Targeted financial sanctions related to the proliferation of weapons of mass destruction (WMD) is an international standard introduced by the Financial Action Task Force (FATF) under the FATF 40 Recommendations published in February 2012.
Under this standard, countries are required to implement targeted financial sanctions without delay to comply with United Nations Security Council Resolutions (UNSC) relating to the prevention, suppression, and disruption of the proliferation of weapons of mass destruction and its financing.
The UNSC has imposed sanctions on individuals and entities involved in the proliferation of WMD activities through the following resolutions:
- Resolutions 2231 (2015) relating to the Islamic Republic of Iran; and
- Resolution 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013) and 2270 (2016) and their successors, relating to the Democratic People’s Republic of Korea (DPRK).
In implementing Malaysia’s obligation in relation to the above UNSC resolutions, the Ministry of International Trade and Industry (MITI) through the Strategic Trade Act 2010 (STA) and the Strategic Trade (United Nations Security Council Resolutions) Regulations 2010 (the Regulations) issued several Orders to designate the individuals and entities listed in the above UNSC resolutions.
Pursuant to Regulation 3 of the Regulations, intermediaries are amongst others, required to:
- Freeze funds or other financial assets of such individuals and entities that are located in Malaysia; or
- Prohibit investment in Malaysia by such individuals and entities; and
- Prevent the provision of financial services.
For ease of reference for compliance by the intermediaries, the links to the Regulations and Orders issued by MITI are as provided below:-
- Strategic Trade (United Nations Security Council Resolutions) Regulations 2010 (pdf)
- Strategic Trade (Restricted End-Users and Prohibited End-Users) Order 2010 (pdf)
- Strategic Trade (Restricted End-Users and Prohibited End-Users) (Amendment) Order 2011 (pdf)
- Strategic Trade (Restricted End-Users and Prohibited End-Users) (Amendment) Order 2014 (pdf)
- Strategic Trade (Restricted End-Users and Prohibited End-Users) (Amendment) Order 2016 (pdf)