Malaysia Country Summary

FATF Status

Malaysia is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Malaysia was undertaken in 2018. According to that Evaluation, Malaysia was deemed Compliant for 20 and Largely Compliant for 18 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 4 of the Effectiveness & Technical Compliance ratings.

Crime and corruption remain significant challenges in Malaysia, with the government taking steps to combat these issues through the establishment of the Malaysian Anti-Corruption Commission and various legal frameworks. Despite these efforts, corruption is still pervasive, undermining public trust and allowing organized crime, including human trafficking and drug smuggling, to flourish, while law enforcement agencies face accusations of misconduct and corruption themselves.

Malaysia's economy is characterized by a strong emphasis on foreign direct investment (FDI), which has significantly contributed to its growth, with approved investments reaching $69.5 billion and actual foreign investments at $39.7 billion in 2023. The nation's strategic location, skilled workforce, and advanced ICT infrastructure enhance its investment climate, particularly in sectors such as medical devices, semiconductors, and renewable energy. Despite moderate economic growth of 3.7% in 2023, driven by resilient domestic demand and tourism recovery, the government is implementing reforms to improve competitiveness, address labor issues, and foster sustainable development, while also navigating political pressures related to social issues.