Legal Bulletin
A summary of developments in the law
At a glance
Competition
Latest developments in the competition law scene in Malaysia
3
Corporate
Anatomy of a limited liability partnership in Malaysia
5
Tax
Goods and Services Tax
9
General
Anti-Money Laundering and Anti-Terrorism (Amendment) Act
2014: Scope of AMLATFA extended to “proceeds of an
unlawful activity”
11
Awards
Rahmat Lim & Partners recognised as an Asian Rising Star
by Leaders League
15
Rahmat Lim & Partners voted Asian-MENA Counsel InHouse Community Firm of the Year 2014
15
Click here for Table of Contents
Vol 2 No 2 November 2014
RAHMAT LIM & PARTNERS
In this issue
Competition
Latest developments in the competition law scene in Malaysia
3
Corporate
Anatomy of a limited liability partnership in Malaysia
5
Tax
Goods and Services Tax
9
General
Anti-Money Laundering and Anti-Terrorism (Amendment) Act
2014: Scope of AMLATFA extended to “proceeds of an unlawful
activity”
11
Publications
Getting the Deal Through: Government Investigations 2015 Malaysian chapter
13
Banking Regulation: Malaysian chapter
14
IBA Takeover Guide 2014: Malaysian chapter
14
Deals
Editorial Team
Azman bin Othman Luk
Azlynne Amanda Yuen
Syahira Rahim Hamzah
RM812 million acquisition of stake in AmLife Insurance Berhad
and AmFamily Takaful Berhad
14
EUR 209 million acquisition of İstanbul Sabiha Gökçen
Uluslararası Havalimanı Yatırım Yapım ve İşletme A.Ş. and
LGM Havalimanı İşletmeleri Ticaret ve Turizm A.Ş.
15
Awards
The contents of the Legal
Bulletin are intended to provide
general information. Although we
endeavour to ensure that the
information contained herein is
accurate, we do not warrant its
accuracy or completeness or
accept any liability for any loss
or damage arising from any
reliance thereon. The information in
this Legal Bulletin should not
be treated as a substitute for
specific legal advice concerning
particular situations. If you
would like to discuss the
implications of these legal
developments on your business
or obtain advice, please do not
hesitate to approach your usual
contact at Rahmat Lim &
Partners or the editor of the
Legal Bulletin,
Azman bin
Othman Luk (+603 2299 3809 or
azman.luk@rahmatlim.com).
Rahmat Lim & Partners recognised as an Asian Rising Star by
Leaders League
15
Rahmat Lim & Partners voted Asian-MENA Counsel In-House
Community Firm of the Year 2014
15
Legal Bulletin November 2014
2
Competition
Latest developments in the competition law scene in
Malaysia
Since the coming into force of the Competition Act 2010 (the “Competition
Act”) in 2012, the Malaysia Competition Commission (the “MyCC”) has
been actively conducting investigations into various industries as well as
introducing new guidelines. This article provides a summary of recent
developments in the competition law scene in Malaysia.
Guidelines on financial penalties and leniency regime
The MyCC has provided further guidance on the application of the
Competition Act in the form of new guidelines on financial penalties and
a leniency regime.
Guidelines on Financial Penalties
The Guidelines on Financial Penalties set out a list of factors which may be
taken into consideration by the MyCC in determining the amount of financial
penalty that will be imposed in a particular case, and explain how these
factors may be taken into account on a case-by-case basis. As an example,
aggravating factors may include the role of the enterprise as an instigator or
leader, or the involvement of board members or senior management in the
infringement. On the other hand, factors that may mitigate an enterprise’s
liability include the degree of fault and level of co-operation by the enterprise
in an investigation.
Guidelines on Leniency Regime
An enterprise involved in a cartel may be granted a 100% reduction in financial
penalty if it admits its involvement in a cartel and provides information to or
cooperates with the MyCC under section 41 of the Competition Act.
The Guidelines on Leniency Regime set out the relevant procedure for
leniency applications, including the information to be provided to the MyCC.
In addition, the Guidelines also introduce a “marker” process, under which a
potential applicant may ask for a “marker” in order to preserve its priority for
the receipt of leniency whilst an application is being prepared.
Potential leniency applicants will be able to contact the leniency officer
appointed by the MyCC to enquire as to the availability of leniency with
respect to a situation, and to request for a “marker”.
Liner shipping block exemption order
The MyCC has granted a conditional block exemption for vessel sharing
agreements and voluntary discussion agreements in respect of liner shipping
services, following an application by the Malaysia Shipowners Association,
the Shipping Association of Malaysia and the Federation of Malaysian Port
Operators Council.
The Competition (Block Exemption for Vessel Sharing Agreements and
Voluntary Discussion Agreements in respect of Liner Shipping) Order 2014
(the “Order”) came into force on 7 July 2014. Subject to certain conditions,
vessel sharing agreements and voluntary discussion agreements between
liner operators (the “Agreements”) have been exempted from section 4 of
the Competition Act for a period of three years.
Legal Bulletin November 2014
3
Existing Agreements are to be filed with the MyCC within two months from
7 July 2014. New Agreements, entered into after 7 July 2014, are to be filed
with the MyCC within two weeks from the date of signing. Similarly, any
variations to the Agreements are to be filed with the MyCC within two weeks
from the date of the variation or amendment.
For the full text of the Order from the MyCC website www.mycc.gov.my,
please click here.
Final decision on MAS and AirAsia collaboration
On 31 March 2014, the MyCC issued its final decision against Malaysian
Airline System Berhad (“MAS”), AirAsia Berhad and AirAsia X Sdn. Bhd.
(collectively “AirAsia”) for infringing section 4(2)(b) of the Competition Act.
MAS and AirAsia were found to have had the intention to share market in
relation to certain sectors and categories of aviation services, by entering
into the Comprehensive Collaboration Framework (the “Collaboration
Agreement”). The Collaboration Agreement provided that each airline
would focus on their market area and that they would not enter into the areas
specifically allocated to their competitor. The Joint Collaboration Committee
established by the parties also served as an avenue for the parties to
enforce the sharing of markets pursuant to the Collaboration Agreement.
The MyCC imposed a financial penalty of RM10 million each on MAS and
AirAsia, which was less than 10% of their respective total turnovers in
respect of the affected routes during the infringement period (i.e. between
January and April 2012). In determining the financial penalties, the MyCC
took into account mitigating factors such as cooperativeness of the parties in
providing data and information, and the voluntary action taken by the parties
to remove the reference to routes and market focus stated in the
Collaboration Agreement.
Proposed decisions and interim measures issued by MyCC
Abuse of dominant position by Megasteel
On 1 November 2013, the MyCC issued its Proposed Decision against
Megasteel Steel Sdn. Bhd. (“Megasteel”) for abusing its dominant position.
Megasteel, which is dominant in the hot rolled coil (the “HRC”) market
(upstream segment), is also active in the production of cold rolled roil
(the “CRC”) market (downstream segment). It was found that Megasteel’s
selling price for its HRC was disproportionate to the selling price of its CRC.
Although Megasteel’s monthly prices for its CRC were all lower than those
charged by its competitors in the CRC market, Megasteel prices could not
be considered as competitive as the monthly margins (between the CRC
and HRC prices earned by Megasteel) were insufficient for the recovery of
its monthly costs of transforming the HRC into CRC. The MyCC concluded
that this amounted to a form of margin squeeze, which had the effect of
hindering, if not lessening competition in the downstream market, resulting
in a breach of section 10(1) of the Competition Act. The MyCC proposed to
impose a financial penalty of RM4.5 million on Megasteel.
Price fixing by ice manufacturers
A total of 26 ice manufacturers were found to have infringed section 4(2)(a)
of the Competition Act by entering into an agreement to fix the selling prices
of edible tube ice and block ice in Kuala Lumpur, Selangor and Putrajaya.
The MyCC first issued interim measures on 21 January 2014 to all the 26 ice
Legal Bulletin November 2014
4
manufacturers to desist from acting in accordance with their price-fixing plan,
and subsequently proposed a financial penalty totalling RM283,600 to be
imposed on the manufacturers.
Price fixing by confectionery and bakery products producers
The MyCC has issued a proposed decision on 30 September 2014 to impose
a total financial penalty of RM439,000 against 24 enterprises, who are
members of the Sibu Confectionery and Bakery Association (the “SCBA”),
for agreeing to increase the prices of confectionery and bakery products by
10 to 15% in the Sibu area.
Members of the SCBA had agreed to increase their price during an annual
general meeting held by the SCBA, and their agreement was publicised and
reported in several major newspapers.
MyCC accepts undertaking by PMLOA
The Central Committee Members of the Pan-Malaysia Lorry Owners
Association (the “PMLOA”) were found to have infringed section 4(2)(a)
of the Competition Act by engaging in a price fixing arrangement. Instead
of imposing a financial penalty on the PMLOA, the MyCC requested an
undertaking from the PMLOA, which was given and accepted by the MyCC
on 7 May 2014.
For further information, please
contact:
Raymond Yong
+603 2299 3810
raymond.yong@rahmatlim.com
The PMLOA undertook to issue and publish a joint statement in major
newspapers to apologise for its price-fixing behaviour, to circulate a copy
of the undertaking to each of its members, and to ensure that the PMLOA
would not engage in any anti-competitive behaviour in the future.
Back to Contents Page
Corporate
Anatomy of a limited liability partnership in Malaysia
In April of this year, the Deputy Minister of Domestic Trade, Cooperatives
and Consumerism, Datuk Seri Ahmad Bashash Md Hanipah, informed the
Dewan Negara that 1,981 limited liability partnerships (“LLPs”) had been
registered by the Companies Commission of Malaysia. The latest figure
showed “encouraging response from the business community” since the
Limited Liability Partnerships Act 2012 (the “LLP Act”) came into force on
26 December 2012.
An LLP is an alternative way in which a lawful business with a view to profit
or carrying on a professional practice can be organised in Malaysia. Prior to
the introduction of the LLP Act, it was only possible to establish an LLP in
Labuan under the Labuan Limited Partnerships and Limited Liability
Partnerships Act 2010.
An LLP is a hybrid of a partnership and a company, combining the attributes of
a conventional partnership with the safeguards associated with incorporating
a limited liability company. For the purpose of this article, a “company” is a
reference to a limited liability company incorporated under the Companies Act
1965. An LLP can offer certain attractive advantages as compared to more
traditional forms of carrying on business in Malaysia, including the following:
Legal Bulletin November 2014
5

Separate legal entity: An LLP is a body corporate with a separate legal
personality from its partners, unlike a conventional partnership (the latter
being treated as one with and not independent from its partners). An
LLP also has the usual advantages of a company i.e. continuing legal
existence (also known as perpetual succession), unlimited capacity, and
the power to sue, be sued and generally own and dispose of assets in its
own name. Any changes in the composition of the LLP partners will not
affect the existence, rights or liabilities of the LLP.

Limited liability: An LLP partner, unlike a partner in a conventional
partnership, is not jointly and severally liable with the other partners for
all the debts and obligations of the LLP. Instead, any obligation of an
LLP (whether arising in contract, tort or otherwise) is solely the obligation
of the LLP. The LLP will not, however, be liable for any wrongful act or
omission of any partner acting without the authority of his co-partners or
outside of the ordinary course of business.

Flexibility in management: Although it assumes the guise of a
corporation, an LLP is internally managed as a conventional partnership.
An LLP is not subject to strict capital maintenance rules and share
capital, restrictions on financial assistance or rigid corporate governance
practices; all of which are imposed on private limited companies by
statute and a breach of which may result in financial penalties or (in
some cases) criminal liability on the part of the company’s directors.
By contrast, LLP partners may agree amongst themselves as to the
decision making process and management of the LLP which may be
detailed in the partnership agreement from the outset. The LLP partners
must, however, appoint at least one compliance officer from amongst
themselves or a qualified secretary whose role is to be answerable for
all acts of the LLP, and who will be personally liable for all administrative
penalties imposed on the LLP.

LLP as a contracting entity: As is the case with a company, it is an
LLP itself (and not its partners) that will deal and contract directly with
any third party. As a result, the LLP will be liable for all obligations and
liabilities arising from the contract.

Favoured by professional bodies: In the past, a partnership was the
only option for many professionals (including lawyers and accountants)
wishing to practice their profession in tandem with other professionals
in the same field. With the growth in size of professional practices
however, it is no longer tenable for co-partners to solely rely on each
other practising a “high degree of skill and care”’ as a safeguard against
potentially negligent conduct. In many other jurisdictions, including
Singapore and the UK, more professionals have converted or are
converting their partnerships into an LLP to effectively shield themselves
from the negligence or impropriety of their co-partners. The LLP Act,
however, prohibits the establishment of multi-disciplinary professional
LLPs in Malaysia (as an example, a lawyer and an accountant would not
be permitted to jointly form and be partners of the same LLP).
A brief comparison of the key differences between an LLP and other
common forms of business organisation in Malaysia are set out below:
Partnership
Principal
governing
legislation
Partnership Act 1961
and Registration of
Businesses Act
1956.
Legal Bulletin November 2014
LLP
LLP Act and
Limited Liability
Partnership
Regulations.
Company
Companies Act and
Companies
Regulations 1966.
6
Partnership
LLP
Company
Capital
contribution
Partners’
contribution.
Partners’
contribution.
Share capital.
Term
Registration is
renewable for a
period not exceeding
five years.
Exists for an
indefinite period
until wound up
voluntarily or by
order of court, or
struck off as a
defunct LLP.
Exists for an
indefinite period until
wound up voluntarily
or by order of court,
or struck off as a
defunct company.
Dissolution by
certain terminating
events (e.g.
expiration of fixed
term, notice,
bankruptcy or death
of any partner) or by
the court.
Legal status
No legal personality
of its own.
Body corporate.
Exists as a legal
person separate
from its partners.
Body corporate.
Exists as a legal
person separate
from its members.
Minimum /
Maximum
number
Minimum of two and
maximum of 20
partners (natural
persons). No
maximum limit for
professional
partnerships.
Minimum of two
partners (natural
persons or body
corporates). No
maximum limit.
Minimum of two
individual members
or one corporate
member. No
maximum limit.
Compliance
officer /
Director
No statutory
obligation to appoint
a compliance officer.
At least one
compliance officer
who is a natural
person of full age
and capacity, is
a citizen or
permanent resident
of Malaysia and
ordinarily resides
in Malaysia. The
compliance officer
may be appointed
from amongst the
partners or be a
person qualified to
act as a secretary
under the
Companies Act.
No statutory
obligation to appoint
a compliance officer
but there is an
obligation to appoint
a minimum of two
directors, each being
a natural person of
full age and capacity
and ordinarily
resident in Malaysia.
Every partner may
take part in the
management of the
partnership
business.
The business of a
company is
managed by or
under the direction
of the directors.
A compliance
officer will be
personally liable for
all penalties
including any
administrative
penalty imposed on
the LLP unless he
can prove that he is
not liable.
Liability
Every partner is
jointly and/or
severally liable for
the obligations of the
partnership that is
incurred while he is
a partner.
Legal Bulletin November 2014
Partners not liable
for obligations of
the LLP in contract,
tort or otherwise.
Members not liable
for debts and
liabilities incurred by
a company except
on a winding up, to
the extent provided
in the Companies
Act.
7
Partnership
Discharge of
liabilities
LLP
Unlimited liability for
partners.
Limited liability for
partners.
Limited liability for
members.
Liabilities are met
out of partnership
property and/or
property of the
partners (depending
on whether those
are joint or separate
debts).
Liabilities of the
LLP are met out of
the property of the
LLP.
Liabilities of the
company are met
out of the property of
the company.
Contract
with third
parties
Third parties
contract with the
partners.
Third parties
contract with the
LLP.
Third parties
contract with the
company.
Liability for
negligence
Partnership is liable
for wrongful act or
omission of a partner
acting in the ordinary
course of the
business of the
partnership, or with
the authority of his
co-partners.
LLP is liable for
wrongful act or
omission of a
partner acting in
the course of the
business of the LLP
or with its authority.
Company could be
vicariously liable for
torts committed by
its agent, acting
within the agent’s
scope of
appointment or
personally liable for
negligence of
persons
representing its
directing mind and
will.
Every partner is
liable jointly and
severally for the
partnership’s liability
for a partner’s
wrongful act or
omission that arises
while he is a partner.
A partner is
personally liable for
his own wrongful
act or omission but
not those of other
partners.
Constitutive
document
and
lodgement
Partners are not
obliged to enter into
a partnership
agreement.
Partners may enter
into a limited
liability partnership
agreement or in the
absence of such an
agreement, the
provisions of the
Second Schedule
of the LLP Act will
apply to the LLP.
Company is obliged
to have
Memorandum and
Articles of
Association (“M&A”)
that are binding on
the company and its
members. The M&A
are required to be
lodged with the
Registrar of
Companies and are
available to the
public for inspection.
Distribution
of profits
Unless otherwise
agreed among the
partners, partners
are entitled to share
equally in the capital
and profits of the
partnership.
Unless otherwise
agreed in the LLP
agreement,
partners are
entitled to share
equally in the
capital and profits
of the LLP.
Distribution to
members by way of
dividend (either in
cash or otherwise,
e.g. shares).
Dividends can be
paid only out of
profits. Articles of
association of a
company prescribe
when and how
dividends are to be
declared and paid.
Conversion
to LLP
Permitted.
For further information, please
contact:
Azman bin Othman Luk
+603 2299 3809
azman.luk@rahmatlim.com
Moy Pui Yee
+603 2299 3880
moy.puiyee@rahmatlim.com
Company
‒
Permitted.
Back to Contents Page
Legal Bulletin November 2014
8
Tax
Goods and Services Tax
Following the Budget 2014 announcement by the Prime Minister on
25 October 2013, Malaysia’s goods and services tax (“GST”) will be
implemented pursuant to the Goods and Services Tax Act 2014 (the “Act”)
with effect from 1 April 2015, at the rate of 6% and with a 17-month transitional
period. It has therefore become imperative for all Malaysian businesses to
consider the impact of GST and prepare for its implementation. The Royal
Malaysian Customs Department (the “RMC”) has made it a requirement for
all business operators to register for GST licensing between the period of
1 June 2014 and 31 December 2014. The lead-in period to the implementation
date of 1 April 2015 is condensing rapidly, which has made it a matter of great
urgency for all business operators to ensure they are adequately prepared.
What is GST?
GST is a broad-based consumption tax levied on the supply of taxable goods
and services made in the course or furtherance of any business by a taxable
person in Malaysia, and the importation of goods and services into Malaysia.
The GST is a replacement for the existing sales tax and service tax, which
are administered by the RMC.
Sales Tax Act 1972 and Service Tax Act 1975 repealed
With effect from 1 April 2015, the Malaysian Government will be abolishing
the current sales tax (of either 5% or 10%, depending on the goods sold) and
service tax (of 6%). Sales tax and service tax will cease to be charged and
tax licensees will cease to be registered in respect of these two taxes under
the Sales Tax Act 1972 and Service Tax Act 1975. The facilities and
exemptions provided under the sales tax and service tax system will
thereafter become redundant.
The Guide on Transitional Rules (the “Guide”), which was revised and
reissued by the RMC on 28 October 2013, provides that manufacturers,
wholesalers, retailers and service providers with a taxable turnover of
RM500,000 or more annually must register for the implementation of GST
by 31 December 2014. The application may be undertaken manually in the
prescribed form or online at www.gst.customs.gov.my. Failure to so register
will constitute an offence, punishable upon conviction with a maximum fine of
RM20,000.
How will GST work?
GST will be applied at every stage of the supply chain on taxable supplies.
It is a form of value added tax as the tax will be charged at stages by the
intermediaries in the production and distribution process, resulting in the tax
burden being passed to the consumer. The Act defines the term “taxable
supplies” to mean supplies of goods or services which are standard-rated
supply and zero-rated supply, with an exclusion for an “exempt supply”.

Standard-rated supplies (section 10 of the Act): Standard-rated
supplies are taxable supplies of goods and services which will be subject
to GST at the standard rate of 6%. A taxable person who has been
registered under the Act will be required to collect GST on the supply
and will be eligible to claim input tax credit on his business inputs in
making taxable supplies.
Legal Bulletin November 2014
9

Zero-rated supplies (section 17 of the Act): A zero-rated supply is
defined to mean any supply of goods and services determined to be a
zero-rated supply by the Minister for Finance, and supply of goods if the
goods are exported. In this respect, businesses will not be required to
collect any GST on such supplies but will be entitled to claim credit on
inputs used in the course or furtherance of their businesses. Examples
include the supply of certain agricultural products, foodstuff, water to
domestic consumers, electricity supply to domestic users, export of
goods, and international services.

Exempt supplies (section 18 of the Act): An exempt supply is a supply
of any goods or services which will not be subject to the imposition of
GST. The Minister may classify any supply of goods or services in
Malaysia as an exempt supply. In this context, businesses will not be
required to collect any GST on such supplies, and will not be entitled to
claim credit on their business inputs. Examples include the supply of
residential property, private healthcare and private education services,
and certain financial services.

Supplies not within the scope of GST: Supplies which do not fall within
the charging provision of the Act include non-business transactions, the
sale of goods from a place outside Malaysia to another place outside
Malaysia, as well as services provided by the Government sector.
Preparation during transitional period
As Malaysian businesses brace themselves for the implementation of GST
on 1 April 2015, some of the measures which they may take to ensure a
smooth transition are as follows:
For further information, please
contact:
Azman bin Othman Luk
+603 2299 3809
azman.luk@rahmatlim.com
Moy Pui Yee
+603 2299 3880
moy.puiyee@rahmatlim.com

Registration: A review of the total value of a company’s taxable
supplies in a particular month, or at least the preceding 12-month period,
will assist the company in determining whether it needs to be registered
mandatorily. Alternatively, the company may opt to register voluntarily.
Once the company has voluntarily registered, the company will have to
stay on the register for at least two years before action can be taken for
it to be deregistered from the GST register.

Review of contracts: Business documentation such as standard-form
contracts will have to be reviewed to ensure that relevant clauses are in
place and reflective of GST considerations. In particular, supplier
agreements should be reviewed with regard to pricing to ensure that
they are compliant with guidelines issued by the RMC, as well as the
GST legislation and regulations.

Keeping records: Accurate records of pricing decisions and source
documentation should be maintained (for a minimum of seven years)
and be readily available, as businesses may be required to report to
the RMC in the event that their pricing policies are challenged. These
records include:

All records of goods and services supplied by or to that taxable
person including tax invoices, invoices, receipts, debit notes, credit
notes and export declaration forms;

All records of importation of goods; and

All other records as the Director-General of Customs and Excise
may determine are required.
Legal Bulletin November 2014
10
Reference materials
For the full text of the Goods and Services Tax Act 2014 and other resource
materials, please click here for the Royal Malaysian Customs Department
webpage on GST.
Back to Contents Page
General
Anti-Money Laundering and Anti-Terrorism (Amendment)
Act 2014: Scope of AMLATFA extended to “proceeds of an
unlawful activity”
The Anti-Money Laundering and Anti-Terrorism (Amendment) Act 2014
(the “Amendment Act”), which came fully into force on 1 September 2014
has introduced key changes to the Anti-Money Laundering and Anti-Terrorism
Financing Act 2001, the primary Malaysian statute dealing with anti-money
laundering and counter-financing of terrorism (the “Act” or the “AMLATFA”).
Amongst other things, the Act has been renamed the “Anti-Money
Laundering, Anti-Terrorism and Financing and Proceeds of Unlawful
Activities Act 2001”, and the scope of the Act has been extended to cover
“proceeds of an unlawful activity” and “instrumentalities of an offence”, in
addition to property involved in or derived from money laundering and
terrorism financing offences and terrorist property.
Bank Negara Malaysia (“BNM”), the Central Bank of Malaysia, issued a
statement on 30 June 2014 stating that the “Amendments to the AMLATFA
aim to further enhance public and investors’ confidence in the Malaysian
financial system and the economy by addressing the risks and threats of
money laundering and terrorist financing activities in the country”.
Set out below are some of the salient changes that have been introduced by
the Amendment Act.
Scope of Act extended to cover proceeds of unlawful activity
The Act provides for, inter alia, the measures to be taken for the prevention
of money laundering and terrorism financing offences and the forfeiture of
property involved in or derived from money laundering and terrorism
financing offences, as well as terrorist property, proceeds of an unlawful
activity and instrumentalities of an offence.
The term “proceeds of an unlawful activity” is widely defined to mean any
property, or any economic advantage or economic gain from such property,
within or outside Malaysia, which is among other things derived, obtained or
acquired from any unlawful activity.
The term “instrumentalities of an offence” refers to any property or thing used
in connection with the commission of any unlawful activity, whether the
property or thing is situated within or outside Malaysia.
Stiffer penalties under the Act
Stiffer penalties have been introduced for money laundering and other
offences under the Act, with changes including longer jail sentences and
fines that may exceed RM5 million.
Legal Bulletin November 2014
11
As an example, under the former section 4 of the Act, offenders convicted of
money laundering could be jailed for up to five years or made subject to a
fine not exceeding RM5 million. Under the amendment to section 4 of the
Act, those found guilty of money laundering could face imprisonment for up
to 15 years and be liable to a fine of RM5 million or five times the amount of
the proceeds of an unlawful activity or instrumentalities of an offence,
whichever sum is higher.
Importantly, the Amendment Act introduced a new section 86A which makes
it an offence to attempt, abet or engage in a criminal conspiracy in relation to
any of the offences under the Act.
Reporting requirements
Reporting requirements imposed by the Act have been enhanced, with
reporting institutions (as listed in the First Schedule to the Act) being made
subject to wider and more stringent requirements. Additionally, new offences
have been introduced by the Amendment Act.
Under the amendment to section 14 of the Act, reporting institutions are
required to promptly report transactions to BNM where there is reason to
suspect that the transaction involves proceeds of an unlawful activity or
instrumentalities of an offence, or where the transaction is linked to any
terrorist entity, act or group.
Further, persons who know or have reason to suspect that a reporting
institution is proposing to lodge a report under section 14 or provide any
information to BNM will, under the new section 14A of the Act, be prohibited
from disclosing such knowledge or information to any person. Disclosure
will be allowed in certain limited circumstances including for the purpose of
informing a related corporation of the reporting institution of the risks involved
in dealing with a particular customer, where that related corporation is
incorporated in Malaysia and is engaged in financial services in Malaysia.
Separately, a new offence of structuring transactions to evade the reporting
requirement under section 14 of the Act has been introduced by the
Amendment Act. Those found guilty of such offence will be subject to
imprisonment for a term not exceeding seven years or to a fine of up to five
times the aggregate sum or value of the transaction at the time the offence
was committed, or both.
New Part IVA in relation to cross border movements of cash and bearer
negotiable instruments
The Amendment Act has also introduced a new Part IVA into the Act, which
covers cross border movements of cash and bearer negotiable instruments.
The Explanatory Notes to the Amendment Act state that Part IVA will provide
for the monitoring of cross border movements of cash and bearer negotiable
instruments to detect and curb money laundering and terrorism financing.
The new restrictions are as follows:

a new section 28B provides that any person leaving or entering Malaysia
with cash and bearer negotiable instruments exceeding the prescribed
value declared in the Gazette must declare such amount to the
competent authority.

a new section 28C provides that any person moving into or out of
Malaysia cash and bearer negotiable instruments exceeding the
prescribed value through postal, courier or freight forwarding services
must declare such amount.
Legal Bulletin November 2014
12

a new section 28E provides that, any person who receives cash and
bearer instruments from outside Malaysia which exceeds the prescribed
value also needs to declare such amount within five business days of
receipt of the same.
However, it should be noted that the restrictions that are imposed under
sections 28B and 28C are subject to the following exceptions under
section 28D:
For further information, please
contact:
Azman bin Othman Luk
+603 2299 3809
azman.luk@rahmatlim.com
Raymond Yong
+603 2299 3810
raymond.yong@rahmatlim.com

The restriction under section 28B does not apply to commercial passenger
carriers where the cash or bearer negotiable instrument is in the
possession of the commercial carrier’s passenger; and

The restriction under section 28C does not apply to commercial goods
carriers where the cash or bearer negotiable instrument is carried by the
commercial goods carrier on behalf of another person.
Under the new section 28G, those who structure, or assist or participate in
structuring any cross border transportation or movements of cash or bearer
negotiable instruments to avoid making a declaration under Part IVA will
commit an offence and will on conviction be liable to a fine of up to five times
the aggregate sum or value of the amount of cash or bearer negotiable
instruments at the time the offence was committed, or to imprisonment for
a term not exceeding seven years or to both.
The amendments to the Act also grant authorised officers the power to
question and search in relation to persons leaving or entering Malaysia.
Officers will have the power to arrest without a warrant any person whom
they reasonably believe has committed or is attempting to commit offences
under sections 28B or 28C.
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Publications
Getting the Deal Through: Government Investigations 2015
- Malaysian chapter
Chong Yee Leong of Rahmat Lim & Partners contributed the Malaysian
chapter to Getting the Deal Through: Government Investigations 2015.
The chapter provides an overview of the latest developments and procedures
in civil and criminal investigations. Topics covered include the relevant
enforcement agencies and authorities, the requirements, triggers and
procedures of an investigation, whistle-blower and employee protections,
document preservation, notification of investors, concepts of corporate
criminal liability, cooperation with enforcement agencies, resolution of
investigations, and potential civil and criminal penalties. Reproduced with
permission from Law Business Research Ltd. This article was first published
in Getting the Deal Through: Government Investigations 2015 (published in
August 2014; contributing editors: David M Zornow and Jocelyn E Strauber,
Skadden Arps Slate Meagher & Flom LLP). For further information please
visit www.gettingthedealthrough.com
To read the chapter, please click here.
Back to Contents Page
Legal Bulletin November 2014
13
Banking Regulation: Malaysian chapter
Rahmat Lim & Partners contributed the Malaysian chapter to The European
nd
Lawyer Reference Series: Banking Regulation (2 Ed). Authoring the chapter
were Partners Azman bin Othman Luk, Chen Lee Won and Lim Teong Sit,
and Associates Karen Foong and Elaine Heung and Foreign Associate
Lum Sher Vin of Rahmat Lim & Partners.
The chapter provides an insight into the bank regulatory framework in
Malaysia.
To read the chapter, please click here.
Back to Contents Page
IBA Takeover Guide 2014: Malaysian chapter
Partner Chen Lee Won of Rahmat Lim & Partners, contributed the Malaysia
chapter of the International Bar Association Takeovers Guides, produced
by the Corporate and M&A Law Committee and the Securities Law
Committee of the Legal Practice Division of the International Bar Association.
The chapter is intended as a high-level, practical guide for practitioners and
others who are looking for an introduction to the laws of Malaysia relating
to regulated takeovers.
The chapter is reproduced by kind permission of the International Bar
Association, London, UK. The full catalogue of Takeover Guides is available at:
www.ibanet.org/LPD/Financial_Services_Section/Securities_Law_Committee
/TakeoverGuides.aspx. © International Bar Association.
To read the chapter, please click here.
Back to Contents Page
Deals
RM812 million acquisition of stake in AmLife Insurance
Berhad and AmFamily Takaful Berhad
Rahmat Lim & Partners advised MetLife, Inc. (“MetLife”) on the acquisition
of a stake in AmLife Insurance Berhad (“AmLife”) and AmFamily Takaful
Berhad (“AmTakaful”) for a total sum of RM812 million. In addition, AmLife
and AmTakaful entered into exclusive 20-year bancassurance and
bancatakaful agreements with AmBank Berhad and AmIslamic Bank Berhad
respectively, for the distribution of life insurance and family takaful products.
The transaction is the largest of its type by a US insurance provider in
Malaysia to date.
Advising MetLife were Partners Moy Pui Yee, Wan Kai Chee and
Chia Chee Hoong of Rahmat Lim & Partners.
Advising MetLife on competition law issues was Partner Raymond Yong of
Rahmat Lim & Partners.
Legal Bulletin November 2014
14
Advising MetLife on intellectual property issues was Partner Ong Boo Seng
of Rahmat Lim & Partners.
Back to Contents Page
EUR 209 million acquisition of İstanbul Sabiha Gökçen
Uluslararası Havalimanı Yatırım Yapım ve İşletme A.Ş. and
LGM Havalimanı İşletmeleri Ticaret ve Turizm A.Ş.
Rahmat Lim & Partners advised Malaysia Airports Holdings Berhad
(“MAHB”) through its wholly-owned subsidiary company, Malaysia Airports
MSC Sdn Bhd (“MAMSC”), on the EUR 209 million acquisition of a 40%
equity stake in each of İstanbul Sabiha Gökçen Uluslararası Havalimanı
Yatırım Yapım ve İşletme A.Ş. and LGM Havalimanı İşletmeleri Ticaret ve
Turizm A.Ş. from GMR Infrastructure Limited, GMR Infrastructure Overseas
Limited and GMR Infrastructure (Global) Limited.
Advising MAHB as to Malaysian law were Partners Wan Kai Chee and
Kelvin Loh Hsien Han of Rahmat Lim & Partners.
Back to Contents Page
Awards
Rahmat Lim & Partners recognised as an Asian Rising Star
by Leaders League
Rahmat Lim & Partners has been named an Asian Rising Star at the
International Legal Alliance Summit & Awards 2014 held in New York on
19 June 2014. The Rising Star awards recognise practices of high potential
which have shown remarkable evolution. The International Legal Alliance
Summit & Awards is organised by Leaders League, an independent
information provider based in Paris. Winners are selected by specialist
jury members.
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Rahmat Lim & Partners voted Asian-MENA Counsel InHouse Community Firm of the Year 2014
Rahmat Lim & Partners has been voted Asian-MENA Counsel In-House
Community Firm of the Year 2014 in two categories, Capital Markets and
Corporate and M&A, in Malaysia.
The results are based entirely on the votes and testimonials of in-house
counsel and corporate decision makers surveyed as part of the 8th Annual
Asian-MENA Counsel In-House Community ‘Representing Corporate Asia
& Middle East’ Survey.
Back to Contents Page
Legal Bulletin November 2014
15
Rahmat Lim & Partners
Suite 33.01, Level 33, The Gardens North Tower
Mid Valley City, Lingkaran Syed Putra
59200 Kuala Lumpur
Malaysia
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+603.2299.3888
+603.2287.1278
enquiries@rahmatlim.com
www.rahmatlim.com