Unexplained silence over unexplained wealth – Hafiz Hassan | What you think

JANUARY 3 – Malaysia is a signatory to the United Nations Convention against Corruption (UNCAC). The UNCAC is an international instrument to combat the scourge of corruption at the global level.

The adoption of the UNCAC in 2003 sent a clear message that the international community was, and continues to be, committed to preventing and controlling corruption. He should warn the corrupt that betrayal of public trust will no longer be tolerated.

The UNCAC is the affirmation by the international community of the importance of fundamental values ​​such as honesty, respect for the rule of law, accountability and transparency to promote development and make the world a better place for all. .

A historic instrument, the UNCAC introduces a comprehensive set of standards, measures and rules that all countries can apply in order to strengthen their legal and regulatory regimes to fight corruption. It calls for preventive measures and the criminalization of the most widespread forms of corruption in the public and private sectors.

It also obliges member states to return assets obtained through corruption to the country from which they were stolen – a major international breakthrough as the UNCAC provides a framework for effective action and international cooperation.

In his foreword to the UNCAC, then Secretary General Kofi Annan wrote of the provisions it contained:

“These provisions – the first of their kind – introduce a new fundamental principle, as well as a framework for enhanced cooperation between states to prevent and detect corruption and to return the proceeds. Corrupt officials will find fewer ways to hide their illicit earnings in the future.

“This is a particularly important problem for many developing countries where corrupt senior officials have plundered national wealth and where new governments are in dire need of resources to rebuild and rehabilitate their societies. “

Regarding illicit earnings in particular, Article 20 states the following:

“Subject to its constitution and the basic principles of its legal system, each State Party shall consider adopting the legislative and other measures necessary to establish as a criminal offense, when committed intentionally, illicit enrichment, that is, that is, a significant increase in the assets of a public official that he cannot reasonably explain in relation to his legitimate income.

Although Article 20 above recommends that Member States criminalize illicit enrichment, some, including Malaysia, have not yet legislated specifically on the issue. And there is “no unanimously applied definition of illicit enrichment”, although the term there is defined in Article 20 as a “significant increase in the assets of a public official that he cannot reasonably explain. compared to his legitimate income. “

So, based on his research on laws around the world, Andrew Dornbierer offers the following definition:

“The act of illicit enrichment can be broadly defined as the enjoyment of an amount of wealth which is not justified by reference to lawful income.” (Dornbierer, A., 2021. Illicit Enrichment: A Guide to Laws Targeting Unexplained Wealth. Basel: Basel Institute on Governance.)

The expression “not justified by a reference to lawful income” refers to the absence of evidence demonstrating the legitimate or non-criminal sources from which the valued wealth derives (such as salaries, profits from legitimate businesses, retirement payments, inheritances, gifts or even bank loans).

Dornbierer offers a simple example:

If a person worked as a public assessor from 2010 to 2020 and earned a cumulative total salary of US $ 400,000 during that time, but instead had US $ 4,000,000 in their bank account at the end of this period, then if it is not possible for the individual to demonstrate that the additional $ 3,600,000 came from other legitimate sources of income existing during that period (such as a loan from a bank, income from a side business or receipt of an inheritance) then under an illicit enrichment law the court may presume that this unjustifiable increase in wealth does not come from lawful sources and will impose an appropriate sanction , even if no evidence of underlying or distinct criminal activity is presented in court.

Simply put, illicit enrichment is wealth that is not lawful income in the absence of evidence to the contrary.

In his book, Dornbierer appends a compilation of illicit enrichment legislation and other relevant legislation which he categorizes as:

  • Criminal laws on illicit enrichment
  • Qualified criminal laws on illicit enrichment
  • Civil Laws on Illicit Enrichment
  • Qualified laws on illicit civil enrichment
  • Administrative laws on illicit enrichment; Where
  • Other relevant laws
Illicit enrichment is wealth that is not lawful income in the absence of evidence to the contrary.  - Photo by Bernama
Illicit enrichment is wealth that is not lawful income in the absence of evidence to the contrary. – Photo by Bernama

As the above indicates, the book provides a comprehensive guide to illicit enrichment laws and their application to target unexplained wealth and recover the proceeds of corruption and other crimes. The book covers both criminal and civil laws around the world.

Malaysia’s only entry in the compilation of laws falls into the second category above. This is a qualified criminal law on illicit enrichment because it requires the state to provide a court with evidence of a “reasonable suspicion” or “reasonable belief” that some kind of criminality under investigation. -jacent or distinct has occurred.

The law can be found in section 36 of the Malaysian Anti-Corruption Commission (MACC) Act, 2009 which provides for the power to obtain information, based on an investigation by an official of the Commission. , indicating that a good is owned or acquired by any person. following or in connection with a breach of the Law.

In recent years, a concept has gained ground: unexplained wealth. It refers to valuable assets owned by government officials – or others in positions of power and influence – that are clearly out of step with their publicly declared income or known business interests. (See Organized Crime and Corruption Reporting Project (OCCRP), “What is ‘unexplained wealth’?”)

At the heart of the concept is a very simple mathematical formula: Unexplained wealth = Total wealth minus legally acquired wealth.

Thus, a person whose total wealth is RM 5 million, and whose legally acquired wealth is RM 2 million, can be considered to have unexplained wealth of RM 3 million.

The concept is now a key part of the UK’s Criminal Finances Act 2017 (CFA) – dubbed the ‘McMafia’ laws after the BBC’s organized crime drama – which introduces new measures to help the forces of the United Kingdom. order to act on corrupt assets.

One of the measures is something called Unexplained Orders of Wealth (UWO).

UWOs give law enforcement authorities such as the National Crime Agency (NCA), Her Majesty’s Revenue and Customs (HMRC), and the Serious Fraud Office (SFO) the ability to seize assets suspected of coming from the proceeds. criminal activity.

A UWO requires the individual, rather than the executing authority, to prove how he or she has accumulated his or her wealth. He must produce evidence to verify the sources of the wealth, failing which the property may be recovered by civil forfeiture.

Orders freezing accounts or provisional (AFO / IFO) can also be taken and criminal penalties imposed. UWOs thus offer law enforcement authorities the ability to confiscate assets without ever having to prove that the assets were obtained through criminal activity.

According to Dornbierer, the two terms – illicit enrichment and unexplained wealth – are currently used interchangeably to refer to the exact same, or an incredibly similar set of circumstances.

Both are controversial legal concepts. Some see them as essential tools in the fight against corruption and other crimes and asset recovery while others see them as a violation of common legal principles. But they have both been effective in fighting corruption and collecting the proceeds of crime.

Dornbierer writes:

“[T]here there is no doubt that [the] laws have remarkable potential in the area of ​​asset recovery. Following the successful application of these types of laws in a number of jurisdictions, it is not surprising that an increasing number of countries are turning to these mechanisms to target corruption and crime in general, and to recover the proceeds. of crime.

Malaysia may not be one of this growing number of countries. But the government of Pakatan Harapan (PH) – to his credit – has considered introducing similar legislation to CFA with similar measures.

Finance Minister Lim Guan Eng said measures such as UWOs would allow the government to seize “extraordinary assets” held by individuals, especially politicians.

“We want to get the government money back, which is why the Attorney General is studying this provision introduced in the UK,” he said during a 2019 budget dialogue session at the Equatorial Hotel.

Nonetheless, Malaysia should send a clear message that it is determined to require officials and individuals in positions of power and influence to ‘explain’ property belonging to them which is clearly out of step with their declared income. publicly or their activities known.

This by asking the Chief Commissioner of the Malaysian Anti-Corruption Commission (MACC), Tan Sri Azam Baki, to break his deafening silence over his alleged possession of millions of publicly traded shares.

It is an unexplained silence.

As Muhammad Mohan, President of Transparency International Malaysia (TI-M) said, this will affect the perceptions the rest of the world has of Malaysia and the MACC. These, in turn, will potentially lower indices such as the Corruption Perceptions Index and the Global Corruption Barometer.

* This is the personal opinion of the author or post and does not necessarily represent the views of Malaysian courier.

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