WITH the current development involving financial crimes in Malaysia, I believe that adopting a single and comprehensive legislation similar to the United Kingdom Fraud Act 2006 will empower investigators and prosecutors to execute their duties well. Further, a successful prosecution will deter high-profile fraudsters from committing such acts.
Fraud, bribery and corruption are signs of a serious epidemic for which a country needs to find ways to reduce or eliminate fully. The UK took a bold step by doing away with the eight deception-based offences in the 1968 and 1978 Theft Acts to create simple yet comprehensive fraud legislation. The government’s consultation paper on Fraud Law Reform in 2004 had identified the overlap between the deception offences between the Theft Acts and the need to make the law clearer and more accessible to juries.
According to the UK Home Office, the purpose of the act is “to clarify the law, and provide law enforcers and prosecutors with a modern and flexible law of fraud”. The new legislation aims to provide a package of offences which can keep stride with the problems posed by advances in technology, modern methods of property transfer and commercial transactions. Furthermore, this legislation has only 16 sections and is worded in a way that can be easily understood. It is also easy for the investigators and prosecutors to use the said act.
This act creates a general offence of fraud which can be committed in three ways, that is, fraud by false representation, failing to disclose information and abuse of position. This act emphasises on dishonesty and method of committing fraud, helping investigators and prosecutors to execute their duties well.
Reducing rigidity or over-meticulous requirements in preparing for cases involving financial crimes will deny criminals an escape route. Under this act, the standard of proof will fall on the defendant to prove to the court that he did not act dishonestly. By shifting the burden of proof from prosecutors to defendants, this act allows the victims to be protected, and there is a legal duty for defendants to disclose incriminating evidence against them. The punishment for these offences, which are known as conduct offences, is 10 years’ imprisonment. By enacting a new legislation which is similar to this act, the said agencies will have an operational tool to prosecute the criminals successfully.
Even though this act narrowly defines fraud, its application will cover wider areas like falsification, forgery, counterfeiting, money laundering, false accounting and corruption. The current legislation on financial crimes in Malaysia has too much overlap, technicality and is over-particularised, and does not help the relevant agencies prosecute against criminals. We need to have a comprehensive yet simple legislation to increase the possibility of successful indictments in court.
R. PANEIR SELVAM,
lecturer, Department of Accounting and Finance, Faculty of Business,
Economics and Accounting,
ELM Business School, HELP University