Labuan Financial Services Authority published opening remarks by Deputy Director-General Syahrul Imran Mahadzir calling on Labuan financial institutions to move beyond checklist-based compliance and demonstrate that risks are understood, controls work and red flags are escalated promptly. He emphasized that technology, including artificial intelligence, regulatory technology and blockchain analytics, should strengthen detection without replacing human judgment. The remarks identified four priorities: deeper customer understanding and enhanced due diligence for higher-risk relationships, timely intelligence-led transaction monitoring, controls proportionate to each institution’s business model and risk profile, and a balance between robust compliance and legitimate business growth. Particular attention should be given to evolving ownership, source-of-funds and digital asset exposures, as well as continuous sanctions screening and scrutiny of beneficial ownership structures. Labuan FSA will continue applying proportionate, risk-based supervision, supporting responsible innovation and providing guidance and industry engagement. Boards and senior management remain responsible for risk culture, compliance resources and control effectiveness. The remarks also noted that Malaysia’s 2025 Financial Action Task Force mutual evaluation rated 24 recommendations compliant and 16 largely compliant, and moved the country from enhanced follow-up to regular follow-up.

Original source Back to tracker