BNM slaps Merchantrade Asia with RM29,000 penalty

 The central bank cites Merchantrade’s oversight of sanctions screening procedures and gaps in updating its sanctions database.

Bank Negara Malaysia said Merchantrade has since strengthened its processes by subscribing to a commercial database service. (Facebook pic)

KUALA LUMPUR:

 Bank Negara Malaysia has imposed RM29,000 in administrative monetary penalties on Merchantrade Asia Sdn Bhd and RM6,000 on JAGS Money Sdn Bhd for breaching the Money Services Business Act 2011.

“The non-compliances are due to Merchantrade Asia’s oversight of sanctions screening procedures, and gaps in updating its sanctions database upon the publication of the Domestic List,” BNM said in a statement.

Merchantrade Asia, as a reporting institution, is required to conduct sanctions screening on existing, potential or new customers against the Domestic List and United Nations Security Council Resolutions (UNSCR) List as part of due diligence processes.

It also has to ascertain that potential matches with the UNSCR List or Domestic List are true matches to avoid false positives.

“In response, Merchantrade has since strengthened its processes by subscribing to a commercial database service to ensure it receives updates on the sanctions list in a timely manner, and that staff and agents are provided with regular on-the-job training to improve compliance,” the central bank said.

On the other hand, JAGS Money’s non-compliance resulted from failure to promptly update the sanctions database upon the publication of the Domestic List and failure to conduct sanctions screening on new customers against the list. - FMT