Financial Crimes

Scope of the Money Laundering Offence Under Section 4(1)

Q. Why is the money laundering offence under section 4(1) considered to be broadly drafted?

Answer

Section 4(1) of the AMLATFPUAA is drafted in very broad terms, thereby giving the provision a wide scope of application.

Rather than criminalising only a single form of money laundering, the section captures a broad range of conduct involving criminal property. A person may commit a money laundering offence by engaging in any one of the acts set out in sections 4(1)(a), (b), (c) or (d).

Accordingly, the prosecution is not required to prove that all four paragraphs have been committed. Proof of any one of the prohibited acts is sufficient to establish the actus reus of a money laundering offence, provided the other elements of the offence are also satisfied.

The comprehensive drafting of section 4(1) ensures that money laundering is not confined to traditional laundering methods but extends to virtually every significant way in which criminal property may be dealt with, moved or concealed.

Q. Can any of the conduct listed in sections 4(1)(a) to (d) constitute a money laundering offence?

Answer

Yes.

Each paragraph under section 4(1) creates an independent basis upon which a person may be liable for money laundering.

A person may commit a money laundering offence by:

• engaging in a transaction involving criminal property under section 4(1)(a);
• acquiring, receiving, possessing, disguising, transferring, converting, exchanging, carrying, disposing of or using criminal property under section 4(1)(b);
• removing criminal property from, or bringing it into, Malaysia under section 4(1)(c); or
• concealing, disguising or impeding the establishment of the true nature, origin, location, movement, disposition, title, rights with respect to or ownership of criminal property under section 4(1)(d).

Each of these acts, standing alone, may constitute a money laundering offence.

Q. What is the common prerequisite for all offences under section 4(1)?

Answer

Although sections 4(1)(a), (b), (c) and (d) criminalise different forms of conduct, they all share a common prerequisite.

In every case, the conduct must involve:

• proceeds of unlawful activities; or
• instrumentalities of an offence.

Without proceeds of unlawful activities or instrumentalities of an offence, none of the four paragraphs can be invoked.

Accordingly, the existence of criminal property is the essential foundation upon which every offence under section 4(1) is built.

Illustration

Mr A lawfully earns RM2 million through his legitimate business.

He:

• deposits the money into several bank accounts;
• transfers it overseas;
• brings part of the money back into Malaysia; and
• purchases property through a nominee company.

Application

Although Mr A’s conduct resembles several acts described in sections 4(1)(a) to (d), no money laundering offence is committed because the money does not constitute proceeds of unlawful activities or instrumentalities of an offence.

Conversely, if the RM2 million were derived from bribery, drug trafficking or another serious offence, the same conduct could potentially constitute money laundering under one or more paragraphs of section 4(1).

Exam Note

When analysing section 4(1), remember the following principles:

• Section 4(1) is intentionally drafted in broad terms to capture a wide range of money laundering activities.
• Each paragraph—sections 4(1)(a), (b), (c) and (d)—creates an independent mode of committing the offence.
• The prosecution need only establish one of the prohibited acts under section 4(1), not all four.
• The indispensable prerequisite for every paragraph is that the property involved must be proceeds of unlawful activities or instrumentalities of an offence. Without criminal property, there can be no money laundering offence under section 4(1).