- CDD = Customer Due Diligence
- EDD = Enhanced Due Diligence
- STR = Suspicious Transaction Reporting
- LP = Legal Person (Sdn Bhd)
- BO = Beneficial Owner (Directors)
Below is extracted from MIEA notification to members.
Hope everyone will go thru the webinar. It shows the struggles by REAs to comply w the AMLCFT guidelines is not unique just to us. It’s a global struggle within the REA community worldwide.
Especially when it comes to clients and customers openly and willingly providing without qualms all their legal docs to lawyers; and not as open to provide the same docs to REAs. Education of our customers shld help.
Hopefully the AMLA sample letters I hv provided for the Compliance Officers (COs) of REA Firms to write in to the customers explaining d need to collect their relevant legal docs help educate the customers and at the same time assist us to comply with the AMLCfT guidelines wrt CDD.
STRs shld be issued by COs if there are any questions regarding the source of funds and the source of wealth, especially in cases of cash payments when purchasing/ renting real estate + in cases where properties are sub-letted by “tenants” without the consent of the Landlords eg to conduct drug manufacturing operations.
In these cases, EDD must be immediately conducted. If gut feelings indicate something isnt right, issue STRs immediately. Remember STRs must be issued without the knowledge of the client or customers (am sure this may violate privacy laws….but it’s all dependent on how yr PDPA policy is phrased I suppose).
Lawyers are legally and beneficially protected by client-privilege laws in Msia. REAs are not protected under such client-privilege relationships. As such the fines and penalties from BNM fir not complying to the AML CFT guidelines are real (and painful).
BNM and the FATF rely on the STRs issued by COs to deprive criminals of their dirty money. How do they do this?
There are MANY players (REAs, lawyers, banks, financial institutions, etc) in a RE transaction (sale, rental, lease etc)….if ALL the players for the SAME transaction issue STRs for the SAME CUSTOMER or client, BNM will act. Becos the SAME individual or company has caused the COs of the different players in a RE transaction to be suspicious of the SAME transaction. I don’t know abt u, but I hv always wondered abt the STRs requested by to BNM.
Hope this helps to summarize the webinar in a nutshell.
It has helped my understanding of the need to do CDD and EDD. I hope it will help you as well. We are STUCK with having to comply with the AMLCFT guidelines.