Financial Crimes

Section 4(1)(b) of the AMLATFPUAA



Q. What conduct is prohibited under section 4(1)(b) of the AMLATFPUAA?

Answer

Section 4(1)(b) provides that a person commits a money laundering offence if he or she:

“acquires, receives, possesses, disguises, transfers, converts, exchanges, carries, disposes of or uses proceeds of an unlawful activity or instrumentalities of an offence.”

The provision is drafted broadly to criminalise almost every form of dealing with criminal property.

Unlike section 4(1)(a), which focuses on engaging in a transaction, section 4(1)(b) targets the various ways a person may deal with proceeds of unlawful activities or instrumentalities of an offence, whether before, during or after a transaction.

The objective is to prevent criminals and third parties from benefiting from, concealing or assisting in the movement of criminal property.

Q. What is meant by each prohibited act under section 4(1)(b)?

Answer

1. Acquires

To acquire means to obtain ownership or control of criminal property, whether by purchase, gift, inheritance or any other means.

Example

Mr A purchases a luxury vehicle knowing it was bought using proceeds of drug trafficking.

2. Receives

To receive means to accept or take possession of criminal property from another person.

Example

Mr B accepts RM100,000 from a fraudster for safekeeping.

3. Possesses

To possess means to have custody or control of criminal property, whether physically or legally.

Possession may be actual or constructive.

Example

A person stores stolen cash in a safe deposit box under his control.

4. Disguises

To disguise means to conceal the true nature, source, ownership or origin of criminal property.

Example

A fraudster purchases jewellery using illicit funds to conceal the origin of the money.

5. Transfers

To transfer means moving criminal property from one person, account or place to another.

Example

Money is transferred from a Malaysian bank account to an offshore account.

6. Converts

To convert means changing criminal property into another form.

Example

Cash obtained from corruption is used to purchase shares or real estate.

7. Exchanges

To exchange means swapping one form of criminal property for another.

Example

Illicit cash is exchanged for foreign currency or cryptocurrency.

8. Carries

To carry means physically transporting criminal property from one location to another.

Example

A courier transports RM2 million in cash across the Malaysian border.

9. Disposes Of

To dispose of means selling, giving away, destroying or otherwise dealing with criminal property so that ownership or control is relinquished.

Example

A person sells a vehicle purchased with proceeds of corruption.

10. Uses

To use means employing criminal property for any purpose or deriving benefit from it.

Example

A person uses money obtained through fraud to pay school fees or business expenses.

Q. Why does section 4(1)(b) list so many different forms of dealing?

Answer

Money laundering can occur at different stages and in many different forms.

Criminals do not merely transfer money. They may:

• receive it;
• keep it;
• move it;
• convert it into other assets;
• spend it;
• conceal it; or
• transfer it to another person.

By listing numerous forms of dealing, section 4(1)(b) ensures that every stage of handling criminal property may amount to money laundering.

This prevents offenders from escaping liability simply because they did not personally conduct a financial transaction.

Case Example

Mr A receives RM3 million obtained from corruption.

He deposits the money into his bank account, converts part of it into cryptocurrency, purchases luxury watches, transfers some funds overseas and uses the remaining money to renovate his house.

Application

Mr A has committed several acts prohibited under section 4(1)(b):

• received the proceeds;
• possessed the proceeds;
• transferred part of the proceeds overseas;
• converted the proceeds into cryptocurrency;
• used the proceeds to renovate his house.

Each act constitutes a separate form of dealing with proceeds of unlawful activities under section 4(1)(b).

Exam Note

A useful way to distinguish section 4(1)(a) and section 4(1)(b) is:

• Section 4(1)(a) focuses on engaging in a transaction involving proceeds of unlawful activities or instrumentalities of an offence.
• Section 4(1)(b) focuses on the various forms of dealing with those proceeds or instrumentalities, such as acquiring, possessing, transferring, converting or using them.

Both provisions are drafted broadly to ensure that virtually every form of involvement with criminal property connected to a serious offence can constitute money laundering under the AMLATFPUAA.