National Risk Assessment 2020
The National Risk Assessment (NRA) is centrally coordinated by Malaysia’s National Coordination Committee to Counter Money Laundering (NCC) and is intended as a tool to better understand the risk of the country being used for laundering of proceeds from crime or for financing of terrorism activities. In this regard, Labuan International Business Financial Centre (Labuan IBFC) is assessed as part of the country’s financial and non-financial sector within the NRA since 2013. The National Risk Assessment 2020 (NRA 2020), was the latest exercise undertaken and the findings serve as a key reference for the reporting institutions in Malaysia.
In the NRA 2020, Labuan IBFC was rated as overall ‘Low Risk’ jurisdiction. It also showed improvements across its constituent sectors in comparison to the previous assessment in 2017 particularly due to better effectiveness in the control measures. In fact, the Labuan sectors generally showed a relatively lower Net Risk Rating compared to its domestic counterparts as depicted in the tables below for Sectoral Risk Assessment for Financial Institutions and Designated Non-Financial Businesses and Professions which are extracted from the NRA 2020 report.
As provided in paragraph 6.7 under the Application of Risk-Based Approach (RBA) of the Guidelines on Anti-Money Laundering, Countering Financing of Terrorism Financing and Targeted Financial Sanctions for Labuan Key Reporting Institutions, the key reporting institutions (KRIs) are to adopt the RBA in effecting their own money laundering and terrorist financing risk (ML/TF) assessment. As such, KRIs are expected to use the NRA 2020 results in managing their ML/TF risks including determining the appropriate risk appetite as well as effecting appropriate compliance programme such as customer due diligence measures.
For more information on the NRA 2020, the Executive Summary can be accessed via the following link https://amlcft.bnm.gov.my/publications. By undertaking continuous NRAs and addressing their findings, it will ensure that Malaysia including Labuan IBFC are adequately positioned to address and manage any ML/TF threats to the jurisdiction. It would also preserve Labuan IBFC‘s reputation as a highly cooperative, transparent jurisdiction in combatting against ML/TF-related crimes.
19 July 2022
