Bank Negara Malaysia (BNM) had, on 29 January 2024, imposed a compound¹ of RM96,250 on Habib Jewels Sdn. Bhd. (Habib) for its failure to promptly submit suspicious transaction reports (STR) to BNM under section 14(1)(b) of Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA) read together with paragraphs 19.1.1 and 19.3.3 of Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Designated Non-Financial Businesses and Professions (DNFBPs) and Non-Bank Financial Institutions (NBFIs) Policy Document (AML/CFT and TFS for DNFBPs and NBFIs).

The non-compliance with the STR submission requirements, which took place over a period of one year, was detected by BNM during the on-site examination. Habib failed to promptly submit STRs on seven series of suspicious transactions by its customers even though the series of transactions matched Habib’s internal red flags. This failure is in breach of requirements set out in section 14(1)(b) of AMLA read together with paragraphs 19.1.1 and 19.3.3 of AML/CFT and TFS for DNFBPs and NBFIs.

Under AMLA, all reporting institutions are required to promptly report any suspicious transactions to BNM which is the competent authority as appointed under section 7(1) of the AMLA. This requirement serves to mitigate the risk of reporting institutions from being used as a channel for money laundering (ML), terrorism financing (TF) and other serious crime activities. Additionally, this report provides BNM and law enforcement agencies with valuable information and/or intelligence of potential criminal activities to support financial crime investigations.

The compound amount was determined in accordance with the Penalty Framework and in consideration of relevant aggravating and mitigating factors, which include:

1. the lack of reasonable care on the part of Habib in compliance of laws and its own standard operating procedures;
2. severity of the non-compliance;
3. this was Habib’s first non-compliance;
4. effective remedial actions taken by Habib to prevent recurrence of non-compliance; and
5. current compliance nature and practices by the dealers in precious metals and precious stones (DPMS) industry.

Habib has since strengthened its STR reporting mechanism and the functions of its Compliance Officer.

Habib paid a total of RM96,250 for the compound imposed by BNM on 23 February 2024.

The enforcement action taken is in line with the approach and processes outlined in the recently published Enforcement Approach document. For more information, please visit here.

^[1]BNM imposed the compound pursuant to section 92 of AMLA