Wednesday, April 30, 2008

Anti-Money Laundering Act and charitable money

I think it is good that we get acquinted with this act which is not really a new law as it had been around for several years. It's called "Anti Money Laundering Act (Act 613) 2001" and commonly applies to banks, insurance companeis and other financial institutions where people "park" their money. It is in these institutions that these "black money" are able to be "washed" and come out as "clean money" so to speak, hence the term "money laundering".

Even though religious centers and temples or some other charitable organisations do not (except for perhaps, those that gives scholarships) act like the financial institutions in giving back money or deposits to the originators (or to others), still in a sense "black money" could be donated ala "Robin Hood style" and in the process stolen/"black money" could be turned into a supposedly good cause.

Think about this issue this way: is it okay to receive money for our temple from money obtained from child trafficking? from illegal sales of weapons? from drug trafficking? I am not here to provide right or wrong answers, but only to enable you to understand the purpose of this act in relation to charitable funds, irrespective of whether it is religious center or not.

Practical-wise, it is not easy to know whether any money is illegal or not. Anyway, supposing the criminal is sincere in donating - even if the money is "dirty money", are you going to just refuse the donation? It is not easy to handle such cases, because if we refuse, we would deprive the criminals and their victims of creating good imprints and affinity with the buddha dharma. But by receiving the money, it would mean we are indirectly supporting such criminal acts. Maybe, a good way would be to receive the money on condition that the criminal repent his wrong ways. But... this is easier said than done! But we do not go around and suspecting every money we receive. The Hokkiens say: "Chaik Pa Seoh Eng", meaning in Malaysian-style spoken English "You think I am so free-ah?" . We only do this if we have valid reason to suspect the money received is from unlawful activity.

Anyway, the below paragraphs are extracted from the Act. I am not an expert on this Act but the little that I know, I share them here. Proper guidance should be referred to our respective countries' central banks. For Malaysia, it is Bank Negara Malaysia.

2. (1) This Act shall apply to any serious offence, foreign serious offence or unlawful activity whether committed before or after the commencement date.
(2) This Act shall apply to any property, whether it is situated in or outside Malaysia.

Further Para 2 definitions:
“money laundering” means the act of a person who—
engages, directly or indirectly, in a transaction that involves proceeds of any unlawful activity;
acquires, receives, possesses, disguises, transfers, converts, exchanges, carries, disposes, uses, removes from or brings into Malaysia proceeds of any unlawful activity; or
conceals, disguises or impedes the establishment of the true nature, origin, location, movement, disposition, title of, rights with respect to, or ownership of, proceeds of any unlawful activity,

as may be inferred from objective factual circumstance, the person knows or has reason to believe, that the property is proceeds from any unlawful activity; or
in respect of the conduct of a natural person, the person without reasonable excuse fails to take reasonable steps to ascertain whether or not the property is proceeds from any unlawful activity;

Offence of money laundering.
4. (1) Any person who—
engages in, or attempts to engage in; or
abets the commission of,
money laundering, commits an offence and shall on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both.
(2) A person may be convicted of an offence under subsection (1) irrespective of whether there is a conviction in respect of a serious offence or foreign serious offence or that a prosecution has been initiated for the commission of a serious offence or foreign serious offence.

This AML Act is not a Malaysian law only as many countries also have similar laws being enforced in other countries.

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