NAJIB & CO STOLE & THE GLOBAL BANKING SYSTEM LET HIM: ‘MALAYSIA IS A VICTIM’ – BANK NEGARA CHIEF TRIES TO DOWNPLAY ACCUSATIONS WEAKNESSES IN LOCAL SYSTEM PAVED WAY FOR 1MDB DEBACLE – BUT DID LOCAL BANKS LIKE AMBANK & BANK NEGARA ITSELF STAND FIRM ENOUGH TO BLOCK NAJIB WHEN HE WAS IN POWER

THE 1Malaysia Development Bhd (1MDB) scandal is not just a Malaysian affair, but a case of money laundering that implicates the banking institutions of other countries, said Bank Negara Malaysia governor Nor Shamsiah Mohd Yunus.

In an interview with The Star newspaper, she said the entire saga has cast a spotlight on the weakness of Malaysia’s financial institutions and that of other countries.

“One can even say that Malaysia is a victim because the other banking institutions involved did not implement the necessary controls to mitigate the risks of them being used as a conduit to launder money.”

Authorities in at least six countries are investigating alleged graft and money laundering at 1MDB, set up by former prime minister Najib Razak in 2009.

Najib is currently facing seven charges tied to criminal breach of trust, money laundering and abuse of power involving SRC International, a former subsidiary of 1MDB, and how its funds were transferred into his private bank accounts.

Malaysia is currently a member of the Financial Action Taskforce, which is an inter-governmental body that creates standards to ensure countries have effective anti-money laundering and combating the financing terrorism framework and practices in place.

But Shamsiah said more still needs to be done on investigation and prosecution of high risk crimes such as corruption, smuggling and drug trafficking.

“At home, the bank is supportive of the critical institutional reforms that are being carried out now following the 1MDB incident.

“The Malaysian Anti-Corruption Commission is now pursuing greater number of investigations and the setting up of the National Centre for Governance, Integrity and Anti-Corruption reinforces the government commitment to strengthening governance and combat corruption.”

She said other measures include the establishment of the National Anti-Financial Crime Commission to ensure greater coordination among agencies in the investigation of financial crimes, as well as the setting up of a cabinet committee on corruption.

The central bank is targeting to release a public consultation paper by the third quarter of this year, to gather feedback on the potential implementation of cash transaction limit.

THE MALAYSIAN INSIGHT

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