Offshore accounts still OK but due diligence a must, says Tengku Zafrul
KUALA LUMPUR: Following the Pandora Papers’ exposé, finance minister Tengku Zafrul Aziz says any individual or entity who wish to open offshore accounts is allowed to do so, but is still subject to fulfilling their due diligence. Tengku Zafrul, who had also been linked to the offshore dealings revealed in…
KUALA LUMPUR: Following the Pandora Papers’ exposé, finance minister Tengku Zafrul Aziz says any individual or entity who wish to open offshore accounts is allowed to do so, but is still subject to fulfilling their due diligence.
Tengku Zafrul, who had also been linked to the offshore dealings revealed in the Pandora Papers, said the issue involved the leak of confidential records of 14 offshore service providers that formed shell companies, trusts or other entities for individuals or companies in countries with weak financial legislation.
“However, we do not have such weaknesses,” he told the Dewan Rakyat, in response to a question from Lim Guan Eng (PH-Bagan).
He said Malaysia’s finance sector was regulated by Bank Negara Malaysia (BNM) through the Financial Services Act 2013 (Act 758) and Islamic Financial Services Act (Act 759).
Meanwhile, offshore financial activities are regulated by the Labuan Financial Services Authority (Labuan FSA) through the Labuan Financial Services and Securities Act (Act 704) and Labuan Islamic Financial Services and Securities Act (Act 705).
“Under current provisions, any individual can open an account with any licensed banks, including offshore accounts,” Tengku Zafrul said.
“However, every customer that opens accounts in licensed banks regulated by BNM or offshore accounts in banks regulated by Labuan FSA must go through a customer due diligence process.
“This is required by the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act and subsidiary legislations.”
Lim had asked the finance minister if Putrajaya planned to launch any efforts to recover the money stored offshore, said to be in the trillions, since it was said that the government lacked money to channel aid to the people.
The Pandora Papers data leak involved 2.94 terabytes of data provided anonymously to the International Consortium of Investigative Journalists (ICIJ), made up of nearly 12 million documents and other records from 14 offshore service providers that set up and managed shell companies and trusts in tax havens around the world.
A number of prominent Malaysians had been linked to the offshore dealings, including Tengku Zafrul, who appeared as the director of Capital Investment Bank (Labuan) Ltd, a boutique bank incorporated in the offshore jurisdiction of Labuan.
However, an aide to the minister had explained that he was no longer the director of the offshore company.
Other Malaysians include the family of former finance minister Daim Zainuddin and fugitive financier Low Taek Jho, or Jho Low. — Free Malaysia Today