Financial Crimes

Relationship Between Sections 4(1)(b) and 4(1)(d) of the AMLATFPUAA

Q. Both sections 4(1)(b) and 4(1)(d) use the word “disguises”. What is the difference between the two provisions?

Answer

The word “disguises” appears in both section 4(1)(b) and section 4(1)(d). Although the same word is used, it serves a different function in each provision.

At first glance, the two provisions appear to overlap. However, when read in context, each paragraph focuses on a different aspect of money laundering.

Section 4(1)(b) is primarily concerned with dealing with criminal property, whereas section 4(1)(d) is concerned with concealing or obstructing the discovery of the true characteristics of criminal property, such as its origin, ownership or location.

Accordingly, the distinction lies not in the word “disguises” itself, but in what is being disguised.

Q. How does “disguises” operate under section 4(1)(b)?

Answer

Section 4(1)(b) focuses on how the accused deals with proceeds of unlawful activities or instrumentalities of an offence.

The provision lists a series of prohibited acts, including:

• acquiring;
• receiving;
• possessing;
• disguising;
• transferring;
• converting;
• exchanging;
• carrying;
• disposing of; and
• using,

proceeds of unlawful activities or instrumentalities of an offence.

When read together, these acts describe different methods of handling or dealing with criminal property.

Accordingly, the word “disguises” in section 4(1)(b) refers to disguising the property itself as part of dealing with it.

In practice, this may involve changing the appearance, form or presentation of the criminal property so that it becomes more difficult to recognise as proceeds of unlawful activities.

Case Example

A fraudster receives RM2 million obtained through fraud. He converts the cash into cryptocurrency and routes it through several digital wallets before converting it back into cash.

Application

The accused has dealt with the proceeds by converting and transferring them through multiple digital wallets, thereby disguising the criminal property as part of handling it. This conduct falls within section 4(1)(b).

Q. How does “disguises” operate under section 4(1)(d)?

Answer

Section 4(1)(d) serves a different purpose.

Rather than focusing on how the accused deals with the property, it focuses on whether the accused has concealed, disguised or impeded the establishment of the true nature, origin, location, movement, disposition, title, rights with respect to, or ownership of the criminal property.

The object of the disguise is therefore the truth about the property, rather than the property itself.

The emphasis is on preventing investigators or authorities from discovering the real source, ownership or identity of the criminal property.

Case Example

A corrupt public officer purchases a luxury villa using bribe money but registers the property under his brother’s name.

Application

The villa itself has not been altered. However, the accused has disguised the true ownership of the property. This conduct falls squarely within section 4(1)(d).

Q. Can the same conduct fall within both sections 4(1)(b) and 4(1)(d)?

Answer

Yes.

The same conduct may simultaneously satisfy both provisions because each paragraph criminalises a different aspect of the money laundering process.

Case Example

Mr A receives RM10 million in bribes.

He transfers the money to a shell company and records the payments in the company’s accounts as “consultancy fees.”

Application

Under section 4(1)(b), Mr A has dealt with the criminal property by transferring it through a shell company and disguising the proceeds as part of handling the property.

At the same time, section 4(1)(d) also applies because Mr A has disguised the true origin of the money and the true nature of the payments by falsely representing them as legitimate consultancy fees.

Accordingly, the same conduct may constitute offences under both provisions.

Q. What is the relationship between sections 4(1)(b) and 4(1)(d)?

Answer

There is a significant degree of overlap between sections 4(1)(b) and 4(1)(d).

The repetition of the word “disguises” appears to be deliberate rather than accidental. While both provisions may apply to the same facts, they address different legal concerns.

Section 4(1)(b) criminalises dealing with criminal property, one method of which is disguising the property.

Section 4(1)(d) criminalises concealing or disguising the true characteristics of criminal property, including its origin, ownership, location, movement and other identifying attributes.

The overlap enables prosecutors to frame charges that accurately reflect both the accused’s handling of the criminal property and the efforts made to conceal its true identity or provenance.

Exam Note

When distinguishing between sections 4(1)(b) and 4(1)(d), identify what is being disguised.

• Section 4(1)(b) focuses on dealing with the criminal property itself. The accused disguises the property as part of handling, transferring, converting or otherwise dealing with it.
• Section 4(1)(d) focuses on concealing the truth about the criminal property. The accused disguises its true nature, origin, location, movement, disposition, title, rights with respect to or ownership.

Although the same conduct may satisfy both provisions, each paragraph addresses a distinct aspect of money laundering. For this reason, prosecutors may rely on both sections 4(1)(b) and 4(1)(d) where the facts demonstrate both the handling of criminal property and the concealment of its true identity or provenance.