Malaysia to update law again

Malaysia has more than 30,000 businesses that fall outside the financial services area, and monitoring those is a constant headache, says the central bank, Bank Negara Malaysia.

Malaysia has unique challenges - for example, it has a population of only 20 million (although migrant workers swell that to about 23 million).

Yet is covers a geographical area greater than mainland Britain - and in addition to the two main land masses on the Malay Peninsula and northern Borneo, it has hundreds of island communities. Around the country, village - or kampung - life is commonplace. Although Kuala Lumpur, Georgetown in Penang and Johor Baru in the south are large towns, even the next largest towns are, by the standards of many countries, small.

Distances are considerable and although the mainland has an excellent road network. tt's a two hour flight from Kuala Lumpur to Labuan, Malaysia's offshore financial base, for example.

The northern border with Thailand is remarkably porous as workers from one side live on the other. There are substantial numbers of foreign workers as maids, construction and hospitality workers - and a not insignificant number of Europeans, a number of which live in Malaysia but work remotely from their offices in London and Scandinavia, for example.

Bank Negara intends to put more responsibility onto self-regulatory organisations such as The Malaysian Bar Council and to take steps to more closely supervise the recently liberated remittances business as well as to improve its detection of cash couriers. Informal remittances via money changers - which are illegal under Malaysian law - will also be a point of focus.

BNM warned that, as their management of the issue improves, money launderers will move outside the financial sector, hinting at the risk of increased trade-based laundering.