Bank Negara Malaysia (BNM) had, on 11 June 2024, imposed a total administrative monetary penalty (AMP)^[1] of RM12,000 on People’s Corner Sdn. Bhd. (PCSB), a licensed money service business operating in Johor Bahru, for non-compliance with customer due diligence (CDD) requirements under section 74(3) of the Money Services Business Act 2011 (MSBA), to be read together with paragraph 14C.12 of Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions (AML/CFT and TFS for FIs) Policy Document. Additionally, on 22 April 2024, BNM had also imposed a compound^[2] of RM12,000 on PCSB, for its failure to comply with requirements under section 27(1) of the MSBA, to be read together with paragraph 5(a) of the Money Services Business (Duties of Licensees) Regulations 2012 on issuance of receipts to customers for money-changing transactions.

BNM detected the non-compliance with the CDD requirements and issuance of receipt involving a money-changing transaction above RM3,000 during an on-site examination conducted on PCSB in 2022. The breaches were facilitated through deliberate acts by PCSB’s personnel to split the transaction into amounts below the stipulated threshold for the conduct of CDD and avoid the issuance of receipt.

Reporting institutions (RIs) are required to maintain proper records of transactions, supported by receipts, and conduct CDD on their customers. These requirements serve to protect customers in the event of disputes and enable RIs to assess their exposure to money laundering (ML) / terrorism financing (TF) risks and take appropriate measures to prevent RIs from being conduits for facilitating ML/TF and other serious crime activities.

In deciding to impose the AMP and compound, BNM considered relevant aggravating and mitigating factors, which include:

1. the degree of culpability of individuals within PCSB leading to the non-compliances;
2. the effectiveness of controls in place to detect and prevent non-compliance; and
3. PCSB’s past compliance record.

PCSB has taken necessary actions to strengthen its compliance monitoring processes, improve staff awareness on regulatory requirements and undertake stern action against the personnel involved.

PCSB paid a total of RM12,000 for the imposed AMP on 20 June 2024 and RM12,000 for the imposed compound on 7 May 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 Enforcement Approach.

^[1] BNM issued the AMP pursuant to section 75(2)(b) of the MSBA.
^[2] BNM imposed the compound pursuant to section 88(1) of the MSBA.