Yang Berbahagia Dato’ Sri Ramli Mohamed Yussof, Pengarah Jabatan Siasatan Jenayah Komersil, Polis DiRaja Malaysia,

Yang Berusaha Encik Abdul Rahman Abu Bakar, Penolong Gabenor BNM,

Yang Berusaha Encik Mohd Fuad Arshad, Pengarah, Financial Intelligence and Enforcement Department BNM,

Yang Berusaha Mr. Edward Ling, Ketua Eksekutif AICB,

AICB Compliance Officers Networking Group and IFCTF CONG Committee members,

Ladies and gentlemen, distinguished participants,

Assalamualaikum w.b.r.t and a very good morning.


1. Welcome to the 2nd day of the 13th International Financial Crime and Terrorism Financing Conference (IFCTF) 2023. I’m encouraged to see many of you back on Day 2, braving the perennial KL traffic jam. It is with my great pleasure to be here today to welcome you as we continue with our journey towards maintaining and reinforcing a more secured, credible and upstanding financial system within Malaysia. I wish to thank AICB and the Compliance Officers’ Networking Group for inviting me this morning and applaud them for organising an awareness event primarily on fighting scams and money laundering which is escalating in today’s business environment.

2. Before I delve deeper into today's session, let me kick start by sharing with you a quote from Warren Buffett on ‘Integrity’. In the context of governance, he said: "In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don't have the first, the other two will kill you". This is very apt as “Trust Reinvented: Building a Sustainable Culture of Integrity, Transparency and Accountability” is the theme for this year’s conference. And of course, Integrity and the said traits are key beyond the purpose of mere recruitment but a critical component of corporate culture that shapes or breaks an organisation. This cut across all entities – be it as a Regulator or commercial corporates such as the case for many of you in the audience today.

3. And why is it so important for a regulator such as Labuan FSA to possess a high level of integrity as part and parcel of its governance framework is, one, it is one of the financial regulators together with Bank Negara Malaysia and Securities Commission that uphold the financial and market stability and resilience of the financial system; two, to instil market confidence to investors and other stakeholders in the international market; and three, to achieve centre of regulatory excellence in the global financial landscape together with our regulatees, the Labuan financial institutions.

4. There are many other principles of equal importance to be mentioned but with my limited time suffice for me to focus on three principles or fundamentals which are deeply intertwined with the Conference’s overarching theme. The first fundamental is striving for Sustainability and Ethics. In the current ever-evolving financial landscape, as a regulator, our pursuit of excellence extends far beyond regulatory frameworks and enforcement mechanisms. It encompasses a dedicated commitment, determination and willingness towards responsible and sustainable financial practices, which is central to the Conference’s theme. Our efforts to combat financial crime and terrorism financing must align seamlessly with ethical standards. This serves as foundations for a resilient financial system that exudes strong professionalism, and credibility which can secure greater confidence from all stakeholders.

5. The second fundamental is focusing on the Building Blocks of a Culture of Excellence. The theme of ‘Trust Reinvented’ underscores the importance of building a culture of excellence in financial crime prevention and counter-terrorism financing. This culture relies on support from various perspectives. It commences with ethical regulators who stand as guardians of integrity, ensuring that financial institutions operate transparently within the AML/CFT framework, and adhere to ethical principles at all times. Cultivating a talented workforce, well-versed in the intricacies of financial crime prevention, would also be of paramount importance. Since Labuan’s inception in 1990, the Government has been mindful to keep Labuan clean and reputable, building an international financial centre that also has substance and essentially well governed, where along the way the term “offshore” that’s typically associated with tax haven, was dropped.

6. In this regard, initiatives that are geared towards nurturing and harnessing such talents would be critical in addressing the current and emerging challenges. At the same time, we must develop and implement robust systems; and employ enabling technologies such as Suptech and Regtech to boost organisational capabilities, generate comprehensive data analysis and enhance transactional monitoring in order to detect red flags and emerging risks related to financial crimes. Labuan FSA has this daunting task of supervising over 930 licensed and approved financial institutions in Labuan that deal mainly in wholesale and corporate business, so embarking on technology is not only beneficial for us, but it has become a necessity.

7. The third fundamental is Conformity to International Regulatory Standards. As a well-regulated jurisdiction, Malaysia champions the importance of adhering to international requirements as we strive to build a culture of integrity, transparency, and accountability. Compliance with these standards is not a mere ticking the box exercise; but rather it is an affirmation of our nation’s unwavering commitment to integrity and responsibility which are foundations of trust. In this context, Malaysia’s preparations for the upcoming Mutual Evaluation by FATF or the Financial Action Task Force on Anti-Money Laundering in 2024/2025 would be critical.

8. This assessment will provide an opportunity for Malaysia including Labuan IBFC, to showcase its comprehensive laws and robust regulations as well as effective initiatives to combat money laundering and terrorism financing. This will definitely reaffirm our dedication to uphold the highest standards of financial integrity – which not only reinforcing trust to our financial systems but also strengthen investors’ confidence on our country’s stability and credibility. The upcoming assessment will be based on the backdrop of the National Risk Assessment or NRA 2020 by the National Coordination Committee to Counter Money Laundering whose results in 2022 saw Labuan IBFC categorised as a low risk jurisdiction due to the controls, regulations and “no cash” policy in place. And so were the results of the Financial Sector Assessment Programme (FSAP) by the International Monetary Fund in 2013 on Malaysia including on Labuan IBFC’s prudential regulations that led us to having a strong legal and regulatory framework for the jurisdiction.

9. This indeed bodes well with our 5-year Strategic Roadmap 2022-2026 to grow the business and create solid niches for Labuan IBFC, namely in digital Islamic finance and captive insurance business. Modernising the regulatory framework is key and one of the thrusts moving forward in our vision and mission to maintain Labuan IBFC as a progressive and competitive international business and financial centre with a wide range of financial products and services offered by reputable financial institutions, and underpinned by a well-regulated financial framework.

10. In relation to the first niche, as we move towards developing fit-for-purpose regulations for digital financial business to grow, Labuan FSA is issuing a Securities Token Offering or STO regulation to spur the asset-backed digital fund raising business. This addresses the need not only by international investors and stakeholders that demand integrity and governance in regulatory framework, but issuers who want to tokenise or unitise their assets to raise fund cost effectively and in small bites, that is either Shariah or ESG compliant, or conventionally.

11. As regards the second niche focus, the coveted European Captive Awards conferred onto Labuan as the top and most commendable international captive domicile awards in 2021 and 2022 respectively is a testament to the Centre’s modern regulation and innovative structures. This is evidently a recognition of the efforts by the Government all these 33 years in building an international financial centre that has a high level of integrity, transparency and accountability.

12. I wish to iterate this – we have been and will always be committed to promoting professional excellence, ethics, and sustainability within our market. We believe that by embedding these principles into our organisational culture, nurturing talent, and adhering to international standards; we will not only elevate our jurisdiction’s visibility in the international arena, but also make substantial contribution to building a secured financial landscape characterised by trust, transparency, and accountability.

13. I trust that you will gain tremendously from the sessions in store for you today.

14. With that, I wish everyone productive sessions ahead.

Thank you.