- Published on
Financial Crimes
Section 4(1)(c) of the AMLATFPUAA
Q. What does section 4(1)(c) of the AMLATFPUAA provide?
Answer
Section 4(1)(c) provides that a person commits a money laundering offence if he or she:
“removes from or brings into Malaysia, proceeds of an unlawful activity or instrumentalities of an offence.”
This provision specifically criminalises the cross-border movement of criminal property.
Unlike section 4(1)(a), which focuses on transactions, and section 4(1)(b), which focuses on dealing with criminal property, section 4(1)(c) targets the physical movement of proceeds of unlawful activities or instrumentalities of an offence into or out of Malaysia.
Its objective is to prevent criminals from exploiting international borders to conceal criminal proceeds or relocate the tools used to commit serious offences.
Q. What are the essential elements of section 4(1)(c)?
Answer
To establish an offence under section 4(1)(c), the prosecution must prove that:
- the accused removed property from Malaysia or brought property into Malaysia; and
- the property was:
- proceeds of unlawful activities; or
- instrumentalities of an offence.
Unlike section 4(1)(a), there is no requirement to prove that the movement occurred through a transaction.
Likewise, unlike section 4(1)(b), the focus is not on whether the accused acquired, possessed or used the property, but rather on the fact that the property crossed Malaysia’s borders.
Q. What is meant by “removes from Malaysia”?
Answer
“Removes from Malaysia” refers to taking or transporting proceeds of unlawful activities or instrumentalities of an offence out of Malaysia into another country.
The property may include:
- cash;
- precious metals;
- jewellery;
- vehicles;
- machinery;
- valuable goods; or
- any other criminal property.
The offence is complete once the criminal property is removed from Malaysia.
Case Example
A corrupt public officer secretly transports RM3 million in cash obtained from bribery from Kuala Lumpur to Singapore.
Application
The RM3 million constitutes proceeds of unlawful activities. By taking the money out of Malaysia, the public officer has removed proceeds of unlawful activities from Malaysia, thereby falling within section 4(1)(c).
Q. What is meant by “brings into Malaysia”?
Answer
“Brings into Malaysia” refers to bringing proceeds of unlawful activities or instrumentalities of an offence from another country into Malaysia.
The provision applies regardless of whether the underlying serious offence occurred in Malaysia or overseas.
Case Example
A drug trafficking syndicate transports RM2 million earned from overseas drug sales into Malaysia to invest in local businesses.
Application
The RM2 million constitutes proceeds of unlawful activities. Bringing the money into Malaysia falls within section 4(1)(c).
Q. Can section 4(1)(c) apply to instrumentalities of an offence?
Answer
Yes.
Section 4(1)(c) applies equally to instrumentalities of an offence.
If property used, or intended to be used, to commit or facilitate a serious offence is moved into or out of Malaysia, the provision may apply.
Case Example 1
A criminal syndicate imports specialised machines into Malaysia to manufacture counterfeit currency.
Application
The machines are instrumentalities of an offence because they are intended to facilitate counterfeiting. Bringing them into Malaysia falls within section 4(1)(c).
Case Example 2
A drug trafficking syndicate exports a speedboat previously used to smuggle drugs from Malaysia to Indonesia.
Application
The speedboat is an instrumentality of an offence. Removing it from Malaysia falls within section 4(1)(c).
Q. How does section 4(1)(c) differ from sections 4(1)(a) and 4(1)(b)?
Answer
Although all three provisions deal with criminal property, each criminalises a different type of conduct.
Section 4(1)(a) focuses on transactions involving proceeds of unlawful activities or instrumentalities of an offence.
Examples include:
- purchasing property;
- selling property;
- investing criminal proceeds;
- depositing money into a bank account; and
- transferring funds through the banking system.
The emphasis is on the transaction itself.
Section 4(1)(b) focuses on dealing with criminal property.
Examples include:
- acquiring;
- receiving;
- possessing;
- disguising;
- transferring;
- converting;
- exchanging;
- carrying;
- disposing of; and
- using,
proceeds of unlawful activities or instrumentalities of an offence.
The emphasis is on the accused’s conduct in handling the property.
Section 4(1)(c) focuses exclusively on the international movement of criminal property.
Examples include:
- taking illicit cash out of Malaysia;
- bringing criminal proceeds into Malaysia;
- exporting vehicles used for drug trafficking; or
- importing equipment intended for counterfeiting.
The emphasis is on cross-border movement rather than transactions or possession.
Illustration
A public officer receives RM8 million in bribes.
He:
- deposits the money into a Malaysian bank account;
- transfers RM5 million to an offshore account;
- physically carries RM1 million in cash to Singapore; and
- later brings RM500,000 back into Malaysia to purchase a commercial building.
Application
Section 4(1)(a) applies because the accused:
- deposited the money;
- transferred funds overseas; and
- purchased the commercial building.
These are transactions involving proceeds of unlawful activities.
Section 4(1)(b) applies because the accused:
- received;
- possessed;
- transferred;
- carried; and
- used,
the proceeds of unlawful activities.
Section 4(1)(c) applies because the accused:
- removed RM1 million from Malaysia; and
- subsequently brought RM500,000 back into Malaysia.
These acts involve the cross-border movement of proceeds of unlawful activities.
Accordingly, all three paragraphs may arise from the same course of conduct, with each paragraph addressing a different aspect of the accused’s conduct.
Exam Note
Section 4(1)(a) – Transaction-Based Offence
- Focuses on transactions involving proceeds of unlawful activities or instrumentalities of an offence.
- Ask:
- Did the accused engage, directly or indirectly, in a transaction involving the criminal property?
- Examples:
- depositing money;
- purchasing property;
- investing criminal proceeds;
- selling assets.
Section 4(1)(b) – Property-Based Offence
- Focuses on how the accused dealt with the criminal property.
- Ask:
- What did the accused do with the proceeds or instrumentality?
- Covers:
- acquiring;
- receiving;
- possessing;
- disguising;
- transferring;
- converting;
- exchanging;
- carrying;
- disposing of; and
- using.
Section 4(1)(c) – Cross-Border Movement Offence
- Focuses on the international movement of criminal property.
- Ask:
- Did the accused remove the criminal property from Malaysia or bring it into Malaysia?
- It is immaterial whether the property consists of:
- proceeds of unlawful activities; or
- instrumentalities of an offence.
Memory Aid
Think of the three provisions as addressing different aspects of the same criminal property:
- Section 4(1)(a) → Transaction.
- Section 4(1)(b) → Dealing with the property.
- Section 4(1)(c) → Cross-border movement.
Together, they ensure that the AMLATFPUAA captures transactions, possession and other dealings, and the international movement of both proceeds of unlawful activities and instrumentalities of an offence.
