Bank Negara Malaysia issues anti-money laundering policy on non face-to-face verification processes by money services businesses
29 July 2021
On 30 June 2021, Bank Negara Malaysia (“BNM”) issued a policy document setting out the minimum requirements and standards that an approved money services business (“MSB”) licensed under the Money Services Business Act 2011 (“MSBA”) must observe in implementing non face-to-face (“non-FTF”) verification processes when on-boarding corporate customers (“Policy Document”). The requirements are aimed at ensuring that effective and robust anti-money laundering and countering financing of terrorism (“AML/CFT”) control measures are in place to safeguard the safety and integrity of money services.
The Policy Document provides that reporting institutions must, among other things:
- obtain prior written approval from BNM to implement non-FTF for the provision of online or mobile remittance and money-changing business for their corporate customers;
- ensure and be able to demonstrate on a continuing basis that appropriate measures for identification and verification of the corporate customer’s identity are as effective as that of face-to-face process;
- take all necessary measures to identify and verify a corporate customer’s identity such as:
- carrying out a mandatory verification method by way of making unannounced video calls to the CEO, directors, or authorised person assigned to the corporate customer;
- carrying out at least one additional verification method that is relevant to the nature or business model of the corporate customers such as verifying the corporate customer’s information against a database maintained by credible independent sources; and
- based on their own risk assessment, clearly define parameters for higher risk corporate customers that are not allowed to transact with the reporting institutions through non-FTF on-boarding process.
The Policy Document is applicable to reporting institutions licensed under the MSBA which carry on remittance and money-changing businesses using non-FTF on-boarding verification process for corporate customers.