Anti-Money Laundering Declaration (Malaysia)

An Anti-Money Laundering Declaration in Malaysia captures the particulars required for the filing or submission it supports.

The AMLA 2001 imposes obligations on reporting institutions — defined in the First Schedule to include licensed banks under the Financial Services Act 2013, licensed Islamic banks under the Islamic Financial Services Act 2013, money services businesses licensed under the Money Services Business Act 2011, securities licensees regulated by the Securities Commission Malaysia under the Capital Markets and Services Act 2007, and designated non-financial businesses and professions (DNFBPs) such as lawyers, accountants, and real estate agents — to conduct customer due diligence (CDD) and enhanced due diligence (EDD) under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities (Reporting Obligations) Order 2014.

An AML Declaration is commonly required by reporting institutions as part of know-your-customer (KYC) and know-your-business (KYB) procedures under the Financial Action Task Force (FATF) Recommendations, to which Malaysia is a member through the Asia/Pacific Group on Money Laundering (APG). Bank Negara Malaysia's BNM/RH/STD 032-3 on Customer Due Diligence Guidelines further specifies the minimum information reporting institutions must obtain.

The consequences of money laundering under the AMLA 2001 are severe: Section 4(1) provides that a person who engages in money laundering commits an offence punishable by imprisonment of up to 15 years and a fine of not less than five times the sum or value of the proceeds of unlawful activity or RM 5 million, whichever is the higher. An AML Declaration alone does not exempt a declarant from criminal liability if the declaration is false, but it documents the declarant's compliance representations and supports the reporting institution's CDD record obligations under Section 16 of the AMLA 2001.

The legal framework governing the Anti-Money Laundering Declaration (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Anti-Money Laundering Declaration (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Federal Constitution of Malaysia sets the foundational requirements.

An Anti-Money Laundering Declaration in Malaysia is needed whenever a reporting institution or counterparty requires confirmation of the source of funds, beneficial ownership, or compliance with the AMLA 2001 as part of customer due diligence or enhanced due diligence.

An AML Declaration is required when opening a bank account with a licensed financial institution under the Financial Services Act 2013 or Islamic Financial Services Act 2013, particularly for corporate accounts, high-value accounts, or accounts for politically exposed persons (PEPs) as defined in Bank Negara Malaysia's CDD Guidelines.

An AML Declaration is needed when a company enters into a high-value commercial transaction — such as a property purchase above RM 3 million — requiring the lawyer or real estate agent (as designated non-financial businesses and professions under the AMLA 2001) to verify the source of funds.

An AML Declaration is required when applying for a money services business licence under the Money Services Business Act 2011, or when engaging the services of a licensed money changer, remittance service, or e-money issuer regulated by Bank Negara Malaysia.

An AML Declaration is needed when a foreign investor injects capital into a Malaysian company and the recipient company or its financial institution requires confirmation that the funds originate from lawful sources, consistent with the Securities Commission Malaysia's capital market requirements.

An AML Declaration is required in cross-border trade finance transactions where the bank or financial institution requires the exporter or importer to confirm that transaction proceeds are not connected to sanctioned entities listed under Bank Negara Malaysia's targeted financial sanctions list.

An AML Declaration is needed when a law firm, audit firm, or accounting practice registered with the Malaysian Institute of Accountants (MIA) or the Malaysian Bar conducts CDD on a new client pursuant to their reporting obligations under the AMLA 2001 and the respective professional body guidelines.

A complete Anti-Money Laundering Declaration in Malaysia under the AMLA 2001 framework must contain the following essential elements.

Declarant Identity: The declaration must identify the declarant — full legal name, NRIC or passport number for individuals, or company name and Companies Commission of Malaysia (SSM) registration number for corporate entities. For corporate entities, the authorised signatory's name and designation must be stated.

Source of Funds: The declaration must specify the source of funds involved in the relevant transaction or account — whether salary and employment income, business revenue, proceeds from sale of assets, inheritance, investment returns, or other legitimate sources. This directly addresses the requirements of customer due diligence under Bank Negara Malaysia's BNM/RH/STD 032-3 CDD Guidelines.

Beneficial Ownership: The declaration must confirm the beneficial owner of the funds — the natural person who ultimately owns or controls the funds, consistent with the definition of beneficial ownership under Regulation 2 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities (Reporting Obligations) Order 2014. For companies, beneficial owners holding 25% or more of shares or voting rights must be identified.

PEP Declaration: The declaration must state whether the declarant or any beneficial owner is a politically exposed person (PEP) — a senior government official, judge, military officer, or state-owned enterprise executive — or a family member or close associate of a PEP, as PEPs are subject to enhanced due diligence under the AMLA 2001.

Compliance Confirmation: The declaration must include a positive confirmation that the funds, assets, and transactions are not connected to money laundering, terrorism financing, proceeds of unlawful activities as defined in Section 3 of the AMLA 2001, or any entity subject to targeted financial sanctions administered by Bank Negara Malaysia.

Accuracy and Penalty Warning: The declaration must include an acknowledgement that providing false or misleading information constitutes an offence under Section 28 of the AMLA 2001, punishable by imprisonment of up to three years or a fine of up to RM 1 million.

Signature and Date: The declaration must be signed and dated by the declarant or authorised representative. For corporate declarations, the company seal or a resolution authorising the signatory may be required by the receiving institution.

Additional compliance elements for a Anti-Money Laundering Declaration (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.