Malaysia Has Comprehensive Legal Framework On Proliferation Financing - Task Force

KUALA LUMPUR, Dec 11 (Bernama) -- Malaysia has a comprehensive legal and regulatory framework for targeted financial sanctions (TFS)  related to proliferation financing (PF) pursuant to the United Nations Security Council Resolution (UNSCR) and its successor resolutions.

To date, Malaysia has not frozen any funds or other assets pursuant to the UNSCR; however, it has demonstrated multiple instances where competent authorities and RIs detected cases of potential PF sanctions evasion.

Malaysia has a functional framework for coordination and cooperation for counter-proliferation financing (CPF) policy development and implementation,  the Financial Action Task Force (FATF) and Asia/Pacific Group on Money Laundering (APG) said in its 275-page Mutual Evaluation Report (MER) released today.

PF risk understanding by competent authorities and Reporting Institutions (RIs) is supported by multiple sources, it said, adding that Malaysia conducted PF risk assessments in 2021 and 2024.

Competent authorities have also undertaken efforts to deepen PF risk understanding through outreach activities.

Challenges

“However, challenges remain for RIs in identifying beneficial owners (BOs) and accessing accurate, up-to-date BO information, which weakens Malaysia’s ability to detect and prevent sanctions evasion schemes,” the report said.

The ongoing implementation of institutional PF risk assessments by RIs is an important positive step in increasing awareness of PF TFS obligations.

However,  some RIs still rely on manual checks in updating their sanction database, which may cause issues in the timely implementation of asset freezing.

“The consistently high number of TFS compliance lapses in certain sectors also suggests the need for further enhancing RI compliance,” it added.

-- BERNAMA