Previous sanctions against Malaysian-based firms worked: US official

INTERVIEW | The sanctions imposed last December on four Malaysia-based companies accused of aiding Iran’s drone production have been impactful, said US Treasury Terrorism and Financial Intelligence Undersecretary Brian Nelson.

Speaking at an interview with selected Malaysian media including Malaysiakini, Nelson declined to be drawn on what the worst-case scenario for Malaysia itself could be.

“This trip is about alerting Malaysia to the concerns that we have and we are working with them to address those concerns.

“Malaysia clearly doesn’t want its financial institutions and its shipping industry to be abused by rogue nations and outside actors. 

“We don’t want that because of the central importance of Malaysia, both as a trading nation and as a financial centre, and given America’s significant business presence here,” he said.

Nelson added that his department seeks to work with partners because they find that is the most effective way to address challenges relating to money laundering or the financing of terrorism.

“But at the end of the day, we also are always prepared to use our tools and authority that the Treasury has to address those challenges as well. 

“But the first order of business is working with partners to, again, alert them to the risks that we perceive and see, and have a frank and open discussion about those risks,” he said.

Disruptive to business

Nelson added that the sanctions imposed on the four companies were aimed at encouraging behaviour change and that if such a change took effect, the companies involved could appeal to be struck off the sanctions list.

US Treasury Terrorism and Financial Intelligence Undersecretary Brian Nelson

“Sanctions would see money in US accounts or accounts with a US correspondent blocked or frozen, thereby preventing these companies from accessing funds.

“And it’s very disruptive to your ability to do cross-border business because it is very, very difficult to avoid a touch point with the US financial system,” he said.

“From that perspective, we think that they are impactful but I think the more impactful thing at the end of the day is the partnership with jurisdictions and the capacity to make anti-money laundering and countering the financing of terrorism ‘regimes’ more resilient,” he added.

Nelson is in Malaysia and Singapore on a four-day visit to conduct ongoing discussions with key partners on the importance of a unified global response to critical threats. - Mkini