Ways to stem money laundering
United Nations Convention against Corruption (UNCAC) is the first global legally binding instrument in the fight against corruption and to harmonise anticorruption efforts worldwide.
The convention was adopted by the UN General Assembly in its Resolution 58/4 on Oct 31, 2003 and entered into force on Dec 14, 2005. UNCAC has 184 state parties, with 140 country signatories.
Malaysia signed the convention on Dec 9, 2003 and subsequently ratified it on Sept 24, 2008. It entered into force on Oct 4, 2008, for Malaysia.
The objectives of the convention are:
promote and strengthen the measures to prevent and combat corruption more efficiently and effectively;
promote, facilitate and support international cooperation and technical assistance in the prevention of and fight against corruption, including asset recovery; and,
promote integrity, accountability and proper management of public affairs and property.
The convention requires member countries to establish a range of offences associated with corruption and devote a separate chapter on its prevention.
In a major breakthrough, it includes innovative and far-reaching provisions on asset recovery, as well as on technical assistance and implementation.
In 2009, UNCAC signatory countries agreed to set up an Implementation Review Group to assess the status of UNCAC implementation in member countries.
The First Review Cycle for Malaysia on Criminalisation and Law Enforcement, as well as International Cooperation, was carried out by the Philippines and Kenya from Feb 4 to 8, 2013. The summary review report was published on May 28, 2013 and submitted to the United Nations Office on Drugs and Crime (UNODC) on May 30, 2013.
The Second Review Cycle on Preventive Measures and Asset Recovery was carried out by Timor Leste and Swaziland in July last year.
This summary review report was published on Oct 2 the same year and submitted to UNODC on Nov 7.
From the executive summary for Chapter V (Asset Recovery), it was recommended that Malaysia:
whether a more streamlined procedure to providing assistance to countries with which Malaysia has no treaties or agreements — instead of the current process where the minister issues a special direction — would facilitate cooperation on asset recovery. Malaysia is encouraged to develop an asset recovery guide to clarify procedural requirements for requesting countries;
in the law recovery mechanisms for injured parties to establish title or ownership of property, or be awarded compensation or damages for injuries, through domestic proceedings;
mechanisms for the preservation of property pending confiscation, including through the establishment of a central asset management office and consider adopting comprehensive asset management guidelines; and,
measures providing for the return of proceeds to requesting states in cases of embezzlement of public funds or the laundering of embezzled public funds, including by reviewing relevant treaties.
It is important that corruptionrelated money laundering, that is facilitated by the banking sector, the real estate and luxury goods markets, is one such area which our enforcement agencies should be looking at for reforms.
Company secrecy laws, complex ownership structures, and complicity and complacency among members of both the private and public sectors create a protective veil for the people benefiting from corrupt practices and also obstruct law enforcement investigations.
It is necessary for the government to increase efforts to stem money laundering by:
public registers of beneficial ownership to end company ownership secrecy;
bank scrutiny of politically exposed persons; and,
luxury investments and enforce existing regulations.
Former vice-chair, United Nations Convention against Corruption Coalition, Subang Jaya, Kuala Lumpur