Bank Negara Malaysia (BNM) had, on 28 August 2024, imposed an Administrative Monetary Penalty (AMP)^[1] of RM193,500 on Syarikat S.M. Ziaudeen Sdn. Bhd. (SSMZ) for non-compliances with customer due diligence (CDD) and ongoing due diligence (ODD) requirements under sections 74 and 75(1)(b) of the Money Services Business Act 2011 (MSBA). This is read together with paragraphs 14C.10.1, 14C.12.1, 14C.10.5 and 14C.14.1 of the Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions Policy Document (AML/CFT and TFS for FIs PD)^[2].

Under the AML/CFT and TFS for FIs PD, reporting institutions (RIs) are required to conduct CDD and ODD on its customers. These requirements aim to protect customers in the event of disputes and enable RIs to assess their exposure to money laundering (ML) and terrorism financing (TF) risks. This includes taking appropriate measures to prevent RIs from facilitating ML/TF and other serious crime activities.

BNM detected these non-compliances during an on-site examination. SSMZ failed to conduct CDD on individual and corporate customers in relation to twenty two money-changing transactions exceeding RM3,000 each.^[3] SSMZ also failed to conduct ODD on one customer’s transaction despite being flagged as high risk in its system. In response, SSMZ has taken remedial measures by strengthening its standard operating procedures and enhancing employee training.

In deciding to impose the AMP, BNM considered relevant aggravating and mitigating factors, including:

1. the degree of culpability of employees in the firm, leading to the non-compliances;
2. the effectiveness of controls in place to detect and prevent non-compliances;
3. SSMZ’s past compliance record; and
4. remedial actions taken by SSMZ to prevent the recurrence of non-compliance.

SSMZ paid RM193,500 for the AMP imposed by BNM on 28 August 2025.

The enforcement action taken is in line with the approach and processes outlined in the Enforcement Approach.

^[1] BNM issued the AMP pursuant to section 75(2)(b) of the Money Services Business Act 2011 (MSBA).

^[2] The AML/CFT and TFS for FIs PD was in effect from 1 January 2020 to 5 February 2024 and has since been superseded by the Anti-Money Laundering, Countering Financing of Terrorism, Countering Proliferation Financing and Targeted Financial Sanctions for Financial Institutions Policy Document (AML/CFT/CPF and TFS for FIs PD), which took effect on 6 February 2024. These requirements are preserved under paragraphs 14C.10.1, 14C.12.1, 14C.10.5 and 14C.14.1 of the AML/CFT/CPF and TFS for FIs PD.

^[3] Under paragraph 14C.12.1 of the AML/CFT and TFS for FIs PD, RIs must conduct CDD and obtain the relevant information, for transactions involving an amount between RM3,000 to RM10,000.