Malaysia overhauls proliferation-financing sanctions directive, binding banks to risk-assessment regime
Malaysia's Strategic Trade Secretariat has reissued its directive on targeted financial sanctions relating to proliferation financing, enforced from 7 June 2024. It binds a broad list of reporting institutions supervised by Bank Negara Malaysia, Labuan FSA and the Securities Commission, and goes beyond list-screening to require a documented PF risk assessment and a counter-proliferation compliance programme. This segment sets out who it covers and what they must now have in place.
- The amended directive was enforced on 7 June 2024 and replaces the version dated 13 April 2018, issued under section 6 of the Strategic Trade Act 2010.
- It is legally binding on the reporting institutions listed in Appendix I, which span banks, insurers, money-services businesses, capital-market intermediaries and designated non-financial businesses.
- Institutions must immediately freeze a confirmed designated person's funds without the prior approval of the Strategic Trade Controller or supervisory authority.
- Positive matches must be reported upon determination, with periodic reporting on changes due by 15 January of the following calendar year.
- Institutions must identify, assess and document their proliferation-financing risks and implement a counter-proliferation financing compliance programme with a compliance officer, training and independent audit.