In an announcement today, Bank Negara Malaysia (BNM) imposed an Administrative Monetary Penalty (AMP) of RM600,000 on TNG Digital Sdn. Bhd. (TNGD) on 18th May 2023.
This substantial penalty was enforced due to TNGD’s violation of the Financial Services Act 2013 (FSA), in conjunction with specific policy documents related to anti-money laundering and counter-financing of terrorism (AML/CFT). The violation involved the onboarding of two sanctioned individuals, clearly contravening regulatory guidelines and posing a significant risk to the financial system.
The key violations that led to the imposition of the AMP on TNGD can be summarized as follows:
- Failure to Conduct Sanctions Screening (AML/CFT Sector 4 PD): TNGD onboarded a sanctioned individual without conducting the required sanctions screening on the customer’s name. This oversight directly contravened the AML/CFT Sector 4 policy document, which outlines specific procedures for electronic money and non-bank affiliated charge & credit card services.
- Neglecting United Nations Security Council Resolutions List and Domestic List (AML/CFT and TFS for FIs PD): In a separate instance, TNGD failed to ascertain whether one of its customers matched with the United Nations Security Council Resolutions List or the Minister of Home Affairs Domestic List. This failure to cross-verify customer information against these crucial lists was a breach of the AML/CFT and TFS for FIs policy document.
The consequences of these AML/CFT violations were significant. On 31st May 2023, TNGD paid a substantial fine of RM600,000 as a result of the AMP imposed by Bank Negara Malaysia. This penalty serves as a stark reminder of the importance of compliance with regulatory guidelines, especially in the financial sector where adherence to anti-money laundering and counter-financing of terrorism measures is crucial to maintaining the integrity of the financial system.
The RM600,000 penalty imposed on TNGD wasn’t arbitrarily set but was determined by taking into account several factors. These factors included both aggravating and mitigating circumstances surrounding the violations. The assessment considered:
- The severity and nature of the violations, which involved two separate instances of onboarding sanctioned individuals.
- The potential risk posed to the financial system due to inadequate AML/CFT measures.
- The potential harm to the reputation of the financial institution and the broader industry.
The full announcement from Bank Negara can be accessed here – link.