KUALA LUMPUR: The complex money laundering investigations related to 1Malaysia Development Bhd (1MDB) are a significant achievement and demonstrate enhanced coordination between various law enforcement agencies (LEAs), Bank Negara Malaysia (BNM), the Financial Intelligence Unit (FIU) and the Attorney General’s Chambers (AGC).
The Financial Action Task Force (FATF) and Asia/Pacific Group on Money Laundering (APG) said in a report published today that between 2019 and February 2025, Malaysia recovered a total of 8.11 billion euros (RM37.63 billion) in assets, with 75 per cent linked to the 1MDB case.
The majority of these 1MDB-related assets were repatriated through foreign civil forfeiture actions and settlements, it said in the 275-page Mutual Evaluation Report (MER) released today.
The FATF and APG mutual evaluation of Malaysia assessed the effectiveness of the country’s anti-money laundering, and countering terrorist financing and proliferation financing (AML/CFT/CPF) measures, and their level of compliance with the international FATF standards, at the time of an on-site visit by an international team of assessors in February 2025.
The report also said the increase in money laundering investigations to 2,648 cases, over three times the number reported in Malaysia’s 2015 MER which was 821, is a positive development.
Out of the 2,648 money laudering offences, fraud totalled 880, drug trafficking 781, corruption 433, smuggling 136, organised crime 101 and others 317.
However, between 2019 and February 2025, Malaysia recorded 234 prosecutions and secured only 52 convictions, despite a high number of investigations.
"This reflects serious shortcomings in translating investigations into outcomes. Issues such as evidence collection challenges, legislated time limits to investigate, lack of training of and experience for prosecutors, and a preference for compounds and tax-based asset recovery continue to limit the effectiveness of criminal enforcement.”
According to the report, Malaysia notes that its efforts in relation to 1MDB asset recovery has diverted resources away from other cases given its importance and transnational complexity.
Among the key recommendations are Malaysia should augment capacity and capabilities to investigate money laundering associated to medium high risk predicate offences and build upon recent enhancements to its prosecutorial approach to better target the breadth of money laundering offences to more effectively translate investigations into prosecutorial results in line with its high and medium-high risk predicate offences.
Malaysia should also enhance its training of investigators, prosecutors and judges regarding money laundering typologies and processes.
"Training should also be provided to LEAs and prosecutors on the money laundering risks related to Malaysia’s risk profile, including its medium-high risks for money laundering namely tax crimes, forgery, human trafficking/migrant smuggling, sexual exploitation and environmental crime.”
It said Malaysia should enhance its capacity to target higher-level transnational organised crime syndicates and international money laundering facilitators, particularly those involved in stand-alone or third party money laundering.
Additionally, as a transit country, Malaysia should develop and implement the ability to investigate third-party money laundering and trade-based money laundering, thereby improving its capability to detect and investigate specific money laundering typologies, said the report. - Bernama
