KUALA LUMPUR (May 10): Bank Negara Malaysia (BNM) imposed a RM96,250 compound on Habib Jewels Sdn Bhd for non-compliance with the law on anti-money laundering and counter-terror financing.

The jeweller paid the compound, BNM said in a statement. The compound was issued for Habib Jewel’s failure to promptly submit suspicious transaction reports (STRs) to the central bank under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, BNM noted.

“Habib failed to promptly submit STRs on seven series of suspicious transactions by its customers even though the series of transactions matched Habib’s internal red flags,” BNM said. The alleged offence took place over one year and was detected by BNM during on-site examination, the central bank noted.

A compound is typically issued as an alternative punishment and serves as a settlement to avoid prosecution or further prosecution of an offence.

Under the law also known as AMLA, all reporting institutions are required to promptly flag any suspicious transactions to BNM. The requirement serves to mitigate the risk of the institutions from being used as a channel for money laundering, terrorism financing and other serious crimes.

Further, the report provides BNM and law enforcement agencies with valuable information and intelligence of potential criminal activities to support investigations.

The compound amount was determined in consideration of relevant aggravating and mitigating factors, including “the lack of reasonable care on the part of Habib” and “effective remedial actions taken by Habib to prevent recurrence of non-compliance,” BNM said.

Habib has since strengthened its STR reporting mechanism and the functions of its compliance officer, BNM added.