Opening Speech: Annual Meeting of The Asia/Pacific Group on Money Laundering (APG)

OPENING SPEECH: ANNUAL MEETING OF THE ASIA/PACIFIC GROUP ON MONEY LAUNDERING (APG)

YB SENATOR TENGKU DATUK SERI UTAMA ZAFRUL AZIZ
MINISTER OF FINANCE MALAYSIA

TUESDAY | 26 JULY 2022 | 12.30 – 12.50 PM
KUALA LUMPUR CONVENTION CENTRE

SALUTATIONS

Thank you, Deputy Governor Marzunisham Omar for the kind introduction.

Yang Berbahagia. Tan Sri Nor Shamsiah Mohd Yunus,
Governor of Bank Negara Malaysia,

Mr T. Raja Kumar,
President of the Financial Action Task Force (FATF),

Deputy Governor Marzunisham Omar, and

Deputy Commissioner Ian McCartney,

Co-Chairs of the Asia / Pacific Group on Money Laundering (APG),

Dr Gordon Hook,
Executive Secretary of the APG,

Distinguished guests and delegates, Ladies and gentlemen,

Assalamualaikum warahmatullahi wabarakatuh and a very good afternoon.

INTRODUCTION

1. On behalf of the Government of Malaysia, I would like to wish all delegates a very warm welcome and sincerely hope that you are enjoying your stay in Malaysia.
   
   
2. We are honoured to host this year’s edition of the Asia Pacific Group on Money Laundering (APG) Annual Meeting in Kuala Lumpur, after our last hosting which took place over 20 years ago. This year is very special as we are also celebrating the 25th Anniversary of the APG as an autonomous regional anti-money laundering body.

FINDING OPPORTUNITIES WHILE BALANCING OUR FOCUS IN FACING THE CURRENT GLOBAL CHALLENGES

Ladies and gentlemen,

3. While it is good to be able to meet physically again and most of us are returning to our pre-pandemic activities, increasingly, the world is facing new challenges.
   
   
4. Paving our way out of the pandemic, governments globally are confronted with new challenges across economic, financial, and social spheres. Just like the rest of the world, we are experiencing major disruptions in supply chains and navigating high inflation, including sharp increases of commodity and food prices on the back of the geopolitical conflict in Ukraine, weakening currencies against the US dollar as well as rapidly tightening global monetary and financial conditions.
   
   
5. Despite these circumstances, the Malaysian economy remains firmly on the path of recovery. It registered a growth of 5.0 percent in the first quarter of the year, and is on track to grow between 5.3 to 6.3 per cent in 2022, supported by improvements seen in the domestic labour market, business and consumer confidence, wholesale and retail trade, as well as continued expansion in manufacturing performance, to name a few.
   
   
6. While governments around the world, including ours, have reprioritised their responsibilities due to current challenges that we are facing, we believe this should not distract us from continuing with the structural reforms which are critical to sustain economic development and progress as a nation.

COMMITMENT OF THE MALAYSIAN GOVERNMENT TO PURSUE REFORMS IN GOVERNANCE

Ladies and gentlemen,

7. One particular area of focus is integrity and good governance.
   
   
8. Both are the bedrock to support the recovery ahead sustainably. The Malaysian government therefore remains steadfast in strengthening our governance framework.
   
   
9. Of course, our economic recovery cannot be sustained unless it is accompanied by sound institutional and structural reforms. This is critical as a lack of integrity will make us vulnerable to being subverted by corruption. In this regard, the fight against corruption remains a core foundation in pursuing our reform agenda.
   
   
10. Malaysia’sNationalMoneyLaunderingandTerrorismFinancingRisk Assessment 2020, or the NRA, identified corruption as one of the most prevalent offences that give rise to money laundering, together with smuggling, fraud, illicit drug trafficking and organised crime.
    
    
11. Corruptionwasalsorecognisedasanenablerthatdirectlyfacilitates the commission of other major crimes. Globally, the cost of corruption is well known. The IMF estimated that revenues are higher in countries perceived to be less corrupt. The least corrupt governments collect 4 percent of GDP more in taxes than those at the same level of economic development with the highest levels of corruption.
    
    
12. Recognising this, the Malaysian government remains committed in implementing the identified measures under the National Anti- Corruption Plan 2019 - 2023 (NACP) to achieve the following three goals:
    
    
    • Firstly, Accountability and credibility of judiciary, prosecution, and law enforcement agencies;
      
      
    • Secondly, Efficiency and responsiveness in public service delivery; and
      
      
    • Thirdly, Integrity in business.
      
      
13. Ongoing initiatives under the NACP include the introduction of a comprehensive policy on disclosure of conflict-of-interest for government procurement as well as implementation of a corporate liability provision under section 17A of the MACC Act that created a new strict liability offence for a commercial organisation. In addition, the Special Court for Corruption has expanded the application of technology to improve institutional efficacy of the judicial system in handling corruption cases.
    
    
14. The government has also established the National Anti-Financial Crime Centre (NFCC) in 2019 to combat broader financial crime. The NFCC is entrusted to:
    
    
    • Firstly, coordinate integrated operation among enforcement agencies;
      
      
    • Secondly, maintain a centralised data system; and
      
      
    • Thirdly, carry out activities relating to the prevention of financial crimes.
      
      
15. To chart the immediate direction of the NFCC, the National Anti- Financial Crime Strategic Plan 2020 - 2024 was developed with a mission to reduce the threats of high impact financial crime through a whole-of-government approach.
    
    
16. The Malaysian government is also committed to carrying out other policy recommendations. This includes, among others:
    
    
    • The development of the National Good Governance Plan (MyGovernance) which focuses on the principles of Transparency, Accountability, Competency and Effectiveness; and
      
      
    • More recently, the launch of the Principles of Good Governance (PGG) which will ensure that GLICs and SMEs under GLICs’ ecosystem are better prepared to meet the growing demands of the global market.
      
      
17. Furthermore, the government is actively monitoring illegal activities that have led to revenue leakages such as smuggling. The effort is spearheaded by a Multi-Agency Task Force as well as the NFCC through coordination of joint operations across relevant enforcement agencies. In particular, there is an ongoing project to recover 5 billion ringgit within five years of loss of revenue arising from the smuggling of cigarettes and liquor.
    
    
18. Our fight against these high-risk crimes will continue to be supported by strong collaboration across enforcement agencies and the financial intelligence community. Overall, I would like to stress that these commitments across the government agencies are bearing fruit. In 2021, the disclosures of suspicious transaction reports have successfully resulted in 70 arrests of various offences, 136 million ringgit of criminal proceeds being frozen or seized, and revenue recovery of more than 255 million ringgit.
    
    
19. The World Governance Indicator also shows that Malaysia has improved its percentile ranking from the past 10 years in the voice and accountability, regulatory quality, rule of law and control of corruption dimensions. Similarly, we rank higher compared to the average of East Asia & Pacific region especially in the government effectiveness and regulatory quality dimensions.

MALAYSIA’S COMMITMENT TO ADVANCING AML/CFT AGENDA

Ladies and gentlemen,

20. Malaysia has come along way since the enactment of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, or the AMLA in short, 21 years ago. Over the years, we have enhanced our law, regulation, supervision, preventive measures, and enforcement to respond to the latest risk environment as well as to be in line with international standards and best practices.
    
    
21. Recognising the importance of awhole-of-government approach, we have expanded our National Coordination Committee to Counter Money Laundering (NCC) to 17 agencies and ministries, without which, effective AML/CFT efforts in Malaysia will not be possible.
    
    
22. The NCC has endorsed a Road map that laysout key strategic focus and national action plans for 2021 - 2023 which will be undertaken by both public and private sectors. Recognising the need to combat more sophisticated financial crimes in the future, the Roadmap will also push for greater application of data science or technology-based solutions to improve our surveillance and intelligence tools.
    
    
23. Working in partnership is not a new concept but something Malaysia constantly strives to do. Moving forward, we will further strengthen the collaboration between our law enforcement agencies and the private sector.
    
    
24. MyFINet is our existing public-private partnership platform that currently focuses on corruption, smuggling, securities-related offences as well as terrorism and terrorism financing. Moving forward, the scope of MyFINet will be expanded to address other high-risk crimes identified in the NRA.
    
    
25. In addition, we will also empower self-regulatory bodies such as the Malaysian Bar Council and Malaysian Institute of Accountants, in driving capacity-building efforts and monitoring the implementation of AML/CFT measures in their respective sectors. I am confident that this would further strengthen our AML/CFT regime in the coming years.
    
    
26. Furthermore, Malaysia is preparing for the next round of FATF/APG Mutual Evaluation Exercise which will likely take place in 2024. Malaysia accords great importance to the Mutual Evaluation, as we see this as an independent assessment of the effectiveness of our AML/CFT regime while identifying areas for improvement.
    
    
27. As we are among the first countries to undergo the next cycle of Mutual Evaluation in the region, we also look forward to sharing our experiences with our regional counterparts in preparing for their respective evaluations.

ROLES OF APG IN SPEARHEADING AML/CFT EFFORTS IN THE REGION

Ladies and gentlemen,

28. Malaysia is appreciative of the strong support from all counter parts in our AML/CFT journey thus far. Malaysia has benefited significantly from the APG Secretariat and members who have displayed solid commitment and dedication to deliver APG’s mandate through the Mutual Evaluation Exercise and other initiatives.
    
    
29. With that in mind, I would like to take this opportunity to congratulate APG as the largest FATF-Style Regional Body (FSRB) for the impactful 25 years in navigating AML/CFT efforts in the region, and for being one of the most advanced FSRBs in the Global Network.
    
    
30. Key to this is the role of APG in facilitating and sustaining the regional momentum of AML/CFT efforts. Against the backdrop of the pandemic, this role is even more vital to foster greater and seamless collaboration to collectively address common threats in the region such as organised crime, smuggling, drug trafficking and terrorism financing. These financial crimes are evolving and taking on more complex forms. Increasingly, these crimes cross-borders, thus requiring further collaboration among countries.
    
    
31. We need to level up our strategy and partner with wider parties so that we can be more inclusive in our fight against money laundering and terrorism financing.
    
    
32. To that end, I am glad that APG has been providing the necessary support in this respect and will continue to be an important platform for members to establish a strong network to enhance cooperation in the region.
    
    
33. I believe that tapping and learning from each other’s experiences will help us in addressing emerging ML/TF risks and challenges. This would also enable countries to better customise AML/CFT measures in accordance with their domestic context.

CLOSING

Ladies and gentlemen,

34. The APG Annual Meeting this year also marks the conclusion of Malaysia’s tenure as the APG Co-Chair. Despite the limitations due to the pandemic over the last two years, I am pleased to note that Malaysia has delivered a set of priorities to support capacity building in the areas of data analytics, public-private partnership (PPP), and supervision of the Designated Non-Financial Businesses and Professions (DNFBPs). Malaysia will continue to actively participate and support the work of the APG in the coming years.
    
    
35. Before I end, let me take this opportunity to thank all delegates who are participating in this Annual Meeting. I wish all of you a successful Plenary and trust you will take the time to enjoy the sights in Kuala Lumpur throughout your stay here.

Thank you.

Wabillahi taufiq wal hidayah Wassalamualaikum warahmatullahi wabarakatuh.