What penalties or compounds could result from BNM’s administrative process?

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Bank Negara Malaysia to Pursue Administrative Action Against 1MDB

Bank Negara Malaysia (BNM) will proceed with administrative action against 1Malaysia Development Berhad (1MDB) for its failure to provide adequate reasons and documentary evidence for not repatriating US$1.83 billion (RM7.76 billion) from overseas. The central bank has not received supporting documentation for 1MDB's claim that the funds are needed abroad to service foreign debts, despite a stipulated deadline. This administrative enforcement action, distinct from any criminal proceedings, may lead to penalties or compounds.
Administrative Action for Non-Compliance

BNM's decision to take administrative action stems from 1MDB's non-compliance with a previous order issued last year. Under the Exchange Control Act 1953 (ECA), 1MDB was directed to bring back funds that had been approved for overseas investments. The state-owned firm had indicated that these funds were either spent or earmarked for debt repayment, rendering them unavailable for repatriation. BNM's pursuit of this action is aimed at upholding the integrity of the financial system and ensuring adherence to regulatory requirements by all entities.
Potential Penalties and Compounds

While the specific range of penalties or compounds that can be imposed is not detailed, BNM Governor Zeti Akhtar Aziz indicated that such outcomes are possible as part of the administrative enforcement process. These measures are distinct from criminal enforcement actions, which the Attorney-General had previously decided not to pursue. The central bank will follow due process and submit its recommendations for administrative action to the Attorney-General, whose final decision will be binding.
Process and Timeline for Submission

The administrative enforcement process involves BNM submitting its findings and recommendations to the Attorney-General. Governor Zeti stated that this submission is planned to occur within the remaining period of her term, which concludes next month. The outcome of this administrative action will be determined after the Attorney-General reviews BNM's submission and makes a final decision. This approach aims to bring closure to the matter, allowing the incoming central bank governor to begin with a clean slate.

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What penalties or compounds could result from BNM’s administrative process?

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