Enforcement Of Anti-Money Laundering Measures By KPDN Throughout 2023

The Enforcement Division of the Ministry of Domestic Trade and Consumer Affairs (KPDN) enforced a total of 12 Acts involving price control, anti-profiteering, supply control of subsidised and essential goods, consumer protection, intellectual property protection, and domestic trade throughout the year 2023. KPDN also undertook efforts to combat money laundering under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA 2001) [Act 613].

Various methods are commonly used by traders to launder money, including direct methods such as integrating illicit proceeds into legitimate business or individual accounts. Structuring methods involve channeling funds through other businesses or individuals, creating shell companies, purchasing assets, making investments, repaying loans, insurance payments, and more. Another method is through ‘hawala,’ a money transfer system bypassing conventional banking or licensed financial companies, often involving cross-border transactions.

Throughout 2023, the KPDN Enforcement Division collaborated with other enforcement agencies to prevent financial crimes, including information sharing, training, and joint operations. Successful joint operations during the year included:

A joint operation to combat pyramid schemes and various offenses involving the Enforcement Division of KPDN, in collaboration with the National Financial Crime Prevention Centre (NFCC). This operation received support from the Royal Malaysia Police (PDRM), Bank Negara Malaysia (BNM), CyberSecurity Malaysia (CSM), focusing on Penang and Kedah.

Launched on March 1 and concluding on December 31, 2023, aimed at curbing the abuse of subsidised diesel oil causing losses to the government. The operation involved various enforcement agencies, including PDRM, Malaysian Maritime Enforcement Agency (APMM), Malaysian Armed Forces (ATM), Inland Revenue Board (LHDN), NFCC, and others.

A joint operation conducted by KPDN Enforcement Division and the Pharmacy Enforcement Division of the Ministry of Health Malaysia (KKM), Inland Revenue Board (LHDN), and in collaboration with NFCC. The operation focused on offenses under the Control of Drugs and Cosmetics Regulations 1984, Poison Act 1952, and Trademark Act 2019.

During 2023, a total of RM1,715,053.00 in compound value was offered and settled, while RM137,517.69 in movable property was forfeited, contributing to the Malaysian Government’s revenue. The amount successfully recovered for the Malaysian Government from cases subjected to forfeiture without prosecution and through settlements amounted to RM1,852,570.69. This figure is expected to increase as more ongoing cases conclude.

Records indicate that, for 2023, asset freezing valued at RM21,217,979.11 was executed involving movable property in financial institutions. Seizures were also conducted in 2023, involving RM1,043,601.77 in movable assets in financial institutions, RM2,607,181.00 in immovable assets, and RM84,964.00 in cash. The total value of seizures for 2023 amounted to RM3,735,746.77.

Overall, based on case statistics from 2016 to 2023, assets totaling RM56,628,198.30 were successfully forfeited, RM2,419,053.00 in compounds and RM12,000,000.00 in fines were collected. Consequently, the total revenue generated for the Malaysian Government through the enforcement of Act 613 by the KPDN Enforcement Division during this period is RM71,047,251.30.

KPDN faces several challenges in enforcing anti-money laundering measures, including the use of cash transactions for illegal activities outside the banking system, or the involvement of professionals such as accountants and company secretaries facilitating money laundering activities. A future challenge is the use of diverse cryptocurrencies, which are not recognised as legal tender in Malaysia.

Continuous actions will be taken by the Anti-Money Laundering Prevention Section of the KPDN Enforcement Division to strengthen the enforcement of Act 613 and recover illicit gains obtained under existing laws for the benefit of the Malaysian Government. The division will continue to collaborate with enforcement agencies, including the Attorney General’s Chambers, for information sharing, training, and operations. As a member of the National Coordination Committee for Anti-Money Laundering (NCC), KPDN will implement all relevant action plans to achieve set objectives.

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