complying with the anti-money
laundering law in Malaysia
Faculty of Business Management and Professional Studies,
Management and Science University, Shah Alam, Malaysia, and
Faculty of Law, Universiti Teknologi MARA, Shah Alam, Malaysia
Purpose –The purpose of this paperis to provide some empirical ﬁndings on the predicaments of lawyers’
anti-moneylaundering (AML) compliance in Malaysia and the rationalesfor such predicaments.
Design/methodology/approach –This paper adopts a qualitative researchin which the primary data
are obtainedfrom seven case studies involving legal ﬁrms within the KlangValley, Selangor, Malaysia, which
is triangulatedwith the data from the Central Bank and the Malaysian Bar Council.
Findings –The authors contend that despitethe vulnerability of their profession to money laundering,the
level of awareness of theAML obligations amongst Malaysian legal practitionersis rather minimal. Also, the
imposition of obligations upon them in policing their clients and regulating money laundering is not only
onerous but also contraryto the ethics of their profession.
Originality/value –This paper ﬁlls the gapin providing the empiricalevidence on lawyers’compliance to
their statutory AML obligations in Malaysia. Also, this paper could be a useful source of information for
practitioners,academicians and students. It could also bea beneﬁcial guide for policymakers for any possible
future amendmentsto the law.
Keywords Money laundering, Compliance, Vulnerabilities, AML obligations,
Legal professional privilege
Paper type Research paper
As a phenomenon, money laundering is a crime that attempts to disguise the real origin,
source, ownership and sources of wealth that is derived from crimes and legitimizes the
income (Shehu, 2004). Vlcek (2011)observes that money laundering has been the practice of
criminals in the mid-1980s when it is used as a tool to mask illegal drug trafﬁcking. This
crime has also been the means of connecting the proceeds of crime with an individual when
the evidence for other criminal activities are lacking (Vlcek, 2011). Such a crime would
usually involve three stages of continuous actions involving placement, layering, and
integration (Leong, 2016;Reuter, 2004; Vienna Convention 1988). Thus, moneylaundering is
considered as a severe global problem, threatening the stability and economies of many
countries and have been extensively studied (Shelley, 1995;Hülsse, 2007;Hinterseer, 2002).
For example, the InternationalMonetary Fund (IMF) shows that such a crimehas caused the
world to lose around 2-3 per cent of its GDP (Mugarura, 2016; IMF 2009;Hamin et al.,2014).
The role of policing money launderingwas initially introduced by the Financial Action Task
Force (FATF) to the ﬁnancial institutions way back in 1990 (Chaikin and Sharman, 2009).
Journalof Financial Crime
Vol.26 No. 2, 2019
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