Kuala Lumpur: Malaysian business owners engaged in international transactions are advised to maintain comprehensive records and promptly report any suspicious activity to Bank Negara Malaysia (BNM) to ensure compliance with the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA). Lawyer Guok Ngek Seong, who has nearly 25 years of experience in civil and criminal litigation, emphasized the importance of diligence in the face of stringent regulatory scrutiny.
According to BERNAMA News Agency, Guok highlighted that companies in high-risk sectors such as maritime, petroleum, and logistics, which frequently conduct foreign exchange transactions, must exercise heightened diligence in documenting their operations. This advice comes in light of recent actions by BNM, which imposed administrative monetary penalties amounting to RM4.95 million on several financial institutions for breaches of statutory and regulatory obligations.
The penalties were related to non-compliance with provisions under the Development Financial Institutions Act 2002 and failures to adhere to requirements under the Anti-Money Laundering, Countering Financing of Terrorism, and Targeted Financial Sanctions for Financial Institutions Policy Document. These regulatory actions underscore the need for robust compliance measures, especially in sectors exposed to cross-border transactions.
Guok stressed that proper record-keeping may serve as a key defense should a company come under investigation for alleged money laundering or involvement in unlawful activities. He noted that BNM has the authority to conduct annual checks on such entities to ensure compliance with AMLA regulations.
When discussing legal procedures, Guok explained that litigants might obtain court orders through pre-action discovery or the Norwich Pharmacal process. These orders enable parties to seek disclosure from individuals or entities not directly involved in the anticipated proceedings. Norwich Pharmacal orders, in particular, allow a litigant to compel a third party, who is not implicated in the alleged wrongdoing but is innocently involved, to disclose information necessary to identify or pursue the actual wrongdoer.
Guok cautioned against potential abuses of such applications, emphasizing the need to balance them against the principle of banker-client privilege. He noted that obtaining documents from banks is sometimes crucial, especially in tracing suspicious transactions linked to fraudulent activities.
He further explained that the Bankers' Books (Evidence) Act 1949 (BBEA) restricts the compellability of bank officers to produce bankers' books when the bank is not a party to the proceedings. However, the court retains the discretion to issue such orders where appropriate, weighing banker-client confidentiality against the issues in the particular suit.
Guok concluded by acknowledging that while some discovery applications may be deemed an abuse of process, others are genuine, particularly when litigants need bank documents to trace the money trail in their cases.