Financial Crimes

The Application of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001

Q1. Does the AMLATFPUAA have retrospective effect?

Answer

Yes. The AMLATFPUAA has retrospective effect.

Section 2(1) of the AMLATFPUAA provides that:

“This Act shall apply to any serious offence, foreign serious offence or unlawful activity whether committed before or after the commencement date.”

This means that the Act applies not only to serious offences, foreign serious offences and unlawful activities committed after the Act came into force, but also to those committed before its commencement.

Accordingly, the Act permits the authorities to investigate, trace, freeze, seize and forfeit proceeds derived from unlawful activities committed before the AMLATFPUAA came into operation.

However, the retrospective application primarily concerns the proceeds of unlawful activities and the money laundering process, rather than retrospectively criminalising conduct that was not an offence at the time it was committed.

Case Example

In 1999, Mr A obtained RM8 million through large-scale fraud. In 2004, he transferred the money through several bank accounts and invested it in luxury properties to conceal its criminal origin.

Application

Although the fraud occurred before the AMLATFPUAA came into force, the authorities may rely on section 2(1) to investigate and recover the proceeds of unlawful activities. Mr A’s subsequent dealings with the illicit proceeds may also constitute money laundering under the Act.

Q2. Does the AMLATFPUAA have extra-territorial effect?

Answer

Yes. The AMLATFPUAA also has extra-territorial effect.

The Act extends beyond offences committed solely within Malaysia and applies to foreign serious offences as recognised under the Act.

This enables Malaysian authorities to take action where proceeds of unlawful activities originating from offences committed outside Malaysia are brought into or dealt with within Malaysia.

The extra-territorial application of the Act is further supported by international cooperation mechanisms under the Mutual Assistance in Criminal Matters Act 2002 (MACMA), which facilitate the tracing, recovery and confiscation of criminal assets across jurisdictions.

Case Example

A businessman commits a serious fraud in Country X and transfers the proceeds into Malaysian bank accounts before purchasing luxury condominiums in Kuala Lumpur.

Application

Although the underlying serious offence was committed outside Malaysia, the proceeds are brought into Malaysia. The AMLATFPUAA empowers the Malaysian authorities to investigate, freeze, seize and seek forfeiture of those assets, subject to the requirements of the Act.

Exam Note

The AMLATFPUAA has two important applications:

• Retrospective effect – applies to serious offences, foreign serious offences and unlawful activities committed before or after the commencement of the Act (s. 2(1)).
• Extra-territorial effect – applies to foreign serious offences and enables action against proceeds of unlawful activities connected with offences committed outside Malaysia.

These features ensure that offenders cannot avoid liability simply because the underlying offence occurred before the Act came into force or outside Malaysia.