The impact of customer due diligence in the Islamic banking institutions in Malaysia: a legal perspective

The money laundering and terrorism financing are the financial crimes that caused global threat to the financial integrity and economic activities of the country. In combating these financial crimes, the international standards imposed by the Financial Act ion Task Force (“FATF”) requires that al...

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Main Authors:	Raja Alias, Raja Madihah, Mohd Yasin, Norhashimah, Ng, See Teong
Format:	Conference or Workshop Item
Language:	English
Published:	Centre for Contemporary Fiqh and Shariah Compliance, Faculty of Islamic Studies, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia 2018
Subjects:	BP173.75 Islam and economics HG3368 Islamic Banking and Finance K Law (General) KBP639 Muʻāmalāt
Online Access:	http://irep.iium.edu.my/65710/ http://irep.iium.edu.my/65710/ http://irep.iium.edu.my/65710/1/65710_The%20Impact%20Of%20Customer%20Due%20Diligence.pdf

id	iium-65710
recordtype	eprints
spelling	iium-657102018-09-20T05:42:51Z http://irep.iium.edu.my/65710/ The impact of customer due diligence in the Islamic banking institutions in Malaysia: a legal perspective Raja Alias, Raja Madihah Mohd Yasin, Norhashimah Ng, See Teong BP173.75 Islam and economics HG3368 Islamic Banking and Finance K Law (General) KBP639 Muʻāmalāt The money laundering and terrorism financing are the financial crimes that caused global threat to the financial integrity and economic activities of the country. In combating these financial crimes, the international standards imposed by the Financial Act ion Task Force (“FATF”) requires that all financial institutions in all countries to undertake the Customer Due Diligence (“CDD”) as its preventive measurements in combating these financial crimes. In Malaysia, this CDD requirement is regulated under Section 16 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613) (“AMLATFPUAA”). This CDD requirements is applicable to all the ‘Reporting Institutions’ listed under the First Schedule of the AMLATFPUAA which includes the Islamic banking institutions in Malaysia. As such, the legal requirements provide that there is no exception for the Islamic banking institutions to follow this statutory requirement. Therefore, the objective of this paper is to highlight the standards in conducting CDD requirements on the Islamic banking institutions in Malaysia. This paper is significant by emphasising the Policy Document on conducting CDD under the ‘Anti- Money Laundering and Counter Financing of Terrorism (AML/CFT)- Banking and Deposit- Taking Institutions (Sector 1)’ which is set out by the Central Bank of Malaysia (“BNM”). This paper employs library based research by analysing the primary and secondary legal sources on CDD standards and legal requirements. This paper suggests that the Islamic banking institutions in Malaysia are in compliance with the international standards on CDD as imposed by the FATF and the statutory obligations under the AMLATFPUAA. Therefore, continuous efforts by the Islamic banks in Malaysia are required in combating these financial crimes. Centre for Contemporary Fiqh and Shariah Compliance, Faculty of Islamic Studies, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia 2018 Conference or Workshop Item PeerReviewed application/pdf en http://irep.iium.edu.my/65710/1/65710_The%20Impact%20Of%20Customer%20Due%20Diligence.pdf Raja Alias, Raja Madihah and Mohd Yasin, Norhashimah and Ng, See Teong (2018) The impact of customer due diligence in the Islamic banking institutions in Malaysia: a legal perspective. In: International Conference on Law and Islamic Jurisprudence (ICIJ 2018), 30th April 2018, Phuket, Thailand. http://ukmsyariah.org/terbitan/wp-content/uploads/2018/04/31-madihah.pdf
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	BP173.75 Islam and economics HG3368 Islamic Banking and Finance K Law (General) KBP639 Muʻāmalāt
spellingShingle	BP173.75 Islam and economics HG3368 Islamic Banking and Finance K Law (General) KBP639 Muʻāmalāt Raja Alias, Raja Madihah Mohd Yasin, Norhashimah Ng, See Teong The impact of customer due diligence in the Islamic banking institutions in Malaysia: a legal perspective
description	The money laundering and terrorism financing are the financial crimes that caused global threat to the financial integrity and economic activities of the country. In combating these financial crimes, the international standards imposed by the Financial Act ion Task Force (“FATF”) requires that all financial institutions in all countries to undertake the Customer Due Diligence (“CDD”) as its preventive measurements in combating these financial crimes. In Malaysia, this CDD requirement is regulated under Section 16 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613) (“AMLATFPUAA”). This CDD requirements is applicable to all the ‘Reporting Institutions’ listed under the First Schedule of the AMLATFPUAA which includes the Islamic banking institutions in Malaysia. As such, the legal requirements provide that there is no exception for the Islamic banking institutions to follow this statutory requirement. Therefore, the objective of this paper is to highlight the standards in conducting CDD requirements on the Islamic banking institutions in Malaysia. This paper is significant by emphasising the Policy Document on conducting CDD under the ‘Anti- Money Laundering and Counter Financing of Terrorism (AML/CFT)- Banking and Deposit- Taking Institutions (Sector 1)’ which is set out by the Central Bank of Malaysia (“BNM”). This paper employs library based research by analysing the primary and secondary legal sources on CDD standards and legal requirements. This paper suggests that the Islamic banking institutions in Malaysia are in compliance with the international standards on CDD as imposed by the FATF and the statutory obligations under the AMLATFPUAA. Therefore, continuous efforts by the Islamic banks in Malaysia are required in combating these financial crimes.
format	Conference or Workshop Item
author	Raja Alias, Raja Madihah Mohd Yasin, Norhashimah Ng, See Teong
author_facet	Raja Alias, Raja Madihah Mohd Yasin, Norhashimah Ng, See Teong
author_sort	Raja Alias, Raja Madihah
title	The impact of customer due diligence in the Islamic banking institutions in Malaysia: a legal perspective
title_short	The impact of customer due diligence in the Islamic banking institutions in Malaysia: a legal perspective
title_full	The impact of customer due diligence in the Islamic banking institutions in Malaysia: a legal perspective
title_fullStr	The impact of customer due diligence in the Islamic banking institutions in Malaysia: a legal perspective
title_full_unstemmed	The impact of customer due diligence in the Islamic banking institutions in Malaysia: a legal perspective
title_sort	impact of customer due diligence in the islamic banking institutions in malaysia: a legal perspective
publisher	Centre for Contemporary Fiqh and Shariah Compliance, Faculty of Islamic Studies, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia
publishDate	2018
url	http://irep.iium.edu.my/65710/ http://irep.iium.edu.my/65710/ http://irep.iium.edu.my/65710/1/65710_The%20Impact%20Of%20Customer%20Due%20Diligence.pdf
first_indexed	2023-09-18T21:33:13Z
last_indexed	2023-09-18T21:33:13Z
_version_	1777412649263300608

The impact of customer due diligence in the Islamic banking institutions in Malaysia: a legal perspective

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