Anti-money laundering obligations and dismissal of bankers: evidence from Malaysia
| DOI | https://doi.org/10.1108/JMLC-06-2021-0062 |
| Published date | 07 August 2021 |
| Date | 07 August 2021 |
| Pages | 556-566 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Aspalella A. Rahman,Harlida Abdul Wahab |
Anti-money laundering
obligations and dismissal of
bankers: evidence from Malaysia
Aspalella A. Rahman and Harlida Abdul Wahab
Legal and Justice Research Centre, School of Law, Universiti Utara Malaysia,
Sintok, Malaysia
Abstract
Purpose –This paper aims to analysethe anti-money laundering (AML) obligationsimposed on bankers as
the main reportingentities under the AML regime in Malaysia. Apart from discussing the relevant provisions,
several court cases were also examinedto identify the problems which arisein the implementation of the law
and the risk of dismissalthat bankers may face.
Design/methodology/approach –This paper mainly relies on statutesand court cases as its primary
sources of information. It is supported by secondary data to justify the analysis. This paper also uses an
analytical descriptive approach to analyse relevant provisions from statutes and to examine current court
cases regardingthe implementation of the AML obligations on bankers.
Findings –It is submitted that the AML legislationimposes a significant burden of reporting requirements
on the bankers, failureof which may justify the dismissal or termination of their services. In other words,the
law has not only altered the way bankersdeal with their customers but also poses substantial legal risks to
their security of tenure. Indeed,getting the right balance between the need to combat money laundering and
the interestsof bankersis a difficult exercise.
Originality/value –This paper provides an analysis of the liability of bankers under Malaysian AML
laws. It is hoped that the content of thispaper can provide some insight into this particular area for bankers,
enforcement authorities,practitioners, academics, policymakers and legal advisers, not only in Malaysia but
also elsewhere. The findings of thispaper also highlight the risks that bankers may face fornon-compliance
with the reportingobligations under the AML laws.
Keywords Malaysia, Dismissal, Anti-Money laundering law, Banker, Reporting obligation
Paper type Research paper
Introduction
Large sums of money are launderedevery year globally. Financial services institutions such
as banks, non-banking financingcompanies, insurers and capital market firms are generally
the most favoured channels through which illicit money is laundered across the globe
(Ejanthkar and Mohanty, 2011). Money laundering can be defined as the process by which
criminals try to disguise the trueorigins of the proceeds of crimes and bring them into the
economic system. It is about hiding the source and ownership of funds earned from illegal
activities such as corruption, drug trafficking, terrorism, illegal gaming, bribery and
corruption, where certaintechniques are used to convert dirty money into clean money, such
as the conversion of cash into other assets, the establishment of business and using shell
companies (Kemal, 2014). The scope of money laundering is very extensive taking into
consideration the global emerging challenges such as the use of the internet (Shanmugam
and Thanasegaran, 2008), the increase in the electronic banking system (Bekhouche, 2018)
and digital technologies (Hossain, 2020). The typical drivers for money laundering are
JMLC
25,3
556
Journalof Money Laundering
Control
Vol.25 No. 3, 2022
pp. 556-566
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-06-2021-0062
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