Financial Crimes

Extra-Territorial Application of the AMLATFPUAA and the Mutual Assistance in Criminal Matters Act 2002 (MACMA)

Q1. Does the extra-territorial application of the AMLATFPUAA operate independently?

Answer

No. Although the AMLATFPUAA has extra-territorial effect, its practical enforcement depends significantly on the Mutual Assistance in Criminal Matters Act 2002 (MACMA).

The AMLATFPUAA empowers Malaysia to deal with foreign serious offences and proceeds of unlawful activities connected with offences committed outside Malaysia. However, where evidence, suspects or assets are located overseas, Malaysia generally requires international cooperation under MACMA to effectively investigate, trace, recover and confiscate criminal assets.

Case Example

A Malaysian businessman launders RM30 million through bank accounts in Singapore and Switzerland.

Application

Although the AMLATFPUAA recognises the foreign serious offence, Malaysian authorities require international assistance under MACMA to obtain banking records, freeze the overseas accounts and recover the criminal proceeds.

Q2. What is the Mutual Assistance in Criminal Matters Act 2002 (MACMA)?

Answer

The Mutual Assistance in Criminal Matters Act 2002 (MACMA) is legislation that facilitates international cooperation in criminal matters.

It enables Malaysia to:

• request assistance from foreign countries; and
• provide assistance to foreign countries,

for the purpose of investigating and prosecuting criminal offences.

Under MACMA, assistance may include:

• tracing criminal property;
• freezing, recovering and confiscating proceeds of crime;
• enforcing foreign forfeiture orders;
• locating witnesses and suspects;
• obtaining evidence; and
• serving legal documents.

MACMA therefore complements the AMLATFPUAA by providing the legal mechanism for cross-border cooperation.

Case Example

The Malaysian Anti-Corruption Commission discovers that bribe money has been transferred to bank accounts in Australia.

Application

MACMA enables Malaysia to seek assistance from Australia in tracing the funds, obtaining banking evidence and recovering the criminal assets.

Q3. What is a Mutual Legal Assistance Treaty (MLAT)?

Answer

A Mutual Legal Assistance Treaty (MLAT) is an international agreement between two or more countries that establishes the legal framework for providing mutual assistance in criminal matters.

An MLAT sets out the procedures and conditions under which countries may cooperate by:

• exchanging evidence;
• tracing criminal proceeds;
• locating suspects or witnesses;
• freezing or confiscating assets; and
• enforcing criminal court orders.

MLATs strengthen international cooperation by ensuring that requests for assistance are recognised and executed in accordance with agreed legal procedures.

Case Example

Malaysia and Country X are parties to an MLAT. Malaysian authorities request Country X to freeze bank accounts containing proceeds of corruption.

Application

The MLAT provides the legal basis for Country X to recognise and execute Malaysia’s request for assistance.

Q4. What is the relationship between AMLATFPUAA, MACMA and an MLAT?

Answer

The three instruments perform different but complementary functions:

• AMLATFPUAA creates the substantive offences of money laundering and provides powers to investigate, freeze, seize and forfeit proceeds of unlawful activities.
• MACMA provides the domestic legal framework through which Malaysia requests or provides international assistance in criminal matters.
• An MLAT provides the international legal basis for cooperation between Malaysia and another country.

Accordingly, the AMLATFPUAA identifies the offence, MACMA provides the procedural mechanism, and the MLAT facilitates international cooperation.

Case Example

A fraudster transfers RM15 million from Malaysia to Canada.

Application

The AMLATFPUAA criminalises the money laundering. MACMA enables Malaysia to request assistance, while the MLAT between Malaysia and Canada provides the legal framework for Canada to execute the request.

Q5. Must Malaysia and the other country be parties to an MLAT before MACMA can be enforced?

Answer

Generally, yes.

it states that effective international cooperation in combating money laundering can only be achieved where there is a Mutual Legal Assistance Treaty (MLAT) between Malaysia and the relevant foreign jurisdiction.

Without such cooperation, Malaysia may face significant legal and practical difficulties in obtaining evidence, tracing assets or enforcing freezing and forfeiture orders abroad.

Accordingly, an MLAT greatly facilitates the operation of MACMA in cross-border investigations.

However, as a matter of Malaysian law, MACMA also contains provisions allowing Malaysia to provide or obtain assistance in certain circumstances even in the absence of an MLAT, subject to the requirements and safeguards in the Act, including reciprocity where applicable. Therefore, while an MLAT is the preferred and most effective basis for cooperation, it is not always an absolute legal prerequisite.

Case Example

Malaysia seeks assistance from Country A, with which it has an MLAT.

Application

Because both countries are parties to an MLAT, Malaysia’s request for banking records and asset freezing can be processed under the agreed treaty procedures.

Q6. Why is extra-territoriality important in combating money laundering?

Answer

Extra-territoriality is essential because money laundering is inherently transnational.

Modern criminals frequently move illicit funds across multiple jurisdictions using international banking systems, shell companies and cross-border investments to conceal the origin of criminal proceeds.

Without extra-territorial jurisdiction and international cooperation, criminals could easily avoid detection by transferring assets outside Malaysia.

Therefore, effective anti-money laundering enforcement depends upon:

• extra-territorial legislation;
• mutual legal assistance;
• international information sharing; and
• cooperation between law enforcement agencies across different jurisdictions.

Case Example

A drug trafficking syndicate earns profits in Malaysia, transfers the funds to Hong Kong, purchases real estate in the United Kingdom and ultimately invests through offshore companies.

Application

Malaysia must cooperate with several foreign jurisdictions through MACMA and applicable MLATs to trace, freeze, seize and ultimately recover the criminal proceeds.

Q7. Is the concept of extra-territoriality new in Malaysian law?

Answer

No. Extra-territorial jurisdiction is not unique to the AMLATFPUAA.

The concept already exists in several Malaysian statutes. For example, section 4(1) of the Penal Code extends Malaysian criminal jurisdiction to certain offences committed:

• by Malaysian citizens or permanent residents on the high seas aboard ships or aircraft; and
• by Malaysian citizens or permanent residents outside Malaysia, as though the offence had been committed within Malaysia.

The AMLATFPUAA adopts a similar approach by recognising foreign serious offences and enabling Malaysia to deal with criminal proceeds connected with offences committed outside Malaysia.

Case Example

A Malaysian citizen commits an offence while working overseas and subsequently returns to Malaysia.

Application

Depending on the relevant legislation, Malaysian courts may exercise jurisdiction over the offence despite it having been committed outside Malaysia.

Exam Note

AMLATFPUAA

• Creates money laundering offences.
• Provides powers to investigate, freeze, seize and forfeit criminal proceeds.

MACMA

• Provides the domestic legal framework for international mutual legal assistance.

MLAT

• An international treaty governing cooperation between Malaysia and another country.
• Facilitates the exchange of evidence, tracing of assets and enforcement of criminal orders.

Relationship

AMLATFPUAA → creates the offence and asset recovery powers.

MACMA → provides the legal procedure for international cooperation.

MLAT → provides the treaty framework that facilitates cooperation between Malaysia and foreign jurisdictions.

Key Examination Point

it correctly emphasises that effective enforcement of the AMLATFPUAA’s extra-territorial provisions depends heavily on international cooperation. While an MLAT is the strongest and most common legal basis for such cooperation, MACMA itself may also permit mutual legal assistance in certain circumstances without a treaty, subject to its statutory requirements.