Publication of the Mutual Evaluation Report of Malaysia

The APG-FATF joint Malaysia Mutual Evaluation Report (MER) was adopted in October 2025, and published in December 2025. Malaysia has further strengthened its defences against illicit finance since 2015, notably by enhancing its legal framework and supervision of financial and non-financial sectors. Malaysia has undertaken initiatives to update and deepen its understanding of illicit finance risks, as well as to strengthen domestic cooperation and coordination mechanisms. However, there are challenges in translating money laundering investigations into prosecutions and convictions.

Mutual evaluations assess the effectiveness of a jurisdiction's anti-money laundering, and countering terrorist financing and proliferation financing (AML/CFT/CPF) measures, and their level of compliance with the international FATF Standards, at the time of an on-site visit by an international team of assessors in February 2025. 

FATF President Elisa de Anda Madrazo: “Malaysia was one of the first countries to be assessed in the new round of evaluations – Malaysian authorities were highly committed to the process and their diligent efforts made the evaluation a success. Substantial reforms and a strengthened legal framework have put Malaysia on a stronger footing to deal with major cases such as 1MDB that shake public confidence. Malaysia must sustain and build on these reforms and it must strengthen international cooperation, improving its sanction framework and demonstrating a sustained increase in money laundering prosecutions and convictions in the next three years.  By implementing the FATF’s standards and recommendations, countries not only safeguard the integrity of their financial system, but make people and communities safer by stemming the flows of illicit finance that sustain harmful crimes such as human trafficking, drug trafficking, corruption and organised crime.” 

APG Co-Chair Mitsutoshi Kajikawa: “As a strong voice for AML/CFT in the Asia-Pacific region, the APG welcomes the publication of the Malaysian mutual evaluation report. This is the APG’s first mutual evaluation report for the Global 5th round, and I can see much of our region’s risk and context reflected in the report.  It recognises the scale of our challenge but also the successes we can be assured of achieving with the continuous improvement mindset exemplified by Malaysian authorities. We look forward to working with Malaysia to share the insights gained regarding its strengths with regional partners, build on the findings and implement the report’s astute recommendations.”

The Mutual Evaluation Report is the result of a rigorous, in-depth assessment spanning over 16 months. The assessment team held over 70 meetings with all relevant public authorities and also met with 45 private sector entities, including financial institutions, virtual asset service providers, designated non-financial businesses and professions, and non-profit organisations.