GOVT TO INCREASE COOPERATION, ENGAGEMENT SESSIONS TO IMPROVE IMPLEMENTATION, COMPLIANCE OF PEP POLICY - LIM

KUALA LUMPUR, Dec 9 (Bernama) -- The government will increase cooperation and hold engagement sessions and inspections on financial institutions to improve the implementation and compliance of the politically exposed persons (PEP) policy, according to the Ministry of Finance.

Deputy Minister Lim Hui Ying said the government would also implement improvements to the policy through an automation process followed by the issuance of best practice guidelines to increase the effectiveness of PEP implementation. 

"This also includes providing more specific examples related to categories of individuals, positions or functions with PEP status, as well as improvements to the enhanced customer due diligence (ECDD) process," she said during a question-and-answer session at the Dewan Negara today.

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She was replying to a supplementary question from Senator Tan Sri Mohamad Fatmi Che Salleh regarding the government's authority to overcome the issue of PEP status set by financial institutions in the country.

Lim said the need to identify PEP and implement ECDD measures was established based on international standards issued by a global organisation, the Financial Action Task Force (FATF). 

She said these standards must be complied with by all reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, including banking institutions, whether domestic or foreign. 

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“The need to implement ECDD does not only apply to PEP but all clients identified as high risk. 

"The implementation of ECDD aims to obtain comprehensive information and understanding about these customers and subsequently protect the country's financial sector from any risk of being misused by financial criminal activities," she said. 

Lim said that if Malaysia does not comply with these standards, the country will also be exposed to the risk of an unsatisfactory rating by the FATF. 

"Specifically, this would result in technical non-compliance with FATF standards that set out the requirements for specific measures to be taken on customers with PEP status," she added.

-- BERNAMA