Money Laundering – What Acts Constitute Money Laundering under Section 4 AMLA?

Q1. What acts constitute money laundering under Section 4 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA)?

Answer

Section 4 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA) provides that money laundering is not limited to concealing criminal proceeds. It covers a wide range of dealings with property that represents the proceeds of unlawful activity.

The prohibited acts include:

• Acquiring criminal proceeds.
• Receiving criminal proceeds.
• Possessing criminal proceeds.
• Using criminal proceeds.
• Transferring criminal proceeds.
• Converting criminal proceeds into another asset.
• Exchanging criminal proceeds.
• Moving or disposing of criminal proceeds.
• Disguising or concealing:
• the source,
• origin,
• nature,
• ownership,
• movement,
• location, or
• rights relating to the property.
• Assisting another person to deal with criminal proceeds.

Q2. What is meant by acquiring criminal proceeds?

Answer

Acquiring criminal proceeds means obtaining ownership or control of property that represents the proceeds of unlawful activity, knowing or having reason to believe that the property is derived from crime.

Examples

Example 1

Ali purchases a luxury watch using RM80,000 obtained from drug trafficking.

Why?

Ali has acquired a new asset using criminal proceeds.

Example 2

A fraudster purchases a condominium using money obtained through an online scam.

Why?

The criminal proceeds have been converted into real property.

Example 3

A corrupt public officer purchases company shares using bribe money.

Why?

The illegal money has been used to acquire another asset.

Q3. What is meant by receiving criminal proceeds?

Answer

Receiving criminal proceeds means accepting money or property that represents the proceeds of unlawful activity, while knowing or having reason to believe its criminal origin.

Examples

Example 1

A friend receives RM500,000 from a drug trafficker and agrees to keep it.

Example 2

A person knowingly accepts a luxury car purchased with corruption proceeds as a gift.

Example 3

A company director knowingly receives criminal money into the company’s bank account.

Q4. What is meant by possessing criminal proceeds?

Answer

Possessing criminal proceeds means having custody, control or possession of property that represents criminal proceeds, even if the person does not spend it.

Examples

Example 1

Keeping RM2 million of stolen cash inside a home safe.

Example 2

Keeping gold bars purchased with drug money in a private vault.

Example 3

Holding cryptocurrency known to have been purchased using proceeds of fraud.

Q5. What is meant by using criminal proceeds?

Answer

Using criminal proceeds means spending or utilising property derived from unlawful activity.

Examples

Example 1

Using scam proceeds to purchase an iPhone.

Example 2

Paying school fees using money obtained through corruption.

Example 3

Using illegal gambling proceeds to pay for an overseas holiday.

Q6. What is meant by transferring criminal proceeds?

Answer

Transferring criminal proceeds means moving criminal property from one person, account or place to another.

Examples

Example 1

Transferring RM500,000 from a personal account into a family member’s account.

Example 2

Sending criminal proceeds to an overseas bank account.

Example 3

Moving cryptocurrency between multiple digital wallets.

Q7. What is meant by converting criminal proceeds into another asset?

Answer

Converting criminal proceeds means changing the form of criminal property into another asset.

Examples

Example 1

Using RM2 million obtained from fraud to purchase a bungalow.

Example 2

Buying gold bars using proceeds from drug trafficking.

Example 3

Using criminal proceeds to purchase company shares.

Q8. What is meant by exchanging criminal proceeds?

Answer

Exchanging criminal proceeds means swapping criminal property for another form of property or value.

Examples

Example 1

Exchanging stolen cash for cryptocurrency.

Example 2

Converting criminal proceeds from Malaysian Ringgit into US Dollars.

Example 3

Trading gold purchased with criminal proceeds for diamonds.

Q9. What is meant by moving or disposing of criminal proceeds?

Answer

Moving or disposing of criminal proceeds means relocating, transferring, selling or otherwise dealing with criminal property to distance it from the original crime.

Examples

Example 1

Transporting RM3 million cash across the border.

Example 2

Selling a luxury car purchased with criminal proceeds.

Example 3

Giving criminal proceeds to another person for safekeeping.

Q10. What is meant by disguising or concealing criminal proceeds?

Answer

Disguising or concealing means hiding the true source, origin, ownership, movement, location or nature of criminal proceeds so that they appear legitimate.

Examples

Example 1 – Concealing the Source

A fraudster records RM1 million obtained from fraud as “consultancy income.”

Why?

The true source (fraud) is concealed behind fake business income.

Example 2 – Concealing Ownership

A criminal purchases a luxury apartment but registers it under his brother’s name.

Why?

The true beneficial owner is hidden.

Example 3 – Concealing Movement

Money is transferred through five different companies in three different countries before reaching its final destination.

Why?

The multiple transfers make it more difficult for investigators to trace the movement of the criminal proceeds.

Q11. What is meant by assisting another person to deal with criminal proceeds?

Answer

A person commits money laundering if he knowingly assists another person in acquiring, receiving, transferring, concealing or otherwise dealing with criminal proceeds.

Examples

Example 1

An accountant knowingly prepares false financial statements to disguise criminal proceeds as business income.

Example 2

A lawyer knowingly establishes shell companies to conceal the ownership of criminal assets.

Example 3

A friend allows his personal bank account to be used to receive proceeds obtained through online scams, knowing the money comes from criminal activity.

Key Examination Note

Section 4 AMLA adopts a broad definition of money laundering. Unlike the traditional placement–layering–integration model, Malaysian law does not require proof of all three stages. A person may commit money laundering simply by acquiring, receiving, possessing, using, transferring, converting, exchanging, moving, disguising, concealing, or assisting another person to deal with property that represents the proceeds of unlawful activity, provided the required knowledge or reason to believe is established.

Statutory Reference: Section 4, Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613).