The Anti-Corruption Advisory Board and Parliament’s bipartisan Special Committee against Corruption have proposed that the Commission be given more bite to compel owners to declare their assets. The government would have to amend Section 36 of the Malaysian Anti-Corruption Commission (MACC) Act 2009 to compel an individual in certain circumstances to declare his finances or assets without the MACC first launching a formal corruption investigation.
Transparency International-Malaysia (TI-M) and the Bar Council have expressed their support for the law to be amended to give the anti-graft body more powers to probe individuals suspected of living beyond their means.
For example the Hong Kong Independent Commission against Corruption (ICAC) has the legal power to compel a person with” tremendous wealth” which does not match the income in their job position to declare his or her assets. This flows from Section 10 of the Prevention of Bribery Ordinance in Hong Kong which states:
1) Any person who, being or having been the Chief Executive or a prescribed officer,
(a) maintains a standard of living above that which is commensurate with his present or past official emoluments; or
(b) is in control of pecuniary resources or property disproportionate to his present or past official emoluments,
shall, unless he gives a satisfactory explanation to the court as to how he was able to maintain such a standard of living or how such pecuniary resources or property came under his control, be guilty of an offence.
3There are actually two offences in this section. Section10 (1) (a) is living beyond means, and Section 10 (1) (b) is possession of disproportionate assets. A defendant may only be charged with either one of the offences, not both, more often with the latter.
Most countries in Africa that have established anti-corruption agencies have adopted the Section 10(1)(b) offence, like Botswana and Zambia, but not necessarily Section 10(1)(a). Proving the offence is normally very difficult. There are only a few cases on the offence even in Hong Kong.
“Living beyond means” first existed as an offence in dealing with corrupt public officials when there was an absence of direct evidence of bribery against them. It was later widely adopted and written into legislations in many jurisdictions as an offence under organized crime or money laundering when proving the primary offence against the offenders was not always possible.
Former Deputy Commissioner of ICAC, Daniel Li, once informed TI-M president that as far as he could remember, there were not more than three cases of prosecution on living beyond means in Hong Kong and about 20 odd cases on possession of disproportionate assets. Conviction rate was over 70%. All these cases took place in the seventies and early eighties and people were most satisfied with the effectiveness of this provision. Since then there has not been a single prosecution and basically the offences now only remain in books, if not totally fallen into disuse.
The offences were very effective when first introduced to catch the corrupt officials who had had no previous knowledge of such offences and had been in direct control of huge assets or living luxuriously. As such persons gradually learnt how the authorities investigated such accumulation of assets and became aware of the legislation; they began to devise methods of hiding their assets and to be seen as living normal lives.
Nonetheless the offences are still good to make life more difficult for the corrupt even if the corrupt gets smarter to hide their assets. What needs to happen from the regulator side, extra effort and resources need to be deployed to do the job. Practically from a law enforcement perspective, strategy needs to be adjusted, and going back to investigate straight forward bribery and related offences would be more rewarding in terms of getting the evidence and successful prosecutions.
Burden of proof is still on the prosecution but it now only needs to show that there is unexplained wealth that does not commensurate with the accused earning capacity. The defendant is of course entitled to give an explanation as to his assets or means. A common defence has been wealth inherited from relatives or from other sources of income.
In Malaysia, the Anti-Money Laundering and Anti-Terrorism Financing (AMLATFA) criminalises money laundering of proceeds from serious crimes. The MACC can freeze, seize or confiscate the person’s property during investigation. More specifically to make that concept a reality, the MACC has substantially enhanced its forensic accounting capabilities which comprises professional accountants and other staff qualified and trained in forensic accountancy.
Just like ICAC, this group is tasked with projects that include asset and fund tracing; analysis and interpretation of financial data; preparation of financial profiles; giving professional advice during operations in the search and seizure of documents; examining accounting records to establish their evidential value, and the interviewing of bankers, accountants and other professionals from within the financial and securities industries.
With the advance in information technology and the emergence of rapid changes in the financial markets, corruption related financial fraud cases are becoming more complex and multi-jurisdictional. Often these cases are facilitated by professionals where multi-layers of fund flows, large numbers of parties, including offshore companies, and innovative and aggressive accounting techniques are involved. That is why forensic accountancy has become an integral part of our investigation techniques.
The law has to match with the needs of the country and be revised from time to time to suit the changing corrupt practices and environment. After a period of enforcement, people, including the corrupt and the bribers, begin to understand the legislations. If one wants to get involved in corrupt practices, he or she will find ways to avoid such being detected.
ICAC relied very much on Section 10 offence to catch the most corrupt government servants in the early days, then changed tactics to focus on conventional bribery offences only to find out that the law breakers were later smart enough to leave little trace or evidence. The result was ICAC asking for more intrusive investigating powers to secure adducible evidence for the purpose of laying a prosecution. Recent years ICAC choose to use the common law 'misconduct in public office' offence to prosecute corrupt government and public servants which so far has been positive and effective.
It is only appropriate to demonstrate that the best corruption law will not stay best for long. It will have to be adjusted and revised in order that it is able to sustain the deterrent effect on the bribers and the corrupt. The law, of course, will only be effective with a vigorous zero tolerance enforcement policy.
Learning from ICAC experience, TI-M have to think seven (7) steps ahead in order to prevent these white - collar criminals who are intelligent, manipulative and the fact that they do not see themselves as criminals, hiding their assets. These criminals believe that they are merely using the system to their advantage and, in the main, do not even have any direct contact with the victim.