KUALA LUMPUR: Financial criminals, including those involved in money laundering and financing terrorism, have their own networks to manipulate loopholes and weaknesses in the existing regulations and laws of the country.
They easily alter their tactics upon discovering weaknesses in the national financial system, making it difficult for enforcement agencies to detect them.
MACC deputy chief commissioner (operations) Datuk Seri Ahmad Khusairi Yahaya said financial criminals in the country were constantly evolving or adapting in tandem with existing technology, making efforts to track them more complex.
He likened these crimes to "contagious viruses" that mutate constantly to evade eradication.
"Today's financial criminals are constantly adapting and exploiting weaknesses in the national financial system, always changing tactics to evade detection by authorities.
"Their cunning can be observed through their ability to manipulate loopholes in both laws and existing regulations.
"They also operate within established networks and are assisted by other professions such as accountants or lawyers, making crimes like these increasingly complex or difficult to detect and investigate," he told Berita Harian.
It is understood that among the loopholes that financial criminals can exploit are the abuse of power among enforcement officers, weaknesses in customs inspection systems, online gambling, unregulated insurance industries and foreign exchange or hawala transactions.
Uneven enforcement of intellectual property rights and offshore financial services, along with difficulties in proving the transfer of illicit funds, asset ownership transfer transactions, and inconsistent reporting by institutions in cases of suspicious transactions, also contribute significantly to illegal activities in Malaysia.
These factors create vulnerabilities that financial criminals can exploit to carry out money laundering and other illicit operations.
Strengthening these areas is crucial to enhancing the overall effectiveness of the country's financial regulatory framework.
The advancement of current systems, including technological developments in the landscape of corruption, financial crime and money laundering, has successfully made them more resilient to committing these crimes.
Widespread crime
Bank Negara Malaysia (BNM) has identified two major offences frequently committed by financial institutions, contributing to the proliferation of money laundering and terrorism financing activities.
These offences include the failure of financial institutions to conduct Customer Due Diligence (CDD) and sanctions screening upon client onboarding, both deemed mandatory by BNM for reporting institutions.
Both of these steps must be taken by financial institutions designated by BNM as reporting institutions so that risk assessments related to money laundering and terrorism financing activities do not occur or may be caused by customers of businesses or organisations.
MACC chief commissioner Tan Sri Azam Baki had said that the criminals' modus operandi were getting more advanced due to the latest developments around the world.
He said a mastermind in such a case would operate a syndicate and reap profits from money laundering activities using companies registered under the name of a proxy.
The anti-grafts Anti-Money Laundering and Asset Forfeiture Division director, Datuk Mohamad Zamri Zainul Abidin also admitted that lax due diligence on customers had resulted in the existence of many dummy accounts and loans to ineligible customers.
This year, MACC also conducted a large-scale operation through Ops Samba, in collaboration with its anti-money laundering division, together with the Inland Revenue Board and Bank Negara Malaysia.
Losses due to smuggling syndicate activities involving several members of the Customs Department at Kuala Lumpur International Airport (KLIA), Sepang, reached RM2 billion over the past three years.
So far, 34 enforcement officers and 27 individuals, as well as company owners, have been detained through Ops Samba 2.0 for protecting and facilitating the activities of the smuggling syndicate.
Commenting on effective resolution measures, Ahmad Khusairi suggested a proactive movement to be collectively initiated with each related party playing their respective roles.
"Threats like these cannot be faced and handled by a single agency alone.
"A collaboration and cooperation need to be established where each agency plays its role according to its expertise and assigned jurisdiction, including in terms of sharing espionage information, views, and best practices or methods," he said.