12/12/2025

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FRIDAY | DEC 12, 2025

Malaysia’s fight against illicit finance earns FATF recognition o Global watchdog Financial Action Task Force upgrades country to highest category, notes stronger supervisory and legal frameworks, robust risk understanding and substantial reforms

Ű BY JOHN GILBERT sunbiz@thesundaily.com

KUALA LUMPUR: Malaysia has strengthened its defences against illicit finance since 2015, notably by enhancing its legal framework and supervisory oversight of the financial and non-financial sectors. The global financial crime watchdog, the Financial Action Task Force (FATF), revealed in its findings in a 16-month assessment of Malaysia’s defences against illicit finance that the country has under taken initiatives to update and deepen its understanding of the risks of illegal finance and to strengthen domestic cooperation and coordi nation mechanisms. In FATF’s recent mutual evaluation of Malaysia’s anti-money laundering, counter-terrorism financing and counter proliferation financing (AML/CFT/CPF) framework, the country was up graded to the highest category of “Regular Follow-Up” – a distinction achieved by only 11 other countries in the previous evaluation round. This recognition by the inter national body reflects Malaysia’s comprehensive and coordinated ap proach to combating money laun dering, terrorism financing and proli feration financing, reinforcing global confidence in Malaysia as a safe and transparent investment destination. Further, the recognition supports stronger economic growth, enhances long-term prosperity, facilitates investment inflows, reduces the cost of doing business, and reflects the success of the whole-of-nation effort to strengthen Malaysia’s financial integrity framework. However, the report noted that Malaysia faces significant challenges in translating money laundering investigations into prosecutions and convictions. FATF president Elisa de Anda Madrazo ( pic ) said Malaysia was one of the first countries to be assessed in the new round of evaluations. “Malaysian authorities were highly committed to the process and have shown notable progress in streng thening its AML/CFT regime, resulting in stronger supervisory frameworks for financial institutions, robust risk understanding and effective coordi nation among agencies. “Malaysia has strengthened its

and professions, and non profit organisations. Malaysia faces money laundering risks due to several factors, including corruption and fraud, an informal economy, rapid growth in digital finance and strategic position as a transit hub for smuggling, human trafficking, organised crime and piracy. The country is also

businesses and professions such as lawyers, real estate agents and accountants. It said risk awareness and controls are generally more advanced among larger institutions, while smaller firms tend to have weaker risk understanding and mitigation measures. Although effectiveness in the financial sector is substantial, the FATF report said significant improve ments are still needed to strengthen preventive measures in non-financial sectors. APG co-chair Mitsutoshi Kajikawa said, “As a strong voice for anti-money laundering and counterfinancing of terrorism in the Asia-Pacific region, the APG welcomes the publication of the Malaysian evaluation report. “This is the APG’s first mutual evaluation report for the global new round, and I can see much of our region’s risk and context reflected in the report. It recognises not only the scale of our challenge, but also the successes we can be assured of achieving with the continuous improvement mindset exemplified by Malaysian authorities. “We look forward to working with Malaysia to share the insights it gained regarding its strengths with regional partners, build on the findings, and implement the report’s astute recommendations,” he said. Malaysia was given a three-year roadmap outlining key recommended actions. These include strengthening international cooperation, improving its sanctions framework, and demon strating sustained increases in money laundering prosecutions and con victions. Malaysia will report its progress to the FATF and the APG.

legal framework and implemented substantial reforms, positioning it to tackle major cases like 1Malaysia Development Bhd (1MDB) that threaten public confidence. De Anda said Malaysia must sustain and build on these reforms, strengthen international cooperation, improve its sanctions framework and work at pace to demonstrate a sustained increase in money laun dering prosecutions and convictions over the next three years. “By implementing the FATF’s standards and recommendations, countries not only safeguard the integrity of their financial system, but make people and communities safer by stemming the flows of illicit finance that sustain harmful crimes such as human trafficking, drug trafficking, corruption and organised crime,” she said. The FATF and the Asia Pacific Group on Money Laundering (APG) carried out a joint review of Malaysia’s systems for preventing money laundering, financing of terrorism and financing of weapons The assessment reviewed the effectiveness of these measures and Malaysia’s compliance with inter national FATF standards, based on an on-site visit by an international team of assessors in February 2025. The mutual evaluation report is based on a rigorous, in-depth assess ment conducted over 16 months. During this time, the assessment team held more than 70 meetings with relevant public authorities. Also, it engaged 45 private sector entities, including financial insti tutions, virtual asset service providers, designated non-financial businesses

recovery of about €8 billion, mostly linked to 1MDB-related assets. Moving on, the assess ment found that Malaysia redirected resources from other money laundering investigations to focus on the major 1MDB and related cases. While this prioritisation

The drop in PBT of RM107.5 million (-69.4%) compared to the preceding year’s corresponding period was due to share of losses from associate companies. In addition, BAuto accounted for the expense relating to the group’s Employees Share Scheme of about RM2.3 million in the six-month period compared to RM4 million in the previous year’s corresponding period. For the quarter ended Oct 31, 2025, the board has approved and declared a second interim dividend of 1.25 sen single-tier dividend per share in respect of financial year ending April 30, 2026 (quarter ended Oct 31, 2024: 3 sen). The entitlement date has been was necessary to handle the complex investigation and restore public confi dence, it limited law enforcement’s capacity to pursue other money laundering cases. FATF’s report noted that between 2019 and February 2025, Malaysia secured 62 convictions involving individuals and five legal entities for money laundering and seven indi viduals for terrorist financing. Although terrorist financing con victions have increased since the last mutual evaluation, the overall con viction rate remains low relative to the country’s risk profile. The assessment said Malaysia has a strong understanding of the risks associated with the misuse of corporate structures and has applied risk-based safeguards. It said that Malaysian authorities use multiple channels to obtain accurate, up-to-date beneficial ownership information. However, to ensure timely access to critical information for criminal investigations, improvements are necessary. Touching on the private sector, the report said Malaysia has a strong supervisory framework for financial institutions, virtual asset service pro viders and designated non-financial

exposed to terrorist finan cing risks due to its proxi mity to terrorist groups in neigh bouring jurisdictions. The mutual evaluation found that Malaysia has a solid understanding of these risks through regular assess ments but needs to further strengthen its knowledge of cross-border crime, third-party money laundering, and trade-based money laundering. The assessment team examined the handling of major criminal cases, such as the 1MDB investigation, which exposed the misappropriation of billions from a sovereign wealth fund by high-profile individuals. The report noted that Malaysia implemented significant reforms following the case, including amend ments to laws, the introduction of new national anti-corruption policies and strategies, stronger supervision and preventive measures, legislation on mutual legal assistance and public finance transparency and the establishment of the National Anti Financial Crime Centre to strengthen enforcement coordination. Further, it noted that during the review period, efforts to trace complex cross-border financial flows led to the

BAuto posts RM28.4m pre-tax profit, declares 1.25 sen dividend for Q2 PETALING JAYA: Bermaz Auto Bhd (BAuto) reported lower group revenue and profit before tax (PBT) of RM556.5 million and RM28.4 million res pectively for the second quarter ended Oct 31, 2025 (Q2’26) compared to RM646.9 million and RM57.1 million respectively in the preceding year’s corresponding quarter. its CBU models namely, XPeng X9, Mazda CX-60 and Mazda3 1.5L, which were available in March, September and October of 2025 respectively. PBT fell by RM28.7 million (-50.2%) compared to the preceding year’s corresponding quarter largely due to the drop in revenue. and Kia domestic operations, which was partly mitigated by the launching of several CBU models. fixed on Jan 23, 2026 and payment is on Feb 6, 2026. BAuto in a statement said Malaysia’s economy will continue to be impacted by inflationary pressures, ongoing uncertainties in geopolitical conflicts and weaker global growth. Vehicle sales in the country will continue to be impacted by the influx of Chinese-made vehicles.

Share Scheme amounting to RM1.1 million in the quarter under review compared to RM2 million in the preceding year’s corresponding quarter. For the six-month period ended Oct 31, 2025, BAuto reported lower revenue and PBT of RM1.05 billion and RM47.3 million respectively compared to RM1.49 billion and RM154.8 million respectively in the corresponding quarter of the previous year. Group revenue declined by RM445.3 million (-29.8%) largely due to lower sales volume from its Mazda

In addition, the group recorded share of losses from associate companies in the current quarter compared to share of profits in the previous corresponding quarter largely due to Kia Malaysia Sdn Bhd, which was negatively impacted by retroactive fees (idle capacity costs) from lower-than-anticipated CKD production volumes. The group also accounted for expenses relating to its Employees

Revenue declined by RM90.4 million (-14%) largely due to lower sales volume in domestic operations for certain Mazda and Kia vehicles which are nearing their end of product lifecycles and aggravated by the highly competitive market conditions such as the influx of Chinese-made vehicles with their low-price strategy. The lower revenue was partially mitigated by encouraging sales from

The company during the quarter under review introduced new CBU models as an interim measure to address the end-of product lifecycles of certain vehicle models in the group. The board remains cautious and anticipates the overall performance of the group will continue to be challenging for the financial year ending April 30, 2026.