Country Reports on Terrorism 2015 - Malaysia

Overview: Malaysia's counterterrorism efforts in 2015 continued to focus on mitigating the threat of the Islamic State of Iraq and the Levant (ISIL) and foreign terrorist fighters, including by passing and implementing new legislation and continued law enforcement activity. Prime Minister Najib announced at the September Leader's Summit on Countering ISIL and Violent Extremism hosted by President Obama in New York that Malaysia was part of the Global Coalition to Counter ISIL. Malaysian authorities arrested approximately 90 suspected ISIL supporters and other terrorists in 2015 and convicted at least 13 in court. The Malaysian government identified 72 Malaysians, including 14 women, who have joined ISIL, 51 of whom were armed fighters. By the end of the year, Malaysian authorities had identified a total of 14 Malaysians killed fighting with ISIL, and seven of whom had returned to Malaysia.

Malaysia continued to strengthen its counterterrorism cooperation with the United States. President Obama returned to Malaysia in November for the East Asia Summit and related meetings. During his visit, President Obama committed the United States to support the Malaysian government in developing a regional messaging center to counter terrorist propaganda.

Deputy Prime Minister/Home Minister Zahid visited Washington in October, when he and Secretary of State Kerry signed a terrorist watchlist-sharing arrangement, pursuant to Homeland Security Presidential Directive-6. The agreement provides a foundation for a long-term, comprehensive, and systematic exchange of information on known and suspected terrorists, and will allow Malaysian authorities to screen individuals against U.S. watchlists. A team from the U.S. Terrorist Screening Center visited Kuala Lumpur in December to establish with Malaysian authorities technical steps for implementing the agreement. In November, Malaysia and the United States signed a similar information sharing agreement focused on serious crime, called the Preventing and Combatting Serious Crime (PCSC) Agreement. The PCSC agreement provides for automated checks and exchanges of biometric information on serious criminals.

Malaysia sometimes used national security and counterterrorism arguments to delegitimize some social groups and political activities. For example, high-level officials from the ruling coalition have publicly stated that ISIL and G25, a pro-reform Islamic NGO composed of retired senior civil servants, were the two most pressing threats to Malaysian security.

2015 Terrorist Incidents: In May, Militants allegedly from the Philippines and linked to the Abu Sayyaf Group (ASG) kidnapped two Malaysians from a restaurant in Sandakan, eastern Sabah, Malaysia. ASG terrorists on the southern Philippine island of Jolo reportedly released one of the victims in November following a ransom payment. Several days later, however, the other victim was beheaded, reportedly due to a dispute between the kidnappers over the ransom payment.

Legislation, Law Enforcement, and Border Security: In April, Malaysia's Parliament passed two new counterterrorism laws and amended previous legislation, providing authorities with greater legal tools against foreign terrorist fighters and other terrorist supporters. The Special Measures Against Terrorism in Foreign Countries Bill enables authorities to suspend or revoke Malaysian travel documents for individuals suspected of planning to leave the country to engage in terrorist acts. The new laws passed with limited public debate granting broad new powers to the Prime Minister.

Amendments to the Penal Code criminalized the receipt of terrorist training, the preparation of terrorist acts, and possession of items (such as books and promotional materials) associated with terrorist groups. The amendments also ban travel to, through, or from Malaysia to engage in terrorism, criminalize the use of social media to promote terrorism, and expand the definition of "support to terrorist groups."

While most of the legislative changes passed in 2015 are consistent with a rule-of-law approach to counterterrorism, the U.S. government and other observers, including the Malaysian Bar Council, raised concerns that the Prevention of Terrorism Act (POTA) and amendments to the Prevention of Crime Act (POCA) reinstate preventive detention without trial and could be used against political opponents of the government. POTA covers the commission or support of terrorist acts outside of Malaysia, whereas the POCA amendments expand preventive detention authority to broader criminal activity. Fueling these concerns, in September, Malaysian authorities detained under the Security Offenses (Special Measures) Act (SOSMA) authority a former ruling party politician who had been critical of the government. In early October, police detained his lawyer, also under SOSMA authority. Both were detained for the maximum 28 days allowed by the law, and were subsequently charged under Chapter VI, Section 124L for "attempt to commit sabotage."

In early December, the Malaysian Parliament passed the National Security Council Act, which gives the Prime Minister unchecked authority to wield martial-law-like powers in any part of the country designated by the Prime Minister as a "security area." Similar powers are defined by the Malaysian constitution, but were previously reserved to the king.

The Royal Malaysian Police Special Branch Counterterrorism Unit has the lead counterterrorism law enforcement role. Malaysian authorities continued to improve interagency cooperation and information sharing, including participation in regional meetings, Global Counterterrorism Forum (GCTF) events, and training conducted through Malaysia's Southeast Asia Regional Centre for Counter-Terrorism (SEARCCT), which is part of Malaysia's Ministry of Foreign Affairs.

Most of Malaysia's terrorism-related arrests in 2015 were under SOSMA and penal code chapters VI (Offenses Against the State) and VIa (Offenses Relating to Terrorism).

Malaysia convicted at least 13 ISIL supporters in 2015, all of whom pled guilty in return for reduced sentences. Those convicted included a father and son sentenced to 18 years and 12 years respectively for plotting attacks in Malaysia; several individuals sentenced to two years following their arrest at Kuala Lumpur International Airport on their way to join ISIL in Syria, including a woman who planned to marry an ISIL fighter she had met online; a 55-year-old mother of a deceased ISIL fighter sentenced to two years for using Facebook to promote terrorism; and two military personnel sentenced to seven and nine months in prison for possessing an image of an ISIL flag on their cell phones.

In October, at the request of the U.S. government, Malaysian police arrested Ardit Ferizi, a 20-year-old computer hacker from Kosovo who had provided ISIL with personal information of more than 1,300 U.S. government employees. Ferizi's extradition to the United States was pending as of early December.

In April, the trial began for al-Qa'ida operative Yazid Sufaat and accomplice Muhammad Hilmi Hasim, and remained underway at year's end. Sufaat and Hasim were arrested in 2013 for recruiting Malaysians to fight in Syria and are charged with inciting or promoting the commission of terrorist acts under Malaysia's penal code, and membership of a terrorist organization. Sufaat's other accomplice, Halimah Hussein, remained at large at year's end.

The trial of 30 suspects – 27 Philippine nationals and three Malaysians – involved in the February 2013 Lahad Datu incursion, began in January 2014 and remained ongoing at the end of 2015. The suspects were on trial under SOSMA for harboring terrorists, membership of a terrorist group, recruiting terrorists, and waging war against the king.

Iranian citizen, and suspected member of Iran's Revolutionary Guard Corps, Masoud Sedaghatzadeh, arrested in Malaysia in February 2012 after failed attempted bombings in Bangkok, remained in Malaysian custody. A Malaysian court had ordered Sedaghatzadeh's extradition to Thailand in 2012, but his appeal remained pending at year's end.

With U.S. assistance, the Royal Malaysian Police and Immigration Department took steps to provide immigration authorities with direct access to INTERPOL databases. Also with assistance from the United States, Malaysia began near-daily reporting to INTERPOL of stolen and lost travel documents. Malaysia has a no-fly list, but passengers are compared to that list by the immigration officer at the port of entry and the decision to deny entry is made at the airport.

In 2015, Malaysia made notable progress implementing UN Security Council Resolution 2178 by passing new legislation, increasing information sharing with international partners, strengthening efforts to halt the flow of foreign terrorist fighters, engaging with civil society and local communities, and promoting non-violent avenues for conflict prevention, such as the creation of MyCorps, a Malaysian version of the Peace Corps.

The Malaysian government enforced a maritime curfew along the eastern coast of Sabah, in response to the continued threat of kidnapping for ransom and other transnational threats. In September, Malaysia's Deputy Prime Minister/Home Minister announced plans to establish a new Border Security Agency, which would include police, customs, and immigration officials. As of year's end, that agency had not yet been created.

Malaysia continued to participate in the Department of State's Antiterrorism Assistance program, with programs focused on strengthening law enforcement capacity to secure Malaysia's borders from terrorist transit.

In 2015, the U.S. Department of State launched in Malaysia a regional maritime law enforcement initiative, which includes Indonesia, the Philippines, and Vietnam. The Department of State's Export Controls and Related Border Security Program conducted capacity-building activities for customs, police, immigration, the Attorney General's Chamber, coast guard, and strategic trade officials. Malaysia participated in the Container Security and Megaports Initiatives, as well as the UN Office on Drugs and Crime's Container Control Program.

Countering the Financing of Terrorism: Malaysia became a member of the Financial Action Task Force (FATF) in 2015, and is a member of the Asia/Pacific Group on Money Laundering, a FATF-style regional body. Malaysia's financial intelligence unit (the Unit Perisikan Kewangan, Bank Negara Malaysia) is a member of the Egmont Group. In September 2015, FATF published its Mutual Evaluation Report on Malaysia's anti-money laundering/countering the financing of terrorism (AML/CFT) measures. The report praised Malaysia's robust policy framework, strong political commitment and well-functioning coordination structures for AML/CFT, although it underscored the need for Malaysia to improve its understanding of terrorist finance risk.

Malaysia has a well-developed AML/CFT framework, and a capable Financial Intelligence and Enforcement Unit within the Bank Negara Malaysia, the central bank of Malaysia. While terrorism financing was not considered a high risk in Malaysia's most recent National Risk Assessment (NRA), the continued influence of ISIL suggests that threat may be increasing: in particular, 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 fight with ISIL. Understanding of ISIL-related financing risks evolved in 2015, and Malaysia plans to update its most recent NRA to include further assessment of terrorist finance risks.

Malaysia has not prosecuted any terrorist finance cases to date, although it has commenced 40 terrorist finance investigations since 2010, with 22 ongoing at year's end. All 12 of the cases opened since 2014 related to ISIL.

Malaysia has implemented sanctions in accordance with relevant UNSCRs, including designating domestic and foreign entities under UNSCR 1373 and co-sponsoring designations and freezing assets of individuals and entities on the UN 1267/1989/2253 ISIL (Da'esh) and al-Qa'ida sanctions regime. The 2014 amendments to the Anti-Money Laundering and Anti-Terrorist Financing Act provide for automatic translation of UN designations into designations under Malaysian law and direct reference to the lists maintained by the UN. Malaysia routinely distributed lists of terrorist designations and freezing obligations to financial institutions.

The use of informal remittances created vulnerability for abuse by terrorist financiers. Malaysia has undertaken strong regulatory and enforcement action against unauthorized money services businesses that operate in the informal economy. Strengthened controls, enforcement and other supervisory measures have boosted the use of formal remittance channels, although risks from unauthorized money services businesses remain.

Malaysia requires Know Your Customer (KYC) data for a wide range of entities, and requires financial institutions to promptly report transactions suspected to involve proceeds of any unlawful activity via Suspicious Transaction Reports (STRs). Malaysia does not oblige non-profit organizations to file STRs, but they are required to file annual financial reports to the Registrar of Societies (ROS), which may file such reports. Law enforcement works with the ROS and other charity regulators to prevent misuse and terrorism financing in the NPO sector, especially in vulnerable areas like religious or charitable NPOs. The ROS also conducts an annual conference for its members on the risks of terrorism financing.

For further information on money laundering and financial crimes, see the 2016 International Narcotics Control Strategy Report (INCSR), Volume II, Money Laundering and Financial Crimes: http://www.state.gov/j/inl/rls/nrcrpt/index.htm

Countering Violent Extremism: Senior Malaysian officials actively participated in the White House Summit on Countering Violent Extremism (CVE) in February and related events held throughout the year. Prime Minister Najib announced Malaysia's plans to develop a counterterrorism messaging center at the September Leader's Summit on Countering ISIL and Violent Extremism hosted by President Obama in New York. Following that announcement, the U.S. Department of State worked closely with the government to develop a concept for the center. The Home Affairs Minister also actively engaged in CVE efforts, including through his participation at the CVE Summit held in Sydney, Australia, in June.

SEARCCT conducted several regional programs on countering violent extremism. The Global Movement of Moderates (GMM), a Malaysian-based organization founded by Prime Minister Najib, conducted several CVE programs, including a public forum on youth and terrorism. In May, with support from the U.S. Department of Justice Resident Legal Advisor, GMM organized a workshop in partnership with Google to develop the capacity of civil society, including bloggers, academics, students, journalists, and community activists to develop credible online campaigns to counter terrorist propaganda.

International and Regional Cooperation: As the 2015 chair of ASEAN, Malaysia convened multiple multilateral events focused on strengthening international cooperation on counterterrorism and CVE. In March, the Minister of Defense hosted the ASEAN Defense Ministers Ministerial in Langkawi, resulting in a joint declaration committing to greater regional cooperation to counter the ISIL threat. Also in March, SEARCCT hosted an ASEAN Regional Forum workshop on counter-radicalization. Deputy Prime Minister Zahid participated in the UNSC Ministerial Meeting on Foreign Terrorist Fighters in May. In September, the Deputy Prime Minister hosted in Kuala Lumpur a Special ASEAN Meeting on the Rise of Radicalization and Violent Extremism. At the East Asia Summit held in Kuala Lumpur in November, Malaysia co-sponsored with Australia a statement on CVE and sponsored a statement on the Global Movement of Moderates.

SEARCCT hosted 18 training events in 2015, including seminars on crisis management, terrorist finance, and transportation security. Malaysian officials participated in several Global Counterterrorism Forum events, including a workshop on border security and a plenary session on the detention and reintegration of terrorist prisoners.