Country Report on Terrorism 2017 - Chapter 1 - Malaysia

Overview: Although Malaysia did not experience ISIS-related attacks in 2017 and the overall number of foreign terrorist fighters from Malaysia decreased, the country remained a source, transit, and, to a lesser extent, a destination country for suspected ISIS supporters. This included suspected ISIS supporters who were deported from Turkey and those planning to travel to the southern Philippines. Malaysia monitored, arrested, deported, and tried suspected ISIS supporters throughout the year. Malaysia also cooperated with the United States and others to increase border security capacity at airports and in the Sulu Sea and to counter terrorist messaging on social media. Malaysia is a member of the Global Coalition to Defeat ISIS.

Legislation, Law Enforcement, and Border Security: On April 4, the House of Representatives re-authorized the maximum 28-day detention-without-charge period for national security suspects contained in the 2012 Security Offenses (Special Measures) Act for another five years, or until July 2022. Opponents of the extension cited the misuse of national security legislation to arrest critics.

During the year, Malaysian authorities continued to broaden INTERPOL connectivity at air, land, and sea ports of entry, but lacked legislation to authorize the collection of Advance Passenger Information.

In August, police arrested eight Philippine citizens suspected of planning an attack on the closing ceremony of the Southeast Asia Games. The lead suspect was believed to be a member of the Abu Sayyaf Group and to have participated in combat operations, kidnappings for ransom, and beheadings in the Philippines prior to his arrest.

Malaysian law enforcement continued to participate in the Department of State’s Antiterrorism Assistance (ATA) program. Training and equipment focused on enhancing Malaysian border security and investigative capabilities.

Countering the Financing of Terrorism: Malaysia is a member of the Financial Action Task Force (FATF) and of the Asia/Pacific Group on Money Laundering, a FATF-style regional body. In its annual National Risk Assessment for 2016 (published in 2017), the National Coordination Committee to Counter Money Laundering did not consider terrorism financing to be a high risk in Malaysia. The Committee did note, however, that a small but growing number of “self‑financed” terrorists have sought to raise funds through family, friends, and the internet to support their travel to Syria and Iraq to fight with ISIS.

Between 2016 and April 2017, 29 terrorist finance prosecutions were brought to court and 11 convictions were secured. The increase in convictions over the previous year was due to closer public-private partnership in detecting terrorist financing-related activities in Malaysia and greater coordination within the law enforcement community.

Although the general risk was low for the use of cryptocurrencies in terrorist financing, Malaysia’s central bank (BNM) announced during the year that it had begun drafting a framework to regulate the exchange of cryptocurrencies to fiat currencies to ensure that all such exchange entities and their transactions were registered with the central bank.

According to a 2017 regional not-for-profit sector risk assessment (unique from the National Risk Assessment) co-published by BNM, the terrorism finance risk facing not-for-profit organizations (NPOs) in Malaysia was rated medium. The report highlighted the potential for Malaysia to be used as a transit country for recruits joining terrorist groups because its porous borders were vulnerable to terrorists moving funds and other material support into neighboring countries. Malaysia was the only country commended in the regional assessment for having significant regulatory oversight, terrorist financing-focused outreach, national and international mechanisms for coordination, and regulatory powers to remove and revoke NPO-status and enforce actions against NPOs. However, the existence of four different registrars for NPOs and the absence of requirements for NPOs to register and file suspicious transaction reports created limitations to detecting and combating terrorist financing.

For further information on money laundering and financial crimes, see the 2018 International Narcotics Control Strategy Report (INCSR), Volume II, Money Laundering and Financial Crimes.

Countering Violent Extremism (CVE): The Ministry of Youth’s Institute for Youth Research published a set of guidelines in 2017 to educate the public on “the dangers of radicalism and involvement in extremism.” The guidelines were based on government-sponsored research on ISIS ideology.

The government also announced two new counter-messaging initiatives during the year, including the King Salman Center for International Peace, a partnership with the Government of Saudi Arabia; and the ASEAN Center for Islam, Peace, and Non-Violence, a center that would be based at the Universiti Sultan Azlan Shah. The ASEAN center was not operational by the end of 2017.

Police engaged in extensive community outreach activities during the year and enhanced security partnerships with communities in Eastern Sabah.

International and Regional Cooperation: Malaysia continued to support counterterrorism efforts in regional and multilateral organizations and participated in numerous counterterrorism events hosted by the United Nations, the Global Counterterrorism Forum, ASEAN, and the ASEAN Regional Forum (ARF). In 2017, Malaysia hosted an ARF workshop on countering online extremism, a regional workshop on handling returning foreign terrorist fighters and ISIS External Operations, and a regional counterterrorism financing summit. In cooperation with Indonesia and the Philippines, Malaysia announced the commencement of joint maritime patrols in June to “maintain stability in the region in the face of non-traditional real threats such as piracy, kidnapping, terrorism, and other transnational crimes in regional waters.” The three governments also announced the commencement of joint air patrols in October to counter the movement of violent extremists and terrorists across the borders of the three countries.

Malaysia is also a member of the Saudi-led Islamic Military Counter Terrorism Coalition. In November, Malaysian officials joined representatives from 41 other Muslim-majority states to formally launch the coalition and coordinate their counterterrorism efforts.