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Circular No 147/2011
Dated 12 July 2011
To all Members of the Malaysian Bar
Anti-Money Laundering and Anti-Terrorism Financing Act 2001:
Checklist for Legal Firms and Compliance Report
Bank Negara Malaysia (“BNM”), the competent authority under the Anti-Money Laundering
and Anti-Terrorism Financing Act 2001 (“AMLATFA”), conducted on-site examinations on
selected legal firms from 16 Aug to 2 Sept 2010, and found law firms’ compliance with
AMLATFA and the guidelines issued thereunder to be weak.
To improve the level of compliance, Bar Council has formulated a checklist to assist
Members in working their way through the “Know Your Client” guidelines issued by BNM
pursuant to AMLATFA. Prior to opening a client’s file, Members are advised to ask certain
questions on the proposed transactions that their legal firms have been instructed to act upon.
Members should go through the items listed in the checklist to ensure that all necessary
information has been obtained. This checklist should be kept with every new client’s file and
shown to BNM during an on-site examination.
Further, in order to monitor the level of compliance, BNM has sought Bar Council’s
assistance to urge law firms to complete and submit an AMLATFA Compliance Report on
BNM’s website on a yearly basis. The Compliance Report is law firm based and requires a
partner/managing partner/sole proprietor selected by the firm to submit on behalf of all the
lawyers in the law firm. The website link to submit the Compliance Report on BNM’s
website will be provided to Members at a later date.
Law firms are strongly urged to register on BNM’s website and complete the Compliance
Report to ensure compliance with AMLATFA. Failure to comply could lead to BNM
imposing more intrusive directives on all law firms, including legal penalties for non-
compliance.
Please note that Members will be asked to indicate in their 2012 Bar Council Sijil Annual
Application Form Checklist whether their law firms have submitted the Compliance Report.
Attached please find the checklist for law firms, in English and Bahasa Malaysia versions,
and the “Guidelines on Anti-Money Laundering and Anti-Terrorism Financing” issued by
Bar Council.
Thank you.
Tony Woon Yeow Thong
Secretary
Malaysian Bar
ANTI-MONEY LAUNDERING AND ANTI-TERRORISM ACT 2001
CHECKLIST
YES NO
A. PREVIEW OF TRANSACTION
1. Does this transaction involve:
1.1 buying and selling of immovable property � �
1.2 managing of client money, securities or other property � �
1.3 managing of accounts including savings and securities accounts � �
1.4 organising of contributions for the creation, operation or management � �
of companies
1.5 creating, operating or managing of legal entities or arrangements and � �
buying and selling of business entities
1.6 acting as a company secretary in the course of providing any of the
following services to third parties:
1.6.1 acting as a formation agent of legal entities � �
1.6.2 acting as (or arranging for another person to act as) a director or � �
secretary of a company, a partner of a partnership, or a similar
position in relation to other legal entities
1.6.3 providing a registered office, business address or � �
accommodation, correspondence or administrative address for a
company, a partnership or any other person or arrangement
1.6.4 acting as (or arranging for another person to act as) a trustee of � �
an express trust
1.6.5 acting as (or arranging for another person to act as) a nominee � �
shareholder for another person
If the answer to any part of Question 1 is “YES”, then this transaction falls within
the ambit of the Anti-Money Laundering and Anti-Terrorism Financing Act 2001
as it applies to advocates and solicitors.
B. PARTIES TO THE TRANSACTION
2.1 Are you aware of the identity of the person(s) from the client whom you � �
are receiving instructions in respect of this transaction?
2.2 Are you aware of the identity of the other person(s) or party(ies) � �
involved in this transaction?
YES NO
2.3 Have you to the extent possible obtained the following information or
copies of the following documents from the client?
2.3.1 names and aliases � �
2.3.2 identification documents such as identity cards and passports � �
2.3.3 place of residence � �
2.3.4 particulars of employment � �
2.3.5 occupation and business activities � �
2.3.6 country of origin and residence � �
2.3.7 company registration number � �
2.3.8 tax and revenue references � �
[Note: A profile on the identity and background of the client and other persons involved in
the transaction should be compiled for each transaction.]
2.4 In the case of the client who is not a Malaysian citizen or resident, have � �
you considered the client’s:
2.4.1 connection with Malaysia � �
2.4.2 history of acquaintance and development of relationship with � �
Malaysian individuals and entities.
[Note: In the case of other parties involved in the transaction, it may not be convenient or
appropriate to demand information to the same extent but information should be gathered
along similar lines. In any case, an advocate & solicitor is entitled as against any party to
expect a reasonable amount of information in order to enable him/her to verify if nothing else
the identity and the validity of such acts and deeds of the party involved as may affect the
interest of his client.]
3. Are there any circumstances concerning the parties to the transaction � �
which gives reason to suspect that the parties are involved in an unlawful
activity?
C. PROFILE OF TRANSACTION
4. In reviewing the proposed transaction, have you considered:
4.1 Whether any party is or appears to be a mere nominee or agent. � �
4.2 The intended effect of the transaction. � �
4.3 The purport of documents used in the transaction. � �
YES NO
4.4 The consideration or bargain. � �
4.5 Whether the purport of the documents are consistent with the intended � �
effect of the transaction.
4.6 Whether any aspect of the transaction is in any way misdescribed � �
or is a misnomer.
4.7 Whether the consideration appears to be real and sufficient on an � �
arm's length basis or for some acceptable reason is not unusual.
5. Are there any concerns regarding the nature of the documentation related � �
to this transaction which give reason to suspect that the transaction is not
genuine and/or involves proceeds of an unlawful activity?
6. In reviewing the other circumstances surrounding the proposed transaction,
have you considered or noted:
6.1 Lacunas or missing elements in the transaction. � �
6.2 Misnomers and disguises. � �
6.3 Inconsistencies with what would be expected of such a transaction. � �
6.4 Unexplained elements. � �
6.5 Any unusual reluctance to provide information. � �
6.6 Any information provided which invites scepticism. � �
6.7 Any element which gives the transaction an unusual or extraordinary � �
aspect.
6.8 Any special unique or exclusive elements provided by any party as � �
rendering the particular transaction special unique.
6.9 Any unusual or extraordinary requirements for secrecy and � �
confidentiality.
6.10 Any casualness with matters of importance. � �
7. Is there anything in relation to the other circumstances of the proposed � �
transaction which gives reason to suspect that the transaction is not genuine?
D. PROGNOSIS OF TRANSACTION YES NO
8. Based on the review of the proposed transaction, do you have any � �
concerns about the proposed transaction?
9. If the answer to Question 8 is “YES”, have you discussed your concerns � �
with any other advocate and solicitor in your firm?
10. What conclusion have you arrived at in respect of these concerns? In � �
particular, do you feel that a Suspicious Transaction Report should be filed?
SENARAI SEMAK AKTA PENCEGAHAN PENGUBAHAN WANG HARAM DAN
PENCEGAHAN PEMBIAYAAN KEGANASAN 2001
A. KAJIAN AWAL URUS NIAGA
1. Adakah urus niaga ini melibatkan urusan: YA TIDAK
1.1 membeli dan menjual harta tak alih � �
1.2 menguruskan wang, sekuriti atau harta lain pelanggan � �
1.3 menguruskan akaun termasuk akaun simpanan dan sekuriti � �
1.4 mengendalikan sumbangan untuk penubuhan, operasi atau pengurusan � �
syarikat
1.5 mewujudkan, mengendalikan atau menguruskan entiti atau urusan � �
yang berkaitan dengan undang-undang serta membeli dan menjual entiti
perniagaan
1.6 bertindak sebagai setiausaha syarikat dalam proses menyediakan apa-apa khidmat
berikut kepada pihak ketiga:
1.6.1 bertindak sebagai ejen pembentukan entiti undang-undang � �
1.6.2 bertindak sebagai (atau mengaturkan orang lain supaya � �
bertindak sebagai) pengarah atau setiausaha syarikat, rakan niaga
perkongsian atau jawatan serupa yang berkaitan dengan entiti
undang-undang lain
1.6.3 menyediakan pejabat berdaftar, alamat perniagaan atau alamat � �
tempat tinggal, surat-menyurat atau pentadbiran untuk syarikat,
perkongsian atau mana-mana orang atau apa-apa urusan lain
1.6.4 bertindak sebagai (atau mengaturkan orang lain supaya � �
bertindak sebagai) pemegang amanah bagi amanah nyata
YA TIDAK
1.6.5 bertindak sebagai (atau mengaturkan orang lain supaya � �
bertindak sebagai) pemegang saham namaan bagi orang lain
Jika jawapan bagi mana-mana bahagian dalam Soalan 1 ialah “YA”, maka urus niaga ini
termasuk dalam lingkungan Akta Pencegahan Pengubahan Wang Haram dan Pencegahan
Pembiayaan Keganasan 2001 kerana ia terpakai untuk peguam bela dan peguam cara.
B. PIHAK DALAM URUS NIAGA
2.1 Adakah anda tahu tentang identiti individu dari pihak pelanggan � �
yang memberi anda arahan berhubung dengan urus niaga ini?
2.2 Adakah anda tahu tentang identiti individu atau pihak lain yang � �
terlibat dalam urus niaga ini?
2.3 Adakah anda, setakat yang mungkin, telah menerima maklumat berikut atau salinan
bagi dokumen berikut daripada pelanggan?
2.3.1 nama dan alias (nama lain) � �
2.3.2 dokumen pengenalan diri seperti kad pengenalan dan � �
passport
2.3.3 tempat tinggal � �
2.3.4 butiran pekerjaan � �
2.3.5 pekerjaan dan aktiviti perniagaan � �
2.3.6 negara asal dan tempat tinggal � �
2.3.7 nombor pendaftaran syarikat � �
2.3.8 rujukan cukai dan pendapatan � �
[Nota: Profil identiti dan latar belakang pelanggan serta orang lain yang terlibat dalam urus
niaga hendaklah disusun bagi setiap urus niaga.]
2.4 Jika pelanggan bukan warganegara Malaysia atau tidak bermastautin di Malaysia,
sudahkah anda meneliti:
2.4.1 hubungan pelanggan dengan Malaysia � �
2.4.2 sejarah urus niaga dan perkembangan urus niaga antara � �
pelanggan dengan individu dan entiti Malaysia.
[Nota: Jika beberapa pihak lain terlibat dalam urus niaga, ia mungkin tidak mudah atau wajar
untuk meminta maklumat sebegitu tetapi maklumat yang lebih kurang sama hendaklah
diperoleh. Dalam apa-apa hal, peguam bela & peguam cara berhak mendapatkan daripada
mana-mana pihak jumlah maklumat yang wajar bagi membolehkannya mengesahkan, jika
tiada apa-apa perkara lain, identiti dan kesahihan akta dan surat ikatan pihak yang terlibat
yang boleh menjejaskan kepentingan pelanggannya.]
3. Adakah terdapat apa-apa keadaan berkenaan dengan pihak dalam urus niaga � �
tersebut yang memberikan sebab untuk mengesyaki bahawa pihak tersebut terlibat
dalam aktiviti yang menyalahi undang-undang?
C. PROFIL URUS NIAGA
4. Dalam mengkaji semula urus niaga yang dicadangkan, sudahkah anda menimbangkan:
YA TIDAK
4.1 Sama ada mana-mana pihak merupakan atau didapati menjadi � �
penama atau ejen sahaja.
4.2 Kesan yang diharapkan daripada urus niaga tersebut. � �
4.3 Maksud dokumen yang digunakan dalam urus niaga. � �
4.4 Pertimbangan atau tawar-menawar. � �
4.5 Sama ada maksud dokumen selaras dengan kesan yang diharapkan � �
dalam urus niaga.
4.6 Sama ada apa-apa aspek urus niaga dalam apa jua cara tersalah � �
hurai atau tidak padan namanya.
4.7 Sama ada pertimbangan nampaknya nyata dan mencukupi � �
berdasarkan prinsip urus niaga tulus atau, bagi sesetengah sebab � �
yang boleh diterima, ia adalah lazim.
5. Adakah terdapat apa-apa kebimbangan bagi ciri dokumen yang berkaitan � �
dengan urus niaga ini yang menimbulkan sebab untuk mengesyaki bahawa
urus niaga tersebut adalah palsu dan/atau melibatkan hasil daripada aktiviti
yang menyalahi undang-undang?
6. Dalam mengkaji semula keadaan lain bagi urus niaga yang dicadangkan,
adakah anda menimbangkan atau memberikan perhatian kepada:
YA TIDAK
6.1 Kelompangan atau elemen yang hilang dalam urus niaga. � �
6.2 Nama yang tidak padan atau penyamaran. � �
6.3 Ketakselarasan dengan apa yang boleh dijangka daripada urus niaga � �
tersebut.
6.5 Elemen yang tidak dapat dijelaskan. � �
6.6 Apa-apa keengganan luar biasa untuk memberikan maklumat. � �
6.7 Apa-apa maklumat yang diberikan yang menimbulkan keraguan. � �
6.8 Apa-apa elemen yang menyebabkan urus niaga tampak tidak � �
lazim atau luar biasa.
6.9 Apa-apa elemen khusus, tersendiri atau berbeza sama sekali yang � �
diberikan oleh mana-mana pihak yang menjadikan urus niaga
tersebut khusus dan tersendiri.
6.9 Apa-apa permintaan tidak lazim atau luar biasa terhadap kerahsiaan. � �
6.10 Apa-apa sikap bersahaja berhubung dengan perkara penting. � �
7. Adakah terdapat apa-apa perkara berhubung dengan keadaan lain dalam � �
urusniaga yang dicadangkan itu yang menimbulkan sebab untuk mengesyaki
bahawa urus niaga tersebut adalah palsu?
D. PROGNOSIS URUS NIAGA
8. Berdasarkan kajian semula ke atas urus niaga yang dicadangkan, adakah � �
anda mempunyai apa-apa kebimbangan terhadap urus niaga yang
dicadangkan?
YA TIDAK
9. Jika jawapan bagi Soalan 8 ialah “YA”, sudahkah anda membincangkan � �
kebimbangan anda dengan mana-mana peguam bela dan peguam cara lain
di syarikat anda?
10. Apakah kesimpulan yang boleh anda ambil berhubung dengan � �
kebimbangan ini? Adakah anda merasakan, secara khususnya, bahawa
Laporan Urus Niaga yang Meragukan perlu dibuat?
Anti-Money Laundering & Anti-Terrorism Financing Compliance Guidelines
Bar Council Guidelineson
Anti-Money Laundering & Anti-Terrorism Financing
The Reporting Obligation
1. Section 14(b) of the Anti-Money Laundering Act 2001 (“Act 613”) imposes on areporting institution an obligation to report a transaction:
“... where the identity of the persons involved, the transaction itself or any othercircumstances concerning that transaction gives any officer or employee of thereporting institution reason to suspect that the transaction involves proceeds ofan unlawful activity.”
2. Reference should be made to the legislative Overview of Reporting Obligation publishedby the Bar Council Task Force on Anti-Money Laundering and Anti-Terrorism Financing(“the Task Force”).
Transactions Affected
3. On 30 September 2004, this obligation to report suspicious transactions was imposed onthe advocate & solicitor in the following specified areas of activities:
a. buying and selling of immovable property
b. managing of client money, securities or other property
c. managing of accounts including savings and securities accounts
d. organising of contributions for the creation, operation or management ofcompanies
e. creating, operating or managing of legal entities or arrangements and buying andselling of business entities
f. and as a company secretary in the course of providing any of the followingservices to third parties:
i. acting as a formation agent of legal entities
ii. acting as (or arranging for another person to act as) a director or secretaryof a company, a partner of a partnership, or a similar position in relationto other legal entities
iii. providing a registered office, business address or accommodation,correspondence or administrative address for a company, a partnership orany other person or arrangement
iv. acting as (or arranging for another person to act as) a trustee of an expresstrust
v. acting as (or arranging for another person to act as) a nominee shareholderfor another person
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Anti-Money Laundering & Anti-Terrorism Financing Compliance Guidelines
Compliance Guidelines
4. These guidelines are intended to aid the advocate & solicitor in his compliance with theobligation to report suspicious transactions encountered in his work in the specified areas.
5. As the circumstances giving rise to an obligation to report is couched in objective termsand the obligation is to make the report promptly, the advocate & solicitor shouldundertake specific measures to ensure that neither he nor his partners or employees comein danger of non-compliance with the duty to report. The burden is made all the moreheavy on him by the vicarious liability (for the acts and omissions of partners, legalassistants and other employees) which appear to be intended to be imposed by sections87 and 88 of Act 613.
6. It is recommended that measures for compliance with the reporting obligation be takenin the following areas:
a. in office procedures
b. exception handling
c. scrutiny
7. In support of these direct measures, education and training in this area of complianceshould be implemented through:-
a. information dissemination and updates national and worldwide developments inmoney-laundering and terrorism financing
b. training of advocates & solicitors, legal clerks and other office staff
c. procedures to profile the 3 areas of each transaction which may give rise to areason for suspicion:
i. the identity of the parties,
ii. the transaction itself, and
iii. any other circumstances concerning the transaction.
8. Reference should be made to the Compliance Framework recommended by the TaskForce.
Profile on Client
9. A profile on the identity and background of the client and other persons involved in thetransaction should be compiled for each transaction as a matter of course in accordancewith a formal procedure implemented in the office.
10. The profile on the client should include information and documents such as:-
a. names and aliases
b. identification documents such as identity cards and passports
c. place of residence
d. particulars of employment
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Anti-Money Laundering & Anti-Terrorism Financing Compliance Guidelines
e. occupation and business activities
f. country of origin and residence
g. company registration number
h. tax and revenue references
11. In the case of the client who is not a Malaysian citizen or resident:
a. connection with Malaysia
b. history of acquaintance and development of relationship with Malaysianindividuals and entities.
Profile on Other Parties
12. In the case of other parties involved in the transaction, it may not be convenient orappropriate to demand information to the same extent but information should be gatheredalong similar lines.
13. In any case, an advocate & solicitor is entitled as against any party to expect a reasonableamount of information in order to enable him to verify if nothing else the identity and thevalidity of such acts and deeds of the party involved as may affect the interests of hisclient.
Profile on Transaction
14. The profile on the transaction itself should include reviewing:-
a. whether any party is or appears to be a mere nominee or agent
b. the intended effect of the transaction
c. the purport of documents used in the transaction
d. the consideration or bargain
e. whether the purport of the documents are consistent with the intended effect ofthe transaction
f. whether any aspect of the transaction is in any way misdescribed or is a misnomer
g. whether the consideration appears to be real and sufficient on an arm's lengthbasis or for some acceptable reason is not unusual.
Profile on Other Circumstances
15. The profile on other circumstances concerning the transaction should include:-
a. lacunas or missing elements in the transaction
b. misnomers and disguises
c. inconsistencies with what would be expected of such a transaction
d. unexplained elements
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Anti-Money Laundering & Anti-Terrorism Financing Compliance Guidelines
e. noting any unusual reluctance to provide information
f. noting any information provided which invites scepticism
g. noting any element which gives the transaction an unusual or extraordinary aspect
h. noting any special unique or exclusive elements provided by any party asrendering the particular transaction special unique
i. noting any unusual or extraordinary requirements for secrecy and confidentiality
j. noting any casualness with matters of importance
Vigilance
16. The financial institutions are at the forefront of the gatekeepers drawn into the anti-money laundering regulatory regime and would most likely have filtered out many of themore obvious attempts at legitimising illegal proceeds. Therefore, the advocate &solicitor should be vigilant that no client or party be allowed to exploit his position andstature and privilege to lend legitimacy to a transaction involving illegal proceeds.
Anti-Money Laundering and Anti-Terrorism Financing Task ForceBar Council Malaysia
06 May 2005
