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Financial Crimes
Money Laundering Offences
Q1. Where is the primary money laundering offence found under the AMLATFPUAA?
Answer
The primary money laundering offence is found in section 4(1) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA).
Section 4(1) creates the principal offence of money laundering by criminalising various dealings with proceeds of unlawful activities or instrumentalities of an offence.
The provision is broadly drafted to capture a wide range of conduct designed to conceal, transfer or utilise criminal proceeds.
Case Example
Mr A receives money derived from corruption and transfers it through several bank accounts before investing it in property.
Application
Mr A’s conduct may amount to money laundering under section 4(1) because he dealt with proceeds of unlawful activities through financial transactions.
Q2. What does section 4(1)(a) of the AMLATFPUAA provide?
Answer
Section 4(1)(a) provides that a person commits a money laundering offence if he or she:
“engages, directly or indirectly, in a transaction that involves proceeds of an unlawful activity or instrumentalities of an offence.”
The provision is intentionally broad.
A person may be liable whether he or she participates directly or indirectly, provided the transaction involves:
- proceeds of unlawful activities; or
- instrumentalities of an offence.
The transaction need not be completed solely by the offender; indirect participation may also attract liability.
Case Example
A businessman knowingly transfers RM2 million derived from drug trafficking from one company account to another before investing the money in shares.
Application
The transfer of funds constitutes a transaction involving proceeds of unlawful activities. Accordingly, the businessman may be liable under section 4(1)(a).
Q3. What is meant by “engages, directly or indirectly, in a transaction”?
Answer
The phrase “engages, directly or indirectly, in a transaction” is intended to capture every form of participation in a transaction involving criminal proceeds.
A person may engage:
- directly, by personally conducting the transaction; or
- indirectly, by assisting, arranging, facilitating or participating through another person or entity.
The broad wording prevents offenders from avoiding liability by using intermediaries, nominees, shell companies or third parties.
Case Example
Mr B instructs his accountant to transfer money obtained from fraud into several overseas bank accounts.
Application
Although the accountant performs the transfers, Mr B indirectly engages in the transactions and may therefore be liable under section 4(1)(a).
Q4. What are “proceeds of unlawful activities”?
Answer
Proceeds of unlawful activities refer to any property, money or assets derived directly or indirectly from an unlawful activity.
The proceeds may include:
- cash;
- bank deposits;
- real property;
- vehicles;
- shares;
- jewellery; or
- any other property obtained or derived from criminal conduct.
The proceeds must originate from an unlawful activity, which in turn is based on the commission of a serious offence under the AMLATFPUAA.
Case Example
A public officer receives RM500,000 in bribes and uses the money to purchase a luxury condominium.
Application
Both the RM500,000 and the condominium constitute proceeds of unlawful activities because they were derived from corruption.
Q5. What are “instrumentalities of an offence”?
Answer
Instrumentalities of an offence are property or assets that are used or intended to be used in the commission of a criminal offence.
Unlike proceeds of unlawful activities, instrumentalities are not the profits of the crime. Instead, they are the means by which the offence is committed or facilitated.
Examples include:
- vehicles used to transport illegal drugs;
- computers used to commit cyber fraud;
- counterfeit printing equipment; or
- bank accounts used to facilitate money laundering transactions.
Case Example
A syndicate uses a van to transport large quantities of dangerous drugs across the country.
Application
The van is an instrumentality of the offence because it was used to facilitate the commission of the crime and may be liable to seizure and forfeiture under the AMLATFPUAA.
Exam Note
For a charge under section 4(1)(a), the prosecution must establish that:
- the accused engaged directly or indirectly in a transaction;
- the transaction involved:
- proceeds of unlawful activities, or
- instrumentalities of an offence; and
- the remaining statutory elements of the offence under section 4(1) are satisfied (including the applicable mental element, discussed separately).
Illustration
- Corruption → Serious offence.
- RM2 million received → Proceeds of unlawful activities.
- Transfer through multiple bank accounts → Transaction.
- Liability under section 4(1)(a) → Possible money laundering offence.
