Introduction
Section 3(1) of the Anti-Money Laundering, Anti-terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFA) defines “money laundering offence” as an offence under subsection 4(1).
S.4(1) reads as follows:
Any person who –
(a) engages, directly or indirectly, in a transaction that involves proceeds of an unlawful activity or instrumentalities of an offence;
(b) acquires, receives, possesses, disguises, transfers, converts, exchanges, carries, disposes of or uses proceeds of an unlawful activity or instrumentalities of an offence;
(c) removes from or brings into Malaysia, proceeds of an unlawful activity or instrumentalities of an offence; or
(d) conceals, disguises or impedes the establishment of the true nature, origin, location, movement, disposition, title of, rights with respect to, or ownership of, proceeds of an unlawful activity or instrumentalities of an offence,
commits a money laundering offence and shall on conviction be liable to imprisonment for a term not exceeding fifteen years and shall also be liable to a fine of not less than five times the sum or value of the proceeds of an unlawful activity or instrumentalities of an offence at the time the offence was committed or five million ringgit, whichever is the higher.
Any of the conduct stated in S.4(1)(a), (b), (c), and (d) may constitute a money laundering offence. The common prerequisite for each offence is that there must be proceeds of an unlawful activity or instrumentalities of an offence.
While S.3(1) defines “unlawful activity” as any activity which constitutes any serious offence, “serious offence” refers to (a) any of the offences specified in the Second Schedule; (b) an attempt to commit any of those offences; or (c) the abetment of any of those offences.
Accordingly, an unlawful activity refers to a serious offence, which might be any of the offences listed in the Second Schedule to the AMLATFA. Since the offences under S.4(1) of the AMLATFA itself are listed in the Second Schedule, all the offences under S.4(1) are serious offences within the meaning of S.3(1).
Elements
Under S.4(1) of AMLATFA, three elements must be established to constitute a money laundering offence. First, the accused must have received monies. Second, the monies received must be the proceeds of unlawful activity or instrumentalities of an offence. Third, the accused must have the knowledge or reason to believe or reasonable suspicion that the property is the proceeds of unlawful activity or instrumentalities of an offence, which under S.4(2) can be inferred from objective factual circumstances.
In the case of Public Prosecutor v Genneva Malaysia Sdn Bhd & Ors and another appeal [2021] 9 MLJ 288, Genneva Malaysia Sdn Bhd was involved in the sale of gold to purchasers under its scheme where a monthly gift termed as ‘hibah’ was payable to those who purchased gold from Genneva Malaysia. Under the scheme, the hibah was payable for a certain period and at the end of the tenure for the hibah, it was orally agreed between Genneva Malaysia and the purchasers that Genneva Malaysia would buy back the gold from the purchasers at its original price. In 2012, the business premise of Genneva Malaysia was raided by the enforcement officers of the Central Bank of Malaysia on suspicion of accepting deposits without a valid licence. One of the charges proffered against the accused persons was money laundering under S.4(1)(a) of the AMLATFA.
The High Court held that the prosecution had adduced sufficient evidence to prove the receipt of monies by each accused through multiple cash cheques which originated and traceable from the two impugned CIMB Islamic Bank Bhd accounts belonging to Genneva Malaysia. The prosecution had also adduced sufficient evidence using a forensic accounting analysis and the money trail to show that the monies in these accounts were proceeds of unlawful activity, which was categorised as a serious offence under the AMLATFA.
Besides, the evidence showed that all the accused persons had knowledge of Genneva Malaysia’s business model. All the accused persons must be taken to at least harbour some reasonable suspicion as to the business model practised by Genneva Malaysia and must undertake steps to make further inquiries rather than just rely on what was advised to them by persons appointed by Genneva Malaysia itself. In this regard, the defence had failed to raise a reasonable doubt in the prosecution’s case in the money laundering charges.
Conclusion
In a nutshell, the case of Genneva Malaysia underscores the significance of the AMLATFA in combating money laundering, highlighting that ignorance is not a valid defence in the face of potential money laundering.
