anti-money laundering & counter financing of terrorism ... · pdf filepage 1 for internal...

1 PAGE FOR INTERNAL CIRCULATION & TRAINING PURPOSES ONLY CFE/STF/AML_CFT/03/04/2016V1

ANTI-MONEY LAUNDERING & COUNTER FINANCING OF TERRORISM (AML/CFT)

FRAMEWORK AND GUIDELINES

Agent’s Reading Material

2016

Disclaimer: “This reading material is purely used for the internal agency of Great Eastern Life Assurance (Malaysia) Berhad. All or any part of the contents of this reading material shall not be used directly or indirectly for soliciting insurance business, policyholder services and/or facilitating any other form of communications with any external party whatsoever. This information is correct as at 03/04/2016

2 PAGE FOR INTERNAL CIRCULATION & TRAINING PURPOSES ONLY

COURSE OBJECTIVES

To create awareness amongst agents and employees on Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) legislation and the regulatory guideline derived from it and appreciate its importance.

To create understanding of the AML/CFT framework that determines the AML/CFT policy and standards in the Company.

To create an understanding on the impact of money laundering and terrorist financing to the Company.



SCOPE OF COVERAGE

Definitions of Money Laundering & Terrorist Financing (ML/TF)

The Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT) Legislation & Bank Negara Malaysia (BNM) Guidelines

The AML/CFT Framework

Reporting Structure

Suspicious Cases – Modus Operandi

Other developments on AML/CFT



A process whereby criminals attempt to hide & disguise the true origin and ownership of the proceeds derived from criminal activities to give it a legitimate appearance.

“This is a process to make illegitimate income appear legitimate thereby avoiding prosecution, conviction &

confiscation of the criminal funds.”

Definition of Money Laundering



The definition of Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AMLA 2001”) states that Money laundering is the act of a person who: a) Engages, directly or indirectly, in a transaction that involves proceeds

from any unlawful activity.

b) Acquires, receives, possesses, disguises, transfers, converts, exchanges, carries, disposes, uses, removes from or brings into Malaysia proceeds of any unlawful activity.

c) Conceals, disguises or impedes the establishment of the true nature, origin, location, movement, disposition, title of, rights with respect to, or ownership of, proceeds of any unlawful activity.

Definition of Money Laundering Under

AML/CFT Legislation



The typical characteristics of money launderers are:-

Focused on intent

Innovative / Knowledgeable

Rich

Prepared to lose some money

Who are the Money Launderers?



Also called

“whitewashing”.

Conversion /

movements to

separate the illicit

proceeds from their

source

• To disguise

audit trail

• Provide an

appearance of

legitimacy

• Provide

anonymity

Introducing illegal profits into the financial system

After the Layering process, the money are then

reintroduced into the financial / business

system - for example: investments in business,

purchase of assets

Money Laundering Process



Financing of terrorism generally refers to carrying out transactions involving funds that may or may not be owned by terrorist, or that have been, or are intended to be, used to assist the commission of terrorism. More detailed description of financing of terrorism includes :

1) providing or collecting properties for carrying out an act of

terrorism

2) providing services for terrorism purposes 3) arranging for the retention or control of terrorist properties or dealing with terrorist properties.

Definition of Financing of Terrorism



Purpose : To ensure that insurance/takaful industry has a strong control and

initiative on anti-money laundering efforts.

Current AML/CFT Legislation and Regulation for insurance/takaful industry

include :

AML/CFT Legislation and Regulation

Note: The regulatory guideline was issued in accordance with the AMLA 2001 and Financial Action Task Force’s (FATF) 40 Recommendations for Implementation with effect from 15 September 2013. For more details on AML/CFT Legislation and Regulation, please visit: http://amlcft.bnm.gov.my/AMLCFT07.html

Anti-Money

Laundering, Anti-

Terrorism

Financing and

Proceeds of

Unlawful Activities

Act 2001 effective

on 15 /1/ 2002

(AMLA 2001)

previously known as

The Anti-Money

Laundering and Anti-

Terrorism Financing

Act 2001

1) JPI/GPI 27 -

Guidelines on Anti-

Money Laundering

Measures for the

Insurance Industry -

issued on

25/4/2001

2) JPI 20/2004 –

AMLA 2001

Verification

Procedures –

issued on

21/8/2004

1)

1)UPW/GP1 : Standard

Guidelines on Anti Money

Laundering and Counter

Financing of Terrorism

(AML/CFT).

2) UPW/GP1 [2]: Anti-

Money Laundering and

Counter Financing of

Terrorism (AML/CFT)

Sectorial Guidelines 2 for

Insurance and Takaful

Industries.

Originally Issued on

15/11/2006 and revision

on 3 /2/2009

1) BNM/RH/STD 029 –

1 Anti-Money

Laundering and

Counter Financing of

Terrorism (AML/CFT) –

Insurance and Takaful

(Sector 2)

Issued on 4/9/2013 and

took effect on

15/9/2013

New

Regulations Legislation


http://amlcft.bnm.gov.my/AMLCFT07.html


Government Agencies

Regulator Reporting

Institutions

Insurers Insurers

National Coordination Committee: • Companies Commission of Malaysia

• Labuan Financial Services Authority

• Registrar of Societies

• Securities commission

• Inland Revenue Board

• Immigration Department

• MACC

• Royal Malaysian Customs

• Royal Malaysia Police

• Ministry of Finance

• Ministry of Foreign Affairs

• Home Ministry

• Ministry of Domestic Trade

Cooperatives & Consumerism

• Attorney-General Chambers

• Ministry of International Trade &

Industry

Bank Negara

Malaysia

(BNM)

Banks

Deposit-Taking

Institutions

Money Services

Business

Insurer

(Great Eastern)

Collaboration

* Full list in 1st schedule of AMLA

2001.

Competent Authority

appointed oversee the

enforcement of AMLA 2001

AMLA 2001 & the Governing Guideline

Governing Legislation and Regulation



Defined as an illegal activity which is related, directly or indirectly to ML/TF: any of the serious offences specified in the Second Schedule of

AMLA 2001. An attempt to commit any of those offences, or Abetment of any of those offences.

The AMLA 2001 covers serious offences committed in Malaysia and offence committed in a foreign country which would also constitute a serious offence in Malaysia. The serious offences are as set out in the 2nd schedule of AMLA 2001, taken from 42 legislations.

What is a Serious Offence?



2nd Schedule of AMLA 2001:

What is Serious Offence?

Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. International Trade in Endangered Species Act 2008.

Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007. Islamic Financial Services Act 2013.

Betting Act 1953. Kidnapping Act 1961.

Capital Markets and Services Act 2007. Kootu Funds (Prohibition) Act 1971.

Child Act 2001. Labuan Financial Services and Securities Act 2010.

Common Gaming House Act 1953. Labuan Islamic Financial Services and Securities Act 2010.

Companies Act 1965. Malaysia Anti-Corruption Commission Act 2009.

Control of Supplies Act 1961. Malaysia Palm Oil Board (Licensing) Regulations 2005.

Control of Supplies Regulations 1974. Malaysian Timber Industry Board (Incorporation) Act 1973.

Copyright Act 1987. Moneylenders Act 1951.

Corrosive and Explosive Substances and Offensive Weapons Act 1958. Money Services Business Act 2011.

Customs Act 1967. Optical Discs Act 2000.

Dangerous Drugs Act 1952. Pawnbrokers Act 1972.

Dangerous Drugs (Forfeiture of Property) Act 1988. Penal Code.

Development Financial Institutions Act 2002. Sales Tax Act 1972.

Direct Sales and Anti-Pyramid Scheme Act 1993. Service Tax Act 1975.

Excise Act 1976. Strategic Trade 2010.

Explosives Act 1957. Strategic Trade (United Security Council Resolutions) Regulations 2010.

Financial Services Act 2013. Trade Descriptions Act 2011.

Firearms (Increased Penalties) Act 1971. Wildlife Conservation Act 2010.

Income Tax Act 1967. Malaysian Palm Oil Board Act 1998



Some examples of serious offences include :

Corruption/ bribery.

Smuggling offences.

Trafficking in firearms/ drugs.

Unlawful gambling, deposit taking or investment schemes.

Robbery/ murder/ theft/ extortion/ kidnapping/ abduction.

Infringement of copyright.

Person living on or trading in prostitution.

Criminal breach of trust (CBT)/ cheating/ forgery.

Insider trading/ market manipulation.

Carrying on banking/FI/merchant banking/discount house/ money-broking, insurance, insurance broking, adjusting business, Takaful business without valid license.

What is Serious Offence?



Key Provisions in AMLA 2001

Section 4

Description Implication

Any person who engages in or attempts to engage in, or abets the commission of money laundering, commits an offence

5 times the value of proceeds or RM5 million (whichever is higher), and 15 years imprisonment.

Section 20


The provision overrides any obligation as to secrecy or other restriction on the disclosure of information imposed by any written law or otherwise.

No institution under the law can withheld information of suspected person from investigating officer.




Section 24 – Protection Of Person Reporting


No civil, criminal or disciplinary proceedings shall be brought against a person who discloses or supplies any information unless it is done in bad faith.

Person who aids in the investigation by disclosing or supplying information will be protected by the law.

Section 22


Officer of a Reporting Institution shall take all reasonable steps to ensure compliance with AMLA 2001.

≤ RM1 million or ≤ 3 years imprisonment or both

• in the case of continuing offence, a further fine but < RM3K for each day or part thereof during which the offence continues to be committed.




Section 27


Failure to appear before the examiner ≤ RM3 million or ≤ 5 years imprisonment or both

Section 26


Failure to provide document or information requested by the examiner.

≤ RM3 million or ≤ 5 years imprisonment or both




Section 37 (3) – Failure to Deliver Property, Record, Report Or Document


Failure to provide any property/ record/ report/ document that is required by an investigating officer.

Liable upon conviction ≤ RM3 million or ≤ 5 years imprisonment or both

Section 35 – Tipping Off (Leakage of information)


If you disclose any information to anyone about a proposed investigation.

Liable upon conviction ≤ RM3 million or ≤ 5 years imprisonment or both

* in the case of continuing offence, a further fine but ≤ RM1K for each day during which the offence continues after conviction.




Section 41 – Investigation Officer May Arrest Without Warrant


Investigating officer may arrest without warrant a person whom he reasonably suspects to have committed or to be committing any offence under this Act.

This is not necessary done only by the police but agents from other law enforcement agencies like MACC.

Section 38 – Power To Seize Of Property, Record Or Documents


An investigation officer may seize, take possession of and retain for such duration as he deems necessary, any property, record, report or document produced before him in the course of an examination.

In previous cases, certain records, reports and documents has been requested by IOs from MACC where the original are taken & retain.




Section 86


For penalty that is not expressly

provided for any offences under AMLA

< RM1 million

Section 92


Further empowers BNM to compound

in cases of continuing offence

Compound rate of 50% of the

maximum fine amount



Section 87 – Offence Committed By Any Person In An Official Capacity


Where an offence is committed by a corporation /

association, the director, controller, officer / partner /

person concerned in management is deemed guilty

unless he proves that :

The offence is committed without the consent or

connivance; and

He exercised such diligence to prevent the

commission of the offence as he ought to have

exercised, having regard to the nature of his function

in that capacity and to the circumstances.

For a company like

Great Eastern, the

liable person could be

the Compliance

Officer, Head of

Department and/or

persons responsible

for certain tasks




As Required by BNM’s AML/CFT Guidelines & Group

AML/CFT Policy:

Risk Based Approach Application

Customer Acceptance Standard

Customer Due Diligence Standard

On-Going Monitoring Standard

AML/CFT Training Standard

Record Keeping Practices

Suspicious Transaction Reporting

Combating The Financing Of Terrorism




Customer Acceptance Standard

Reporting Institutions are required to develop policy and procedures to

address the establishment of business relationship with the customer.

The objective is to address different risks posed by each type of customer

through profiling.

Risk profiling – Factors to consider:

the origin of the customers and location of business

background or profile of the customer

nature of the customer’s business

structure of ownership for a corporate customer

any other information suggesting that the customer is of higher risk




Customer Due Diligence Standard – Know Your Customers (KYC) Identification & Verification

Determine the true identity of prospect, to verify and be satisfied that:

Identity of customer is genuine. The Company shall not have any business dealings

with

i. anonymous person or any person using a fictitious name

ii. non-policy holder who does not transact in relation to an insurance policy issued

by the company

iii. financial institutions which do not have adequate controls against criminal

activities or shell banks

iv. any person and entities sanctioned/designated in the Monetary Authority of

Singapore (MAS) & BNM (Anti-terrorism Measures) regulations or other

applicable regulations issued by the relevant authorities.

Insurance/Takaful transaction to be undertaken is legitimate

Verify all parties to the contract – include any underlying principals that

policy/certificate owners are acting on behalf, all joint applicants to the contract,

principal shareholders and directors for group life policies/certificates and to include

verification of beneficiaries if they are not the policy/certificate owners.





Generally, verification should be performed at the point of sale and via face-to-face contact.

Although the ultimate responsibility of CDD remains with the Insurance Company / Takaful

Operator, reliance is placed on agents/intermediaries as first point of contact to perform

Customer Due Diligence (CDD) at point of sale.

Amount of Premium Any amount (effective from 1 January 2014)

On who? Customer, its Beneficial Owner

and Natural Person appointed to

act on a customer’s behalf.

Beneficiary, Payee, Executors/

Administrators of an estate in

relation to death claims and

also to panel hospitals, panel

clinics and service provider

Identification When establishing business

relationship

At the point of nomination and

at the time of payout

Verification *When establishing business

relationship

Latest at the point of payout

Customer Due Diligence Standard – Know Your Customers (KYC)



Current CDD Practices

Information and documents required to perform identification and verification

A.Individual Customers

Obtain at least the following information:

Full name

NRIC / passport number

Permanent and mailing address

Date and place of birth

Nationality

Occupation type

Name of employer & nature of business

To be substantiated / verified against :

NRIC for Malaysians/permanent residents

Passport for foreigners

A copy of the verified documents should be collected by agents/intermediaries and

retained by the insurer/takaful operator regardless of premium/contribution amount

(effective from 1 January 2014)





B. Corporate Customers

Understand the ownership and control structure in order to detect any unusual circumstances

concerning the changes to the company/business structure or ownership.

Furnish the following a copy of the following documents:

1) Memorandum/Article/Certificate of Incorporation/Partnership

2) Identification document of Directors/Shareholders/Partners (Form 24/Form 49,

may be accepted)

3) Board of Directors’/Directors’ Resolution

4) Authorisation for any person to represent the company/business

5) Identification document of authorised person





B. Corporate Customers (cont’d)

To identify the natural person(s) (directors/ shareholders) with equity interest of more than

25%. Where no natural person is identified, to identify relevant natural person who holds the

position of senior management of the corporation.

C. Clubs, Societies and Charities

Furnish the following documents:

relevant constituent documents (or other similar documents).

the identification of the office bearer.

authorisation for any person to represent the club, society or charity.

D. Legal Arrangements

Take reasonable measures to:

Understand the relationship among the relevant parties.

Obtain satisfactory evidence of its legal status the identity of the relevant parties.

The nature of their capacity and duties as trustee or nominee. (in Great Eastern,

we do not deal with Power of Attorney)





Know Your Customer (KYC)

For higher risk customers or in a more suspicious situation, further CDD measure known

as KYC is conducted. This is done through completion of the follow forms, depending on

the threshold of sum assured or annualized premium/contribution:

•Financial Questionnaire 1 – To be filled by agent on customer’s behalf. Details to be

completed includes purpose of insurance/takaful, proposer’s annual earned & unearned

income, and declaration of networth.

•Financial Questionnaire 2 – To be filled by customer. Details to be completed

includes, purpose of insurance/takaful, proposer’s annual earned & unearned income,

percentage of in company share (for company directors only), and relationship to life

assured/person covered (if different).





Customer Due Diligence Standard – ECDD

Enhanced Customer Due Diligence (ECDD)

The Company shall conduct enhanced due diligence on higher risk customers or

when establishing a business relationship with customers:

Whom are suspected of money laundering or financing of terrorism

Where there are doubts about the reliability or adequacy of previously

obtained information

An ECDD will include the following measures:

Obtaining more detailed information on the customer and through publicly available information, in particular, on the purpose of the transaction and source of funds and

Obtaining approval from the Senior Management before establishing any business relationship with the customer.

* Unwillingness of customer to cooperate may itself be a factor of suspicion. It is

the Company’s policy that underwriters shall not underwrite unless sufficient

identification evidence is provided.




POLITICALLY EXPOSED PERSON (PEP)

PEPs are foreign / domestic individuals being, or who have been, entrusted with prominent

public functions. E.g. heads of state or government, senior politicians, senior government

officials, judicial or military officials and senior executives of public organisations

The concern placed in dealing with PEPs lies with the possibility of such PEPs abusing their

public powers for their own illicit enrichment, especially in countries where corruption is

widespread

Agents are to inform/ disclose to the Company if the current or new customers are PEPs or

related to PEPs in the proposal form/agent’s confidential report

Company is required to take appropriate measures to establish the source of wealth and

source of funds of such person


Customer Due Diligence Standard – ECDD



AML/CFT Training Standard sets out the requirement for the Training & Awareness

Programme

Minimum training requirement includes:

New employees and agents. It is compulsory for all agents to undergo AML/CFT

Training within 2 years of joining the Company.

The Board of Directors and Senior Management team to ensure that there is

adequate training provided including promoting staff awareness on individual

AML/CFT obligations and penalties if they failed to discharge their duties properly

under the Act.

Refresher course will also be made available on regular basis for all staff (including

agents) who have attended the initial training.

Training Standard




Record Keeping Practices

• Records should be kept for a period of NOT LESS THAN 6 years from the

date an account has been closed or transaction has been completed or

terminated.

• Scope of record keeping extended to include accounts, business

correspondence and documents relating to an account, business

relationship, transaction or activity with a customer as well as result of any

analysis taken.

• Failing to comply, a fine of up to RM3 million or imprisonment to a term not

exceeding 5 years would be imposed.

• Agents are encouraged to inform the Company to update the customer’s

records when there are changes/updates in the customers’ personal

information including but not limited to their NRIC/passport number,

nationality, occupation/employment and nature of business.




Recognizing & Reporting Suspicious Transactions on ML/TF

(Section 14)

What is Suspicion? Subjective and there is no specific provision or definition in AMLA.

With effect from 9/3/2007, Reporting Institutions are also required to report any

ATTEMPTED transaction(s) that are suspicious (apart from reporting the completed transaction(s) that are suspicious).

Suspicious Transaction? What to Look Out For?

1. Transactions That Do Not Make Economic Sense

• Transactions in which the nature, size or frequency appears unusual.

• Transactions which are incompatible with the customer’s normal activity or beyond

the customer’s financial means.




2. Transactions Involving Unusual receipts or payment of funds

• Transactions whereby large or unusual premium/contribution payment in cash

is received from customer.

• Transactions which funds are paid or received through unrelated third party.

3. Others

• Abnormal patterns of top-ups and withdrawals for investment linked

policies/certificates.

Recognizing & Reporting Suspicious Transactions (Section 14)




Request for refund to be paid to unrelated 3rd party.

Change payment mode when requested to complete financial questionnaire.

Use of funds from 3rd

party (seemingly related) for Investment Linked top-up

and subsequently early cancellation/withdrawal.

Series of application of policy loans and repayments within a short time

period.

Unrealistic wealth compared with customer’s financial profile.

Staggered policies/certificate surrender (with small amount of surrender value

per policy/certificate, cumulatively, the surrender amount are huge) within

several months, with reason not satisfied with agent's services, which could

have been done in one occasion.

Large sum of cash premium/contribution payment.

Suspicious Cases – Modus Operandi



Reporting Suspicious Transaction

BANK NEGARA MALAYSIA

Financial Intelligence Unit (FIU)

COMPLIANCE DEPARTMENT

Financial Crime Intervention Unit

KEY OPERATING DEPTS,

AGENTS & OTHER INTERMEDIARIES

Head Office or Branch Offices

In the event of any suspicious transactions detected, it is important to escalate to Compliance within 2 working days via the following communication channels:-

Email:

GELM/OACM: [email protected]

GETB : [email protected]

Fax: 03-48133798

Mail :

GELM & OACM

Compliance Dept, Level 10

Menara Great Eastern,

No. 303, Jalan Ampang,

50450 Kuala Lumpur.


GETB

Compliance Dept, Level 3

Menara Great Eastern,

No. 303, Jalan Ampang,

50450 Kuala Lumpur.


mailto:[email protected]







Sanction is a restriction or prohibition, imposed by one country or

group of countries forming an alliance (“sanctioning party”) to another

country, region, entity, vessel or an individual (“the sanctioned party”),

that is intended to coerce certain behaviours on the part of, or to

achieve a certain result with respect to, the sanctioned party.

There are various types of sanctions:

• Diplomatic

• Military

• Sports

• Trade

• Economic/Financial

Sanctions Compliance



Diminishing the power and influence of regimes considered to be a

security threat or oppressive to their subjects

Cutting off international criminals, such as narcotics traffickers and

terrorists from the financial system

Preventing the proliferation of weapons of mass destruction

Economic/financial/trade sanctions aim to achieve domestic and

foreign policy goals set by national governments and international

bodies, including:




• “Sanctioned Countries” refer to the countries which are subjected to a

comprehensive sanction program by the sanctioning party. Comprehensive

sanction generally prohibits all direct or indirect imports/exports, trade brokering,

financing or facilitating against most goods, technology and services.

• Currently, the following are deemed to be Sanctioned Countries (in line with

OCBC):

- Cuba;

- Crimea Region of Ukraine;

- Iran;

- Sudan;

- Democratic People’s Republic of Korea

(North Korea); and

- Syria

• “Sanctioned Person” refers to an individual or entity which is being sanctioned

by the sanctioning party, including the family members and close associates of

such individual or entity.




Sanctioning Countries & Bodies

Apart from sanctions of United Nation Security Council (“UNSC”) which are

relating to terrorist financing and proliferation financing, sanctions from the

following countries and bodies shall also be observed and adhered to:

1. Bank Negara Malaysia (BNM) of any other relevant Malaysia government

agencies

2. Monetary Authority of Singapore (“MAS”) or any other relevant Singapore

government agencies

3. Office of Foreign Assets Control (“OFAC”) under US Treasury

4. European Union (“EU”)




Sanctioning Countries & Bodies - Why OFAC and EU?

Although we may not be considered as “US Person” or “EU Member”, sanctions

imposed by OFAC and EU may apply extra-territorially and could have a bearing on

reputation and operations of Great Eastern if we are found violating the sanctions

either directly or indirectly.

Having said that, our parent company, OCBC, has operations in US, and any violation

by Great Eastern may have an adverse impact on OCBC. Furthermore, any

transaction that involves US dollars is by default subject to US jurisdiction as all US

dollar transactions must be cleared through the United States.

Therefore, we will not tolerate the use of our company for the conduct of criminal and

illicit activities.

The extra-territorial reach of sanctions from these bodies, e.g. OFAC or US

Government Agencies can be noticed from the various fines imposed on non-US

Banks.




Sanctions Risk

Risk of violating financial and economic sanctions either directly or indirectly which

could have adverse impact to the company, including monetary fines, revocation of

business licence and designation as sanctioned entity.

Sanctions imposed by Malaysian government, Singapore government and

international bodies on certain countries, individuals or entities may expose a Great

Eastern Entity, the Great Eastern Group or even OCBC Group to sanctions risks if

we establish business relations with such countries, individuals or entities. [Direct]

In addition, individuals or entities whose activities contravene sanctions, embargoes

or similar measures imposed by Malaysian government, Singapore government and

international bodies may also expose a Great Eastern Entity, the Great Eastern

Group or even OCBC Group to sanctions risks if business relations are established

with such individuals or entities. [Indirect]




Customers who are designated as terrorist or sanctioned by/under: UNSC; OFAC; EU; any other specified

terrorist or sanction list(s) as prescribed by BNM/MAS or the relevant local regulators. This would include

customers who are related or close associates (“RCA”) of the above persons. These are termed as “Designated

Persons”.

Natural customers, without valid residence status or permit issued by the government or authorities of the

host country of that GE Entity, who are from countries sanctioned by: UNSC; OFAC; EU; any other specified

sanction list(s) as prescribed by BNM/ MAS or the relevant local regulators.

Non-natural customers, not included under general licenses or exceptions, who are incorporated in

countries sanctioned by: UNSC; OFAC; EU; or any other specified sanction list(s) as prescribed by BNM/MAS

or the relevant local regulators.

Customers who are not from sanctioned countries but associated with parties who are sanctioned or from

sanctioned countries whose activities contravene sanctions, embargoes and similar measures imposed by:

UNSC; OFAC; EU; or any other specified sanction list(s) as prescribed by BNM/MAS or the relevant local

regulators

Sanction Compliance Program

Great Eastern Entity is not allowed to establish business relationship or have

any business dealings with the following sanctioned person. (Category A):




Financial

Institution Provision of

financial services

Financial

Institution

Terrorists or

Sanctioned Persons

Provision of

financial services Terrorists or

Sanctioned Persons Clean

customers

Business

ties

Sanctions - Illustrations


http://www.google.com.my/imgres?imgurl=http://www.ibom.biz/images/bank-building-icon.jpg&imgrefurl=http://www.ibom.biz/items.aspx&usg=__MQmNeoBhG6XzbB5Psp2feU9pibw=&h=1024&w=1280&sz=141&hl=en&start=6&zoom=1&tbnid=VZNTeMC-RI-D2M:&tbnh=120&tbnw=150&ei=alptUPNBhMutB-WLgNgC&prev=/images?q=bank&hl=en&gbv=2&tbm=isch&itbs=1

http://www.google.com.my/imgres?imgurl=http://www.ibom.biz/images/bank-building-icon.jpg&imgrefurl=http://www.ibom.biz/items.aspx&usg=__MQmNeoBhG6XzbB5Psp2feU9pibw=&h=1024&w=1280&sz=141&hl=en&start=6&zoom=1&tbnid=VZNTeMC-RI-D2M:&tbnh=120&tbnw=150&ei=alptUPNBhMutB-WLgNgC&prev=/images?q=bank&hl=en&gbv=2&tbm=isch&itbs=1


Breaching of US Sanctions

FINANCIAL INSTITUTION DATE OF FINE /

SETTLEMENT

FINE / SETTLEMENT

AMOUNT

VIOLATION

ABN AMRO May 2010 USD 673.5 Million Wire transfers violating Cuba, Iran, Libya, Sudan

sanctions

Barclays Bank

Aug 2010

USD 298 Million

Wire transfers violating Iran, Cuba, Sudan, Myanmar

sanctions

JP Morgan Chase Bank Aug 2011 USD 88.3 Million Wire transfers and gold bullion trades violating Iran,

Cuba, Sudan, Myanmar, WMD sanctions

ING Bank N.V. June 2012 USD 619 Million Wire transfers, Letters of credit violating Iran, Cuba,

Sudan, Myanmar sanctions

Standard Chartered Bank,

NY

Aug & Dec 2012 USD 667 Million Wire transfers, falsifying books and reports violating

Iran sanctions

HSBC Holdings Plc Dec 2012 USD 1.92 Billion Accusations that the bank transferred billions of

dollars for nations like Iran and enabled Mexican drug

cartels to move money illegally through its American

subsidiaries.

BNP Paribas July 2014 USD 9 Billion Allegedly breaking US Sanctions against trade with

Sudan, Iran and Cuba. Engaged in a complex and

pervasive scheme to illegally move billions through

US financial system.

Standard Chartered Bank,

NY

August 2014 USD300 Million Further penalty imposed for failing to tackle

compliance problems following the fine in 2012 .

Pricewaterhouse Coopers August 2014 USD25 Million and

suspended from some

consulting works.

Improperly altered a report on a Japanese bank’s

compliance with anti-money laundering laws.



Group AML/CFT Policy

It is Great Eastern’s policy that we comply with the relevant requirements under

sanctions imposed by the following jurisdictions:

a) Monetary Authority of Singapore (“MAS”) or any other relevant Singapore

government agencies

b) Government or monetary authorities of the host countries where Great Eastern

operates in

c) United Nation Security Council (“UNSC”)

d) Office of Foreign Assets Control (“OFAC”) under US Treasury

e) European Union (“EU”)

• The above is in line with OCBC’s Sanctions Policy.

• Sanctioned persons shall be detected on a timely manner and there shall be no

business dealing with them.

Economic Sanctions

Other Developments on AML



The Financial Action Task Force (FATF) (established in 1989) is an inter-

governmental body whose purpose is the development and promotion of

policies, both at national and international levels, to combat money laundering

and terrorist financing.

The Task Force is therefore a "policy-making body" which works to generate

the necessary political will to bring about national legislative and regulatory

reforms in these areas.

The FATF monitors members' progress in implementing necessary measures,

reviews money laundering and terrorist financing techniques and counter-

measures, and promotes the adoption and implementation of appropriate

measures globally.

AML WORLD BODY (FATF & APG)




Malaysia is a member of FATF and a member of Asia Pacific Group (APG) on money laundering. APG plays similar role as FATF but at a regional level.

FATF has established and revised 40 recommendations in 1996 for combating AML worldwide.

It has further introduced 9 special recommendations in 2001 to address financing of terrorism activities following Sept 11 incident.

In Feb 2012, FATF has revised its recommendations to 40 recommendations, to strengthen global safeguard and further protect the integrity of the financial system.

AML WORLD BODY (FATF & APG)




Need to be more vigilant.

Know the customer well.

Report to Compliance Secretariat if you

suspect or have reason to suspect that

transaction or attempted transaction

involved proceeds from an unlawful

activity or the customer is involved in

money laundering or financing of

terrorism.

What is Your Responsibility



All rights reserved. No part of this publication may be produced ,translated, stored in a retrieval system or transmitted in any form

or by any means, electronic, mechanical, photocopying and recording without the prior written permission of the copyright the

developer and owner.
