Remittance Flagged and Account Frozen?

Why do banks flag money sent home?

Sending part of your salary to your family is legal, and you have the right to a bank account in Malaysia to do it. ^[f4] Banks must also watch every account for signs of money laundering or terrorism financing. ^[f1]

Regular transfers of similar amounts to the same person in the same country can look like a syndicate’s pattern. The bank’s system flags them, and staff then check them. A flag is not an accusation.

A flag is more likely if you use an unlicensed money sender, if the amounts suddenly go up, or if other people send money through your account.

Bank review or criminal freeze: which one do you have?

There are two kinds of restriction, and each is handled differently.

A compliance hold is the bank’s own decision to restrict your account while it reviews it. ^[f2] Banks do this under their account terms and their anti-money laundering duties. Its compliance team checks the flagged transfers, and clear documents that explain your pattern can help settle it.

A criminal freeze comes from the authorities under AMLA, the Anti-Money Laundering Act. ^[f5] It happens when they suspect the account is linked to a crime. This kind is a legal matter, so speak to a lawyer.

Call your bank first. Ask directly: is this an internal review, or an order from an outside authority? The answer decides your next step.

What rights do you have as a foreign worker?

Foreign workers in Malaysia may open bank accounts, receive their salary and send money to their families. ^[f4] A bank flag does not take these rights away.

You can ask why your account was restricted. You can give the bank documents that support your case. You can also get legal advice at any stage.

A bank review is not an immigration matter. If it turns into a criminal investigation, ask a lawyer whether it could affect your work permit or immigration status.

Which documents should you prepare?

The quickest way to clear a compliance hold is to show that the money you sent home is your salary. Collect these before you go to the bank or a lawyer.

Employment documents. Your work permit or employment pass, your employment contract, and a letter from your employer stating your job and salary. These show you earn a lawful income in Malaysia.

Salary records. Payslips for the past 6 to 12 months, and bank statements where the salary credits match those payslips. These link your income to the money you sent.

Remittance records. Receipts for past transfers, whether through the bank or a licensed remittance provider. ^[f3] These show you have sent money to the same family members over time.

Proof of family. Documents that show how you are related to the people receiving the money, such as a family register, your children’s birth certificates or a marriage certificate.

What should you do now?

Go to your bank branch with originals and copies of your documents. Ask for the compliance department, not the counter staff. Explain that you are a foreign worker sending part of your salary to your family.

If the bank does not settle the hold within a reasonable time, or you learn the police ordered the freeze, speak to a lawyer straight away. A lawyer can deal with the bank’s compliance team or the authority for you.

Do not move money through a friend’s account or an unlicensed money sender while your account is frozen. It adds suspicion and can lead to real legal trouble.

If your salary still goes into the frozen account and you already have another account in your own name, ask your employer whether it can be paid there for now. You can also ask a lawyer about applying for part of the money to be released for living costs.

Should you use a licensed remittance company?

Licensed remittance providers are regulated by Bank Negara, so transfers through them are less likely to be flagged. ^[f3] Unlicensed channels raise the risk.

Bank Negara publishes the list of licensed providers on its website. Check it before you send money.

When should you get a lawyer?

Get legal advice straight away if any of these apply:

• The bank says the police, another authority or a court ordered the freeze.
• The bank review has gone on for a long time with no progress.
• You are asked to go to a police station to give a statement.
• Your employer is putting pressure on you over the frozen account.

A lawyer who knows bank reviews and foreign workers’ rights can write to the bank’s compliance department with your documents. If an authority is involved, the lawyer can deal with it for you and advise you on any risk to your immigration status.

Handing in your documents early gives the bank what it needs to finish its review.

Sources

1. Bank Negara Malaysia, AML/CFT Policy Documents
2. Financial Services Act 2013
3. Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA)
4. Bank Negara Malaysia, Licensed Money Services Business
5. Bank Negara Malaysia, Financial Inclusion Framework