THERE have been repeated calls for the Malaysian Anti-Corruption Commission to be given more bite to compel individuals to declare their assets.
To do that, 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 assets without the MACC first launching a formal corruption investigation.
This week, deputy chief commissioner of the MACC, Shamsun Baharin Mohd Jamil, announced that the provisions in Section 36 of the MACC Act 2009 are scheduled to be tabled in Parliament by year end.
The new proposal is in line with the anti-corruption law in Hong Kong which makes it an offence for a public officer to live beyond his means.
Hong Kong’s Independent Commission against Corruption (ICAC) has the power — enforced under Section 10 of the Prevention of Bribery Ordinance — to compel a person with “tremendous wealth” which does not match the income of his position to declare his or her assets.
HARD TO PROVE THE OFFENCE
“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 law in many jurisdictions as an offence under organised crime or money laundering when proving the primary offence against the offenders was not always possible.
Former deputy commissioner of ICAC, Daniel Li, said there were not more than three prosecutions on living beyond means in Hong Kong and 20-odd cases of possession of disproportionate assets.
The conviction rate was over 70 per cent and all these cases took place in the 70s and 80s and people were mostly satisfied with the effectiveness of this provision.
Since then there has not been a single prosecution and basically the offences now remain only in statutes.
The provisions were very effective when first introduced to nab corrupt officials who had no previous knowledge of such offences and were living in luxury.
As such persons gradually learnt how the authorities investigated the accumulation of assets and became aware of the law, they devised ways to hide their assets so as to be seen as living normal lives.
COMMON DEFENCE
The offences will make life more difficult for the corrupt even if they become smarter and hide their assets.
Regulators need to put in extra effort and resources to do the job.
From a law enforcement perspective, the strategy has to change.
Investigators should probe straightforward bribery which is more satisfying in terms of getting the evidence and securing a successful prosecution.
The burden of proof is still on the prosecution but it needs to only show that there is unexplained wealth that is not commensurate with the accused’s earning capacity.
The defendant is, of course, entitled to explain how he accumulated his assets.
If he is unable to give a satisfactory explanation to the court, it is an offence.
A common defence is that his wealth was inherited from relatives or from other sources of income.
The Anti-Money Laundering and Anti-Terrorism Financing criminalises money laundering of proceeds from serious crimes.
The agencies can freeze, seize or confiscate a person’s property during an investigation.
More specifically, to make that concept a reality, law enforcement agencies have substantially enhanced forensic accounting capabilities with professional accountants qualified and trained in forensic accountancy.
Just like the ICAC, this group is tasked with projects that include asset tracing, analysis and interpretation of financial data, examining accounting records to establish their evidential value, and interviewing bankers.
With advances in information technology and rapid changes in the financial markets, corruption-related financial fraud cases are becoming more complex and multi-jurisdictional.
This is because evidence can be buried in layers of fund flows, offshore companies and through innovative and aggressive accounting techniques.
That is why forensic accountancy has become an integral part of our investigation techniques.
In fact, the law has to match the needs of the country and be revised from time to time to suit changing corrupt practices and environment.
After a period of enforcement, people, including corrupt people and bribers, begin to understand the legislation.
If one wants to get involved in corrupt practices, white-collar criminals will find “creative ways” to avoid detection.
ICAC relied very much on Section 10 to catch the most corrupt government servants in the early days, then changed tactics to focus on conventional bribery offences only to find the lawbreakers were later smart enough to leave little evidence.
ICAC then asked for more intrusive investigative powers to secure adducible evidence for the purpose of laying out a prosecution.
Furthermore, the best corruption law will not stay the best for long.
It will have to be reviewed so that it is able to sustain its deterrent effect on the bribers and the corrupt.
The writer holds a Professorial Chair for Crime and Criminology at the Institute of Crime and Criminology, HELP University