27 April 2018
On 6 April 2018, Securities Commission Malaysia published a set of guidelines on implementation of targeted financial sanctions relating to proliferation financing for capital market intermediaries (“Guidelines”).
Recommendation 7 of the Financial Action Task Force (“FATF”) Standards requires countries to implement proliferation financing-related Targeted Financial Sanctions made under United Nations Security Council Resolutions (“UNSCRs”). Under this standard, countries are required to implement Targeted Financial Sanctions without delay to comply with UNSCRs relating to the prevention, suppression and disruption of the proliferation of weapons of mass destruction and its financing.
The term “proliferation financing” refers to the act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials (including both technologies and dual use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligations.
The Guidelines provide requirements for relevant capital market intermediaries regulated under the Malaysian Capital Market and Services Act 2007 to comply with the obligations imposed under the relevant laws as defined in the Guidelines. The intermediaries’ board of directors must ensure that a capital market intermediary regularly reviews its policies, procedures and controls to ensure they are effective and in line with these Guidelines and the relevant laws. The board of directors are also expected to keep abreast with international developments, including the relevant UNSCRs on weapons of mass destruction and FATF recommendations on proliferation financing.