LABUAN IBFC ENSURES BUSINESSES COMPLY WITH ALL REGULATIONS, SAYS LOFSA

KUALA LUMPUR, Nov 6 (Bernama) -- The Labuan Offshore Financial Services
Authority (LOFSA) says it will ensure that financial businesses in Labuan
continue to comply fully with international regulatory requirements.

It will take forceful action against any breach and non-compliance, LOFSA
said in a statement here Friday.

Labuan is the main island of the Malaysian Federal Territory of Labuan,
which is adjacent to the Malaysian state of Sabah.

LOFSA said that the Labuan International Business and Financial Centre
(Labuan IBFC) is well-regulated and the prudential practices are on par with
international standards.

It continues to cater to legitimate and sound businesses.

The strict regulatory and supervisory regime, including the prohibition of
cash transactions in the IBFC, the application of anti-money laundering rules
and procedures on the financial institutions in Labuan are designed to preserve
the centre's integrity and reputation, it added.

It issued the statement following a move by the US Treasury Department on
Thursday which announced sanctions against First East Export Bank PLC, the
Labuan subsidiary of Iran's Bank Mellat, accusing it of helping to finance the
proliferation of weapons of mass destruction.

The executive order authorising the move freezes the assets of designated
proliferators of weapons of mass destruction and their supporters and prohibits
US persons from engaging in any transaction with them, the Treasury Department
said.

Separately, Malaysia's central bank governor (Bank Negara Malaysia) Zeti
Akhtar Aziz, said forceful action will be taken immediately if there is any
contravention of rules and regulations.

"LOFSA is a well regulated financial centre. So we have confidence, and if
we uncover anything that is not compliant, then forceful action will take place
immediately," she told reporters when asked to comment on the issue after
attending the Budget 2010 implementation meeting in Putrajaya, Malaysia's
federal administrative centre.

She said Malaysia have followed the rules of the United Nations and also
monitored LOFSA very closely to ensure that there is no contravention to the
rules and regulations.

"Our oversight and surveillance are very stringent ..because we value the
reputation of LOFSA as a business financial centre conducting legitimate
business," she said.
-- BERNAMA