Bank Negara Malaysia (BNM) had, on 19 June 2025, imposed an Administrative Monetary Penalty (AMP)^[1] of RM340,000 on Alipay Malaysia Sdn. Bhd. (Alipay) for non-compliances with paragraph 48(1)(a) of the Financial Services Act 2013 (FSA). This is read together with paragraphs 27.3.5, 27.3.7, 27.4.2, 27.6.1, and 27.7.1 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 update the sanctions database upon publication of the Domestic List^[3] and United Nations Security Council Resolutions (UNSCR) List^[4]. They are also required to conduct sanctions screening on their entire customer database for any positive name match upon publication of the respective lists by the relevant authorities without delay. Upon any match to its customer, RIs are required to freeze the customer’s funds and submit a report to BNM without delay.

The non-compliances were discovered by BNM following Alipay’s report of several transactions conducted by a customer identified as a specified entity^[5] of the Domestic List.  Alipay had failed to update its internal sanctions database following changes to the Domestic List upon publication in the Gazette. This impacted the subsequent screening of its customers, and the delay in freezing the customer’s account and reporting to BNM.

Alipay has since revised its internal policies and processes to ensure prompt update of its sanctions database and subsequent screening, freezing and reporting of any specified entities.  

In determining the imposition of the AMP, BNM considered the relevant aggravating and mitigating factors, including:

1. the seriousness of the breaches which led to transactions being conducted by the sanctioned individual;
2. lack of reasonable care by Alipay in complying with sanctions screening requirements;
3. this is Alipay’s first non-compliance of such nature; and
4. the assessment of Alipay’s post-conduct behaviour, including the remedial actions taken to rectify its policies and procedures.

Alipay paid RM340,000 for the AMP imposed by BNM on 3 July 2025.

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

^[1] BNM imposed the AMP pursuant to section 234(3)(b)(i) of the FSA.

^[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 27.3.5, 27.3.7, 27.4.4, 27.6.1 and 27.7.1 of the AML/CFT/CPF and TFS for FIs PD.

^[3] Domestic List is a list of names and particulars of specified entities declared by the Minister of Home Affairs under the relevant subsidiary legislation made under section 66B(1) of Anti Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA), following the entities involvement in acts of terrorism.

^[4] UNSCR List is a list of names and particulars of persons as designated by the United Nations Security Council (UNSC) or its relevant Sanctions Committee pursuant to the relevant UNSCR and are deemed:

1. specified entities by virtue of section 66C(2) of the AMLA for TFS-TF, and
2. designated persons under the relevant Strategic Trade Act 2010 (STA) subsidiary legislation for TFS-PF.

^[5] Individuals or entities listed in the Domestic List and UNSCR List