Following the recommendation made by the Financial Intelligence Unit (FIU) of Bank Negara Malaysia, the Accounting Research Institute (ARI) embarked on a research project on Non-Profit Organizations (NPOs) in Malaysia. The interest in NPOs resulted from the the APG ( Asia-Pacific Group on Money Laundering) Mutual Evaluation report in 2007. The report gave Malaysia a "Partial Compliance" rating for its governance of anti-money laundering and counter-financing of terrorism on NPOs. Specifically, three reasons given for such rating were namely:
- Malaysian NPOs have no ongoing strategy to identify and mitigate anti-money laundering and counter-financing of terrorism (AML/CFT)
- There has been limited outreach program to inform NPOs of the what, why, when, who and how of Money Laundering and Terrorism Financing.
- There has been inadequate information exchange between Malaysia and its international counterparts.
As a result of such feedback from APG, ARI has been working very closely with two important agencies that register and monitor NPOs in Malaysia. The two agencies are namely the Registrar of Societies (ROS) and the Companies Commission Malaysia (CCM). In a meeting in Putrajaya and attended by representatives from FIU/BNM, CCM and ROS, the Accounting Research Institute presented its interim research finding on NPOs registered with the ROS. In essence, ROS has taken several steps and initiatives to monitor and mitigate money laundering and terrorism financing activities. Efforts are now geared towards improving the governance of NPOs in Malaysia.
