The government has taken various preventive measures to check illegal financial outflows and the measures will be further intensified to reduce unlawful financial outflows.

Joint efforts between the relevant agencies on the issue began in 2008, culminating in the establishment of a task force in 2011.

The task force comprises the Attorney-General’s Chambers, Royal Malaysian Customs Department, Royal Malaysia Police, Malaysian Anti-Corruption Commission, Inland Revenue Board, Immigration Department and Bank Negara Malaysia (BNM).

The task force’s role is to spearhead effective coordination and collaboration among key law enforcement authorities as well as between local and international enforcement agencies to mitigate illicit activities and financial flows.

Greater collaborations between local agencies and their international counterparts through the sharing of databases, information and intelligence and joint enforcement actions, with some of them facilitated by the task force had yielded positive results in combating illegal activities.

Moving forward, the trade mispricing issue will also be mitigated with the introduction of Goods and Services Tax (GST) which requires reporting of value-added at various stages of production, BNM said.

Continued concrete and coordinated efforts between various enforcement agencies, including across borders, will continue to be pursued to ensure the integrity and stability of the Malaysian financial system to address the issue, the central bank said.

Effective Dec 1, 2011, the new Money Services Business Act 2011, under the purview of Bank Negara Malaysia, came into force to support the development of a more dynamic and competitive money services business industry.

It comprised money changing, remittances and wholesale currency businesses.

“The relicensing exercise of all money services businesses was completed in 2012, resulting in the number of money changers being reduced from 839 to 511,” said BNM in a statement today.

The central bank said the exercise has enhanced the capacity of the money services business industry to be more professional and prevent the players from becoming a conduit to illegal fund transfer activities.

The preventive exercise also resulted in the approval of qualified moneychangers as remittance agents, which is expected to facilitate the migration of remittances, especially by foreign workers, from informal to formal channels.

The Money Services Business Act 2011 further complements the measures that have been put in place and actions taken under the Anti-Money Laundering & Anti-Terrorism Financing Act 2001 (AMLATFA 2001).

Well-supported by robust legislation

The AMLATFA 2001, which came into force on Jan 15, 2002 criminalises money laundering of proceeds from serious crimes.

BNM said Malaysia was now well-supported by robust legislation to counter illegal financial flows.  

The Inland Revenue Board has taken action on entities and individuals who have evaded corporate taxes.

The board had also conducted tax audit on firms and has strengthened its enforcement to minimise tax evasion.

The Customs Department has intensified its enforcement efforts, which have produced results shown by the significant rise in tax and duties collections.

On mitigating trade mispricing, the Customs Department has also taken action against entities and individuals who have evaded customs duties especially in cases of under-and over-invoicing of exports and imports of goods.

It has taken action against phantom shipments and other falsification of the value or quantity of shipments.

“Tighter monitoring and surveillance at various entry and exit points are in place, including the installation of closed-circuit televisions and scanners.

“In addition, all travellers (Malaysian residents and non-residents) are required to declare to the customs if they carry into or out of Malaysia cash in amounts exceeding US$10,000 or its equivalent in ringgit and in foreign currencies,” it added.

- Bernama