risks facing designated non-financial businesses and professions (DNFBPs).
Marzunisham said the findings would guide more targeted policies, guidance and risk mitigation measures tailored to individual sectors.
“Your practical insights are important to ensure our policy responses remain effective, balanced and grounded in the realities faced by each sector,” he said.
He added that an effective framework to combat money laundering, terrorism financing and the financing of weapons proliferation required not only strong legislation and policies, but also credible supervision and enforcement.
He warned that non-compliance in any part of the system could undermine the integrity of Malaysia’s overall financial crime prevention framework. - October 23, 2026