Anti Money Laundering & Counter Terrorism Financing Policy

1. Abbreviation & Definition

2. Statement of Commitment

2.1. CGM is a Non-Profit Organisation (“NPO”) registered under the Registry of Society, Malaysia.

2.2. Being an NPO, CGM is not categorised as a Reporting Institution under Schedule 1 of the Act. However, in order to become a model NPO that embraces the full spectrum of good governance, CGM is taking proactive and preventive measures by developing its own policy on AML/CFT.

2.3. This policy is a testament of CGM’s commitment in combating any form of money laundering and terrorism financing.

3. Money Laundering & Terrorism Financing

Definition

3.1. It is the policy of CGM to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities by complying with all applicable requirements under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“the Act”) and its implementing regulations.

3.2. Money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the proceeds appear to have derived from legitimate origins or constitute legitimate assets. Generally, money laundering occurs in three stages. Cash first enters the financial system at the "placement" stage, where the cash generated from criminal activities is converted into monetary instruments, such as money orders or traveller's checks, or deposited into accounts at financial institutions. At the "layering" stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin. At the "integration" stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses.  

3.3. Terrorist financing may involve the proceeds of criminal conduct, but rather an attempt to conceal either the origin of the funds or their intended use, which could be for criminal purposes. Legitimate sources of funds are a key difference between terrorist financiers and traditional criminal organizations. In addition to charitable donations, legitimate sources include foreign government sponsors, business ownership and personal employment. Although the motivation differs between traditional money launderers and terrorist financiers, the actual methods used to fund terrorist operations can be the same as or similar to methods used by other criminals to launder funds. Funding for terrorist attacks does not always require large sums of money and the associated transactions may not be complex.

4. Compliance Officer

4.1. CGM has designated a CO as the caretaker of the policy with full responsibility for the CGM’s AML/CTF program.

4.2. The CO must be competent, knowledgeable, financially stable, fit and proper to conduct the duties as CO without fear of favour.

4.3. The duties of the CO will include the following non-exhaustive list:-

1. Development.
2. Implementation.
3. Documentation.
4. Advisory.
5. Review.
6. Amendments.
7. Monitoring the CGM’s compliance with AML/CTF obligations.
8. Overseeing communication and training for employees.
9. Ensure that CGM keeps and maintains all the required AML/CTF records.
10. Shall be the reporting officer to any law enforcement.
11. The Compliance Officer is vested with full responsibility and authority to enforce the CGM’s AML/CTF program.

5. Effective Date

5.1. The effective date of the policy is 1^st of January 2025.

6. Review

6.1. The policy shall undergo a mandatory review annually before 31 December of each year.

6.2. For the purpose of review and enhancement, CGM may appoint an external party to conduct an independent review of the policy.

7. Circulation of Policy

7.1. The finalised and updated versions of the policy shall be circulated and made known to all employees and workers of CGM.

7.2. CGM also shall conduct a specific and comprehensive session/workshop with all the employees/workers to explain and describe in detail the contents of the policies and procedures.

7.3. The policies and procedures are also easily accessible by all employees/ workers of CGM via hardcopy as well as soft copy version.

7.4. Prior to the effective date of the Policy, CGM will conduct an extensive workshop in order to ensure a comprehensive awareness of the policy to all employees and/or workers of CGM.  

7.5. CGM will be conducting the awareness and training from time to time should there be any amendment to the policy.

8. Risk Assessment & Risk Register

8.1. CGM has developed its own risk register based on its extensive risk assessment exercise across its clientele, customers, strategic partners, and donors.

8.2. CGM also has identified all the risks and therefore CGM has constructed its own risk register. The risk register will be a document of reference for the purpose of the Policy and will be read together with the Policy.

8.3. The risk register may be reviewed and improvised to reflect the current situation at CGM.

8.4. For the avoidance of unnecessary risk, CGM will not enter into any collaboration with the following countries: -

1. Israel.
2. Islamic Republic of Iran.
3. Democratic People’s Republic of Korea.

9. Customer Due Diligence ("CDD")

9.1. Whenever CGM intends to establish a relationship with other parties, be it business relationship, collaboration, strategic partnership, including relationship with CGM’s donors, CGM shall conduct CDD for each of the parties or entities that CGM is engaging.

9.2. The CDD shall be conducted by CGM prior to any engagement or the establishment of any external relationship.

9.3. That execution of CDD shall not be restricted to the prior of any external engagement, but CGM shall conduct CDD whenever suspicions come to the knowledge of CGM and when CGM have any doubt as to the accuracy or adequacy of previously obtained information on a particular party including but not limited to suspicion in respect to any monetary transactions notwithstanding the amount or threshold.

9.4. The main objective of the CDD is to ascertain the source of funds/ wealth of CGM’s donors or collaborators.

9.5. In conducting the CDD, CGM will employ sanction screening by referring to the UNSC list and MOHA list.

9.6. In conducting the CDD, CGM will take a practical and realistic approach based on its donors database.

9.7. CGM will verify and be satisfied with the identity of the customer or beneficial owner through reliable and independent documentation, electronic data or any other measures that the reporting institution deem necessary, CGM shall seek to be provided with the following documents: -

For Individual

1. Identity card issued by Malaysian government.
2. Employee identity card issued by the relevant ministries and statutory bodies.
3. Foreign passport or identity card issued by the United Nations.
4. Documents issued by the Malaysian government.

For Legal Person (Corporate Entity, Organisation etc)

1. Name, legal form and proof of existence.
2. Company/business registration number.
3. Company’s profile.
4. Business and registered address.
5. To identify the authorised representative of the company/business.
6. Certificate of Incorporation.
7. Constitution (if applicable).
8. Directors’ Resolution (if applicable).
9. Partnership Agreement (if applicable).

Legal Arrangement

1. Name, legal form, and proof of existence.
2. Business and registered address.
3. Trust Deed.

Club, Society and Charity

1. Certificate of Approval.

10. Enhanced Due Diligence ("EDD")

10.1. In addition to the common due diligence exercise as per Clause 9 above, CGM will conduct a comprehensive an enhanced due diligence should CGM engages in the following situation:-

1. Persons or transactions involving a country identified as higher risk by FATF.
2. Persons or transactions involving higher risk countries for Money Laundering, Terrorism Financing, and corruption or subject to international sanctions.
3. Any other situation representing a higher risk of Money Laundering, Terrorism Financing including those that CGM have identified in the risk assessment.

10.2. The main objective of the EDD is for CGM to identify the source of funds/ wealth of its donors or collaborator (s).

11. Record Keeping

11.1. CGM will keep the information and records collected after each due diligence exercise that has been completed in a proper and well-organised manner.

Duration

11.2. CGM will retain the records for seven (7) years from the date of closure of the respective engagement.

Types of records

11.3. CGM will retain the following types of documents:-

1. The documents/ information collected through CDD, EDD, STR exercises.
2. Accounts and financial documents.
3. Human Resources Documents.

Manner of record keeping

11.4. CGM in managing its record keeping system, will employ the following measures:-

1. There are specific folders to keep the hardcopies of the documents.
2. In addition to the safekeeping of the hardcopies of the documents, CGM will also be keeping the records collected digitally as well.

11.5. The record keeping system may be revised and improvised accordingly should there be any requirement and urgency to do so in ensuring that CGM is able to supply any information to the relevant authorities upon query in a timely manner.

12. Ongoing Due Diligence ("ODD")

12.1. The CDD and EDD will not be a one-time exercise, CGM will be conducting an ODD if the current situation calls for it.

12.2. CGM will conduct ODD based on the following event: -

1. On the regular donors.
2. On the donation that exceeds the amount threshold as specified by the CGM’s Donation Threshold Policy.

13. Politically Exposed Person ("PEP")

Definition

13.1. CGM adopts the definition provided by the FATF.

13.2. Foreign PEPs: individuals who are or have been entrusted with prominent public functions by a foreign country, for example Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials. Below are some non-exhaustive examples:-

1. Heads of State or of government: Kings, Sultans, Presidents, Prime Ministers, Premiers, Chancellors, Secretaries of State.
2. Senior Politicians: Member of Parliaments, Ministers, Vice Ministers.
3. Senior Government, Judicial or Military Officials: Secretary Generals, Director-Generals, Directors, Secretaries, Military Generals, Superior Court Judges, District Officers.
4. Senior Executives of state-owned corporations: Chief Executive Officers, Chairmen, Board of Directors, Board of Trustees.
5. Important Political Party Officials: President, Secretary-General, Chairmen, Treasurers, Secretaries, Top Office Bearers.

13.3. Domestic PEPs: individuals who are or have been entrusted domestically with prominent public functions, for example Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials. Below are some non-exhaustive examples:-

1. Heads of State or of government: Kings, Sultans, Tuan Yang Terutama, Yang Di-Pertuan Besar, Prime Minister, Chief Ministers.‍
2. Senior Politicians: Member of Parliaments, Ministers, Vice Ministers, ADUNs, State EXCOs.‍
3. Senior Government, Judicial or Military Officials: Secretary Generals, Director-Generals, Directors, Secretaries, Military Generals, Superior Court Judges, District Officers.‍
4. Senior Executives of state-owned corporations: Chief Executive Officers, Chairmen, Board of Directors, Board of Trustees.‍
5. Important Political Party Officials: Presidents, Secretary-Generals, Chairmen, Treasurers, Top Office Bearers.

13.4. International organisation PEPs: persons who are or have been entrusted with a prominent function by an international organisation, refers to members of senior management or individuals who have been entrusted with equivalent functions, i.e. directors, deputy directors and members of the board or equivalent functions. Below are some non-exhaustive examples:-

1. United Nations and its agencies.

13.5. Family members are individuals who are related to a PEP either directly (consanguinity) or through marriage or similar (civil) forms of partnership.

13.6. Close associates are individuals who are closely connected to a PEP, either socially or professionally.

Identification of PEP

13.7. CGM will take proactive steps, such as assessing customers on the basis of risk criteria, risk profiles, the business model, verification of CDD information, and the institution’s own research and fact finding, to determine whether a customer or a beneficial owner is a foreign PEP.

13.8. If CGM identifies any PEP including but not limited to donors, collaborators the donation will be reported directly to the CO and the management.

14. Suspicious Transaction Reporting (STR)

Definition

14.1. Suspicious transaction refers to any transaction (including attempted or proposed), regardless of the amount that:

1. Appears unusual;
2. Has no clear economic purpose;
3. Appears illegal;
4. Does not commensurate with the customer’s profile or business activities;
5. Involves proceeds from an unlawful activity; or
6. Indicates that the customer is involved in money laundering or terrorism financing activities.

Reporting Mechanism

14.2. The assigned Compliance Officer will be responsible for the reporting mechanism.

14.3. All CGM employees regardless of the position shall report any suspicious activity to CO immediately upon finding of the said suspicious activity.

14.4. The Compliance Officer, upon receipt of the information from the informer, must complete the STR Form and submit it to the Financial Intelligence and Enforcement Department of BNM according to the CGM’s Reporting Work Process determined by the CO.

Confidentiality

14.5. For each STRs filed with the BNM are confidential and shall not be divulged to any party save for such disclosure required by the law.

14.6. CGM shall report the information as set forth below: -

1. information on the person conducting the transaction;
2. information on the account holder or beneficiary of the transaction;
3. details of the transaction, such as the type of products or services and the amount involved;
4. a description of the suspicious transaction or its circumstances; and
5. any other relevant information that may assist the Financial Intelligence and Enforcement Department in identifying potential offences and individuals or entities involved.