Overview

As a licensed entity under the jurisdiction of Labuan Financial Services Authority (LFSA), Law & Commerce Trust Limited (LCTL) is guided by Acts which govern the industry and Guidelines issued by LFSA. Compliance Dept has to ensure LCTL is in compliance with the Acts and all the Guidelines as listed below

1. Guidelines on Anti Money Laundering and Counter Financing of Terrorism
2. Guidelines for a Trust Company issued by Labuan FSA January 2005
3. Guidelines on Work Permit Application issued by Labuan FSA February 2015
4. Clarification on Work Permit Application issued by Labuan FSA March 2015
5. Guidelines on Fit and Proper Person Requirements issued by Labuan FSA February 2014
6. Guidelines on the Establishment of Marketing Office issued by Labuan FSA March 2014 (3rd revision)
7. Guidelines on Compliance Function for Licensed Entities issued by Labuan FSA November 2013
8. Guidelines for the Establishment of Labuan Trust Companies issued by Labuan FSA September 2011
9. Directive on Internal Audit Requirement for Labuan Trust Companies issued by Labuan FSA April 2011
10. Internal Policy and Procedures on Business Operating Manual

  LCTL has also established its own internal control for the purpose of creating value and minimising risk within the organisation. Specifically, this internal control is in the form of Policy and Procedure which is divided into two categorise

1. Policy & Procedure covering Business Process
2. Policy & Procedure covering Anti Money Laundering/Counter Financing Terrorism (AML/CFT)

  Internal audit of LCTL which is conducted as per guidelines issued by LFSA is an independent appraisal function established by the management of LCTL for the review of the internal control system. Management of LCTL also request the internal audit for Business Process must be separately conducted from internal audit AMLCFT. This is to show our seriousness in combating any element of AMLCFT within our organisation.

LCTL has a strong regime to fight money laundering and terrorism financing. Compliance Dept is the policy unit responsible for adhering to Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AML/CTF Act) and the Guidelines on Anti Money Laundering and Counter Financing of Terrorism (Trust Company Sector) issued by LFSA.

In establishing relationship with potential clients and continuing relationship with existing clients, LCTL has some level of AML/CFT obligations and must discharge the compliance obligations seriously.

Satisfying the requirements of AMLCFT acts and guidelines include

1. Customer Due Diligence (CDD)/Know Your Procedures
   A guide for relevant employee to know basic documents and information that must be collected from a customer before accepting the customer.
2. Enhanced Customer Due Diligence Procedure
   To provide enhanced steps to be taken when a customer is classified as a high risk customer
3. Company Principles, Roles and Responsibilities Procedure
   Explaining the roles and responsibilities of the Board of Directors, Senior Management and Compliance Officer and guiding guide all staff on the level of integrity, and the conduct and behaviour expected of them in upholding the Company’s reputation.
   
4. Risk Based Approach (RBA) Customer Assessment Procedure Manual
   Explaining factors to consider in assessing risk before accepting a customer, explaining how risk ratings are applied, explaining how to recognize PEP and its treatment, stating the risk review schedule
5. On-Going Due Diligence Of Customers Procedure
   Guiding staff on how to ensure the company’s continuing knowledge of their customers through periodic RBA review of customers’ information
6. Suspicious Transaction Report
   Explaining what amounts to suspicious activities and how suspicious activities will be reported as well as follow-up action.
7. Record Keeping Procedure
   Explaining what records to be kept, how long and where to keep.
8. Staff AML/CFT Training and Awareness Procedure
   Explaining to all staff on the AML/CFT Training Programme enforced by the company and the type, level and frequency of AML/CFT training that will be conducted
9. Red Flags Identification Procedure
   Explaining what kind of activities may be classified as suspicion which will prompt reporting to be made.

1. What is money laundering?
   The goal of most criminal acts is to generate a profit. To enjoy their ill-gotten gains, criminals commonly seek to disguise the illegal source of those profits. Money laundering is the processing of criminal profits to disguise their illegal origin.
   
   
2. What is terrorism financing?
   The term ‘terrorism financing’ includes the financing of terrorist acts, and of terrorists and terrorist organisations. The financing of terrorism may include the provision of any kind of asset in any form, including but not limited to—bank credits, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts, and letters of credit.
   
   
3. Who does the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 apply to?
   Provides for the offence of money laundering, the measures to be taken for the prevention of money laundering and terrorism financing offences, investigation powers and the forfeiture of property involved in or derived from money laundering and terrorism financing offences, as well as terrorist property, proceeds of an unlawful activity and instrumentalities of an offence.
   
   
4. Why do I have to provide identification?
   When regulated businesses are providing a ‘designated service’ they may ask their customers to provide information about their identity. Designated services include, but are not limited to, — company incorporation, opening a bank account, employment pass application, obtaining a loan, buying shares etc.
   
   
5. What happens if I do not have identification?
   A business may not be able to provide the service you require if you are unable to provide the appropriate level of identification required.

1. BNM – AML/CFT Law and Policy
2. Financial Action Task Force (FATF)
3. Asia/Pacific Group on Money Laundering (APG)
4. The FATF Recommendations
5. Mutual Evaluation Report on Anti-money laundering and counter-terrorist financing measures on Malaysia
6. Inland Revenue Board (IRB) – Press statement in relation to tax offences under AMLA

1. BNM – AML/CFT Law and Policy
2. Financial Action Task Force (FATF)
3. Asia/Pacific Group on Money Laundering (APG)
4. The FATF Recommendations
   • http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/public-statement-february-2016.html
   • http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/fatf-compliance-february-2016.html
5. Mutual Evaluation Report on Anti-money laundering and counter-terrorist financing measures on Malaysia
6. Inland Revenue Board (IRB) – Press statement in relation to tax offences under AMLA

Law & Commerce is a reporting institution under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613). Law & Commerce also abides by its own Code of Practice, Code of Practice of the Association of Labuan Trust Companies as well as internationally accepted good practice in anti-money laundering and counter-terrorist financing. Law & Commerce places utmost importance on compliance and will only proceed with client’s engagement when due diligent is satisfactory.

 

Law & Commerce is obligated by the laws to only enter into business relationship when due diligent has been conducted. There are two types of due diligent exercises namely;

1. Basic Customer Due Diligent (BCDD)
2. Enhanced Due Diligent (EDD)

Enhanced Due DD must be conducted before entering into business relationship with customers coming from High Risk Countries. If you are national from a listed High Risk Country, you are advised to consult our Compliance Officer to understand our Enhanced Due Diligent requirements.

For Basis Customer Due Diligent (Non-High Risk Countries) before entering into a business relationship with any client we require that at least the following are information;

1. True identity of the ultimate beneficial owner,
2. That we are not dealing with an agent but rather the principal,
3. The residential address of the true beneficial owners,
4. The stated nature of business the description of which enables us to understand the nature and extend of the business to be conducted.