The Strategic Trade Act 2010 (STA) and specifically, the Strategic Trade (United Nations Security Council Resolutions) Regulations 2010 and Strategic Trade (Restricted End-Users and Prohibited End-Users) Order 2010 provide the legal basis for domestic implementation of TFS-PF in relation to UNSCRs imposed on the designated countries and persons. TFS are the measures of asset freezing and prohibitions to prevent funds or other assets from being made available, directly or indirectly, for the benefit of specified entities or designated persons who are being sanctioned, without delay.

The objective is to prevent persons and entities involved in the proliferation of weapons of mass destructions from raising, moving and using funds, consistent with the relevant United Nations Security Council Resolutions (UNSCRs). This is to ensure that reporting institutions are not subject to abuse, inadvertently support or become part of the PF networks, given the emerging trends on PF risks and techniques used by the designated individuals and entities to evade TFS on PF.

This Directive is issued pursuant to section 6 of the STA to clarify the specific obligations which must be complied with and where relevant, guidance notes are also included to support better understanding of the requirements. 

Reporting Institutions under the supervision of Central Bank of Malaysia (BNM), Labuan Financial Services Authority (LFSA) and Securities Commission (SC) to conduct institutional risk assessments, implement appropriate measures and impose targeted financial sanctions.

Complete document on Directive TFS on PF can be access here