Money laundering activities have long been a concern faced by the Government of Malaysia. The Anti-Money Laundering, Anti-Terrorism Financing, and Proceeds of Unlawful Activities Act 2001 (AMLA 2001), commonly referred to as the Anti-Money Laundering Act, came into force on 15 January 2002 to address this issue.
This article primarily discusses the asset freezing and seizure procedures under AMLA 2001. It also considers the remedies available where your property is subject to potential forfeiture under the Act.
Money Laundering Offences
Section 4(1) of AMLA 2001 provides that a person commits an offence if he directly or indirectly engages in, possesses, receives, transfers, or conceals money derived from unlawful activities. This applies regardless of whether the person knew at the time of receipt or handling that the funds were of illegal origin.
Where Section 4(1) is engaged, banks, insurance companies, and similar financial institutions are required to submit reports to the Financial Intelligence Unit (FIU) for investigation. Enforcement authorities may, upon investigation and where necessary, direct financial institutions to freeze assets. Any person suspected of money laundering may have assets such as bank accounts or financial instruments frozen, or physical assets such as property or vehicles seized.
Freezing Orders and Seizure Orders
A freezing order is an order issued by enforcement authorities under Section 44 of AMLA 2001. It is generally issued to preserve the status quo of property during the course of an investigation. Once a freezing order is made, the property owner is prohibited from dealing with the property in any manner, including selling, transferring, or otherwise disposing of it, and the asset must not be moved outside the jurisdiction or regulatory control of the enforcement authorities.
To prevent the subject of a freezing order from leaving the country, the order may also require the surrender of the individual’s passport to the Director-General of Immigration. A freezing order is valid for 90 days. If no prosecution is eventually brought against the person concerned, enforcement authorities may nonetheless issue a seizure order in place of the freezing order.
Under Section 44A, a freezing order may be varied or revoked in the following circumstances:-
- A senior officer higher in rank than the issuing officer is satisfied that the asset should not have been frozen;
- Upon a written application made by the aggrieved person to the enforcement authority for revocation.
When property is seized, enforcement authorities are required to prepare an inventory of the seized assets and serve it on the Public Prosecutor and the property owner. However, service is not required where the seizure takes place in the presence of the owner.
An application for a seizure order must be made within 12 months from the date of the earlier freezing order.
Forfeiture of Property under AMLA 2001
Where a person is prosecuted under AMLA 2001, his property may be forfeited under Section 55. Alternatively, even in the absence of prosecution or conviction, property may still be forfeited under Section 56. In such cases, the Public Prosecutor may apply to the High Court for a forfeiture order if satisfied that the assets are connected to offences under AMLA 2001.
If the seized property cannot be located, or has been disposed of prior to forfeiture, the court may order the defendant to pay a sum equivalent to the value of the property as a penalty.
What If Your Property is Linked to Another Person’s Crime?
If you believe your property has been wrongly frozen or seized by enforcement authorities, you may assert your ownership rights in accordance with the law. AMLA 2001 requires the court, upon publication of a forfeiture notice in the Gazette, to notify lawful owners of such property to come forward and establish their claims.
Under Section 61, a claimant may seek the return of seized property if the following can be proven:-
- The claimant has a lawful interest in the property;
- He did not participate in or conspire in the offence related to the property;
- He did not know of, or consent to, the unlawful use of the property;
- He did not acquire the property in circumstances where he ought to have known that the seller was attempting to avoid forfeiture;
- He took all reasonable steps to prevent the unlawful use of the property.
In such circumstances, you may engage a lawyer to file an application before the court for the return of your property. An experienced practitioner in this area may be crucial in assisting you to recover your assets.
