NINTH REGIONAL SEMINAR ON GOOD
GOVERNANCE FOR SOUTHEAST ASIAN COUNTRIES

Hosted by UNAFEI
With the support of the Corruption Eradication Commission and the Attorney
General’s Office of Indonesia
24-26 November 2015, Jakarta, Indonesia

March 2016TOKYO, JAPANThe views expressed in this publication are those of the respective presenters andauthors only, and do not necessarily reflect the views or policies of UNAFEI, theGovernment of Japan, or other organizations to which those persons belong.

YAMASHITA Terutoshi
Director
United Nations
Asia and Far East Institutefor the Prevention of Crime andthe Treatment of Offenders(UNAFEI)
1-26 Harumi-cho, Fuchu, Tokyo 183-0057, Japan

http://www.unafei.or.jp
unafei@moj.go.jp

FOREWORD
It is my great pleasure and privilege to present this report of the Ninth Regional Seminaron Good Governance for Southeast Asian Countries, which was held in Jakarta, Indonesia
from 24–26 November 2015. The Good Governance Seminar was held in Indonesia for the
first time, and we were deeply impressed and touched by the warm hospitality afforded to us
by our Indonesian hosts.
The main theme of the Seminar was “Current Challenges and Best Practices in theInvestigation, Prosecution and Prevention of Corruption Cases—Sharing Experiences andLearning from Actual Cases”. The Seminar was attended by one visiting expert from Hong
Kong and 19 criminal justice practitioners who attended from Brunei, Cambodia, Indonesia,
Lao PDR, Malaysia, Myanmar, the Philippines, Thailand and Viet Nam. The Seminar was
co-hosted by UNAFEI, the Corruption Eradication Commission (KPK) and the Attorney
General’s Office of the Republic of Indonesia.
The Seminar explored the legal frameworks and techniques for anti-corruption
enforcement in the participating countries, particularly in reference to international
cooperation, asset recovery, and public–private partnerships to combat and prevent corruption.
Through discussion of the issues, participants exchanged knowledge, experiences, effective
strategies, and best practices in the field of anti-corruption. In addition, the Seminar enabled
the participants to develop personal and professional contacts between anti-corruption
authorities and investigators in Southeast Asia.
The discussions during the Seminar emphasized the following lessons, such as theimportance of: (1) informal information sharing among anti-corruption authorities, (2)enhancing specialized financial knowledge among investigators and prosecutors to increase
the effectiveness of asset recovery, and (3) engaging the private sector and the general public
to identify and prevent acts of corruption. The Chair’s Summary, published in this report,
details the key findings and conclusions of the Seminar.
It is a pleasure to publish this Report of the Seminar as part of UNAFEI’s mission,
entrusted to it by the United Nations, to widely disseminate meaningful information on
criminal justice policy. Finally, on behalf of UNAFEI, I would like to express my sincere
appreciation to the KPK and the Attorney General’s Office of the Republic of Indonesia for
their tremendous support in co-hosting the Ninth Regional Seminar.

YAMASHITA Terutoshi
Director, UNAFEI
March 2016

INDEXCURRENT CHALLENGES AND BEST PRACTICES IN THE INVESTIGATION,PROSECUTION AND PREVENTION OF CORRUPTION CASES—SHARING
EXPERIENCES AND LEARNING FROM ACTUAL CASES
Introduction ................................................................................................................................... 1
Opening Remarks by Mr. Terutoshi Yamashita, Director, UNAFEI ........................................ 2
Opening Remarks and Keynote Address by Mr. Adnan Pandu Praja, Vice Chairman,
Corruption Eradication Commission of the Republic of Indonesia ................................. 4
Keynote Address by Mr. Taro Morinaga, Deputy Director, UNAFEI ..................................... 9
Report of the Seminar
Chair’s Summary..................................................................................................................... 16
Papers and Contributions ............................................................................................................ 25
Visiting Expert, Mr. Tony Kwok Man-wai, Anti-Corruption Consultant and former
Vice Commissioner of the Independent Commission Against Corruption, Hong Kong...... 26
Brunei Darussalam .................................................................................................................. 58
Cambodia ................................................................................................................................ 67
Indonesia ................................................................................................................................. 78
Lao PDR .................................................................................................................................. 88
Malaysia ................................................................................................................................ 101
Myanmar ................................................................................................................................112
Philippines ..............................................................................................................................118
Thailand................................................................................................................................. 169
Viet Nam ............................................................................................................................... 176
List of Participants, Speakers and Organizers ........................................................................... 185
Seminar Schedule ...................................................................................................................... 187
Appendix ................................................................................................................................... 189
Photographs ....................................................................................................................... 190

INTRODUCTION

Opening Remarks by
Mr. Terutoshi Yamashita
Director of UNAFEI***
Mr. Adnan Pandu Praja
Vice Chairman
Corruption Eradication Commission
Republic of Indonesia***
Keynote Address by
Mr. Taro Morinaga
Deputy Director, UNAFEI-1-

OPENING REMARKSYAMASHITA Terutoshi *Honourable guests, distinguished experts and participants, ladies and gentlemen,
Good morning. I am YAMASHITA Terutoshi, Director of UNAFEI.
First of all, I would like to apologize for not being able to attend the seminar this year.
Personally, I have deep interest in this seminar in Jakarta because I had made theacquaintances of many criminal justice officials including many Indonesian practitioners
when I was a faculty member of UNAFEI for three years beginning in 1995. Also, I
conducted research on the judicial system of Indonesia as a member of a JICA research groupin 2002 and published a research report on the Indonesian justice system in Japanese. I
believe that the report has led to JICA projects in the field of Indonesian civil and commercial
law. So, I am filled with fond memories when I reflect upon those days.
As for this seminar, its main theme is “Current Challenges and Best Practices in theInvestigation, Prosecution and Prevention of Corruption Cases – Sharing Experiences andLearning from Actual Cases”. Not only legal systems but also actual practices are importantwhen considering the criminal justice response to corruption. Sharing actual cases is the mosteffective way for practitioners to learn the current situations and challenges in each country.
In this seminar, you will focus especially on the following two sub-topics: The first is“Mutual Legal Assistance and Recovery of Proceeds of Corruption” and the second is“Public–Private Partnership to Prevent and Detect Corruption”. Nowadays corruption crosses
international borders easily, and criminal justice officers need to cooperate with foreignauthorities in collecting evidence during the investigation and prosecution of corruption cases.
We are expected to rapidly identify, trace, freeze, confiscate and repatriate illicit proceeds ofcorruption that have poured out to other countries. So, importance should be placed onstrengthening cooperation with authorities in other countries through mutual legal assistanceand informal information exchanges.
On the other hand, investigative and prosecutorial authorities to detect and punish
corruption have faced difficulties because the modus operandi of corruption is becoming
more complicated and sophisticated. Cooperation with the private sector must also be
strengthened in order to prevent and detect corruption effectively. We need to improveinformation sharing related to corruption cases from the private sector through effective
whistle-blower protection programmes, witness protection programmes and so on. It is
important to collaborate with private companies and the general public before corruption iscommitted. Eradication of corruption is difficult unless we take general and comprehensive
countermeasures not only from the perspective of law enforcement but also from theperspective of prevention. I hope this seminar will enhance and improve the practices ofinvestigation, prosecution and prevention of corruption in Southeast Asian countries through*Director, United Nations Asia and Far East Institute for the Prevention of Crime and the Treatment of
Offenders.

-2-discussion and the exchange of practical insights.
Before concluding, I would like to take this opportunity to express my deepest
appreciation to the government of Indonesia, especially to the Attorney General’s Office of
the Republic of Indonesia and the Corruption Eradication Commission (KPK), for their great
contribution and assistance in co-hosting this seminar.
Thank you very much for your attention.

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OPENING REMARKS & KEYNOTE SPEECH
Mr Adnan Pandu Praja *The honorable:
Mr Kozo Honsei, Deputy Chief of Mission at the Embassy of Japan,
Mr Taro Morinaga, Deputy Director of the United Nations Asia and Far East Institutefor the Prevention of Crime and the Treatment of Offenders,
Ms Laksmi, Acting Head of the Legal and International Relations Bureau at the
Attorney General’s Office,
Our visiting expert Mr Tony Kwok, former Deputy Commissioner of ICAC Hong
Kong,
Mr Da’i Bachtiar from the Indonesia Crime Prevention Foundation,
Distinguished participants of the seminar from fellow countries in Southeast Asia,
And esteemed colleagues from the National Police, the INTRAC, Financial Services
Authority, Ministry of Finance, Ministry of Foreign Affairs and Ministry of Law and
Human Rights.
Assalamu’alaikum wa rahmatullahi wa barakatuh, and good morning to all.
On behalf of the Corruption Eradication Commission, I would like to welcome you to
the Ninth Regional Seminar on Good Governance for Southeast Asian Countries. In the past
years, our Commission has benefited from the wealth of knowledge shared during theprevious seminar sessions. Thus, I am very happy that this year we, in cooperation with
UNAFEI and the Attorney General’s Office, have the privilege of hosting it here in Indonesia.
My heartfelt thanks to the staff at UNAFEI, AGO, and also KPK for all the work done inpreparing and organizing the seminar.
Ladies and Gentlemen,
Here, we come from different backgrounds, from various countries with differing legal
systems, from the same country but different institutions, carrying out different functions.
However, I believe that we share something in common, a desire to learn from one anotherand to stay up-to-date on how we can accomplish our mandates in order to tackle the problem
that is corruption. We all know the harms of corruption, and that it needs to be stamped down.
To do that, it is important that we identify the current situation and challenges in the field, inorder to formulate the best and feasible strategies to overcome them.

*Vice Chairman, Corruption Eradication Commission of the Republic of Indonesia.

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I.

SOPHISTICATED METHODSWith regard to corruption, some aspects of it remain constant, namely the presence ofauthority and the abuse of it for personal gain. However, it is not the case with the methods
used. At the popular level, people may think of corruption as the straightforward giving andtaking of bribes linked to an official’s act in favor of the briber, or the manipulation ofrecords in order to embezzle money from the state budget. Yet, practitioners know that
increasingly complex and sophisticated measures have been used in order to obscure corrupt
deeds and hide the proceeds of crime.
An example that we notice is the trend of the corruptive state budgeting cycle. In
Indonesia’s decentralized system, there are two kinds of state budget, the central government
budget or APBN, and the regional government budget or APBD. The trend is for corruption
to start during the planning stage, when marked up goods and services procurement, withprices above the official general cost standards without sufficient explanation, are embeddedin the APBD. If the marked up projects get approved by the local Parliament, often there are
already “backers” from within local legislators. By the time the project is implemented, theactual funds used for the goods and services is just a fraction of what’s proposed. The nextyear, when audited by the Supreme Audit Board, the project becomes a finding, which isgrounds for interpellation by the local Parliament. Yet instead, it passes the local Parliament
easily, which suggests that here too, is a point of risk of collusion or extortion between
executive and legislative. The corruptive budgeting cycle can be prevented if the regional
inspectorates and the people are involved in transparent and participatory budgeting from the
beginning to ensure that the state budget appropriately meets the people’s needs.
Another example of methods involves layering of transactions associated with money
laundering, with the use of gatekeepers and also shell companies that are sometimes locatedoverseas. With regard to anticipating gatekeepers, this year a Government Regulation 1 has
been issued, making it obligatory for professions often associated with gatekeeper activity
such as accountants, advocates, notary public and financial service providers to reportsuspicious transactions to the INTRAC.
In general, to anticipate such methods, law enforcement agencies need to stay current
and share information as well as lessons learned from cases on the ground.
II.

ASSET TRACING

Another area of challenge encountered during investigation and prosecution isregarding asset tracing, especially when it involves the jurisdiction of another country. The
procedure, including the use of MLA, can take up a long time, especially as it involves theneed to understand a different set of rules. Through experience, good communications built
upon a well-maintained cooperative relationship helps during the formal and informal
coordination to facilitate the process between the requesting and requested countries.

1

Peraturan Pemerintah (Government Regulation) number 43 year 2015.

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With regard to asset recovery especially, earlier this month in the 6th Conference of theStates Parties to the UNCAC in Saint Petersburg, state parties have agreed to begin thesecond review cycle covering Prevention and Asset Recovery in the next year. I look forward
to the implementation review mechanism to foster compliance with articles 51 to 59 among
ratifying countries so as to assist efforts in recovering the proceeds of corruption.
III.

RESOURCE BALANCING

Going back to the national context, our institutional challenge. Our country Indonesia’s
territory spans almost 2 million square kilometers of land, with a population of roughly 250
million. Our civil servants number at around 4.3 million. Meanwhile the KPK currently has
around 1200 employees, of which less than 200 are investigators or prosecutors. Striking abalance between the needs for quantity of law enforcement personnel and ensuring they havethe appropriate qualifications and capability is a challenge for management.
Likewise, in terms of facilities such as the availability of examination rooms, resources
needed for site visits in remote areas. One proposal that we are exploring, which is allowableby the KPK Law but still needs to be agreed upon by the Parliament, is to set up provincial
branches. Another proposed measure is to improve the effectiveness of KPK’s coordinationand supervision role through an electronic mechanism, what I’d call e-korsup. The
framework for this mechanism would include real-time notice of the starting and progress ofa case investigation. It can also allow us to gather data on the distribution and typology ofcorruption throughout the country as a basis for planning and policy-making.
IV.

INTERPRETATION OF LAW

Another challenge we face is in the area of interpretation of laws. In Indonesia’s legal
system based on civil law, judges decide on cases based on code provisions on a case-by-casebasis, independent of precedence. In practice, this may cause confusion when the law isvaguely worded, or in the presence of contradictory regulation, or not well-adapted to recent
advances, such as the increasing sophistication of criminal methods mentioned earlier.
Different judges may rule differently on the same thing, such as the validity of investigations
conducted by KPK independent investigators, who are not seconded from the Police Force or
the Attorney General’s Office.
During the period from 2000 to 2015, the government has issued 12, 471 regulations 2,
most of which are ministerial level regulations, around 8400 of those, followed bypresidential level regulations, as well as 916 bills.
Regarding bills, a concerning trend is the increase of judicial review at theConstitutional Court. From 2003 to 2015, the Constitutional Court has ruled in favor of 182
judicial review requests 3, including one that allows the pre-trial mechanism to challenge thevalidity of designation of suspects. This ruling has become an extra step for suspects to seek

2Strategi Nasional Reformasi Regulasi: Mewujudkan Regulasi yang Sederhana dan Tertib. Kementerian
PPN/Bappenas, 2015.
3
See <http://www.mahkamahkonstitusi.go.id/index.php?page=web.RekapPUU>.

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revocation through the decision of a single judge while investigation is ongoing, which inturn changed the way law enforcement officers work.
Another indicator is from the 2013 Worldwide Governance Indicators, which scoredthe regulatory quality in Indonesia at 46 per cent.
A concerted effort involving lawmakers—in this case the legislative and executive
branch of the government—is needed in order to improve the quality of regulations. On thatfront, I appreciate that the Ministry of Development Planning has launched the National
Strategy for Regulation Reform covering the period of 2015 to 2025, and hope that it is a signof political will to achieve not only deregulation that leads to ease of business but also good
governance.
On the practitioner's side, we also try to tackle this challenge by coordination efforts,
including joint trainings to harmonize the views between investigators, prosecutors andjudges, for example the recent Judge’s Dialogue series on Anti Money Laundering andCriminal Asset Confiscation.
V. KPK’s ACTIVITY IN INTERNATIONAL COOPERATION
During a two-day conference of the world’s anti-corruption institutions held by KPK in2012, the participants jointly drafted the Jakarta Principles—16 rules to reinforce anticorruption institutions in the world. In the same year, the Southeast Asia Parties Against
Corruption (SEAPAC) workshop strengthened the strategic commitment among Southeast
Asian countries to restrict the movement of corruptors.
In 2013 through the Asia Pacific Economic (APEC) forum that has wider reach, KPK
as host of the Anti Corruption and Transparency Working Group (ACTWG) was initiated the
APEC Anti-Corruption Network (ACT-Net), a cooperation forum between anti-corruption
agencies in APEC countries. KPK felt that the establishment of such networks is important
given Indonesia’s experience. A number of corruptors have escaped abroad to avoid criminal
sentences, and assets from corruption have also been stacked in other countries, complicating
the issue. With ACT-Net, the issues related to jurisdiction, citizenship and dual criminality
could be settled more easily.
KPK also initiated the formation of the Economic Crime Agency Network (ECAN).
The network consists of law enforcement agencies in various countries, such as the FBI fromthe United States, Singapore’s CPIB, Malaysia’s MACC, the United Kingdom’s SFO, OLAF
in the European Union, and the SFO New Zealand. The cooperation helps provide data andinformation required in corruption investigation.
Ladies and Gentlemen,
The revitalization of the anti-corruption movement in Indonesia in the post-1998 era
has come to an important juncture, where it’s time to evaluate what works, what needs to bestrengthened, and what needs to be adjusted, while avoiding the pitfalls of overlooking longterm efforts. We also learn from the history of steadfastness of the anti-corruption authorities
in our fellow countries, like in the 38 years of ICAC Hong Kong, 48 years since the Malaysia
ACA—now MACC, 63 years of CPIB Singapore, all with their ups and downs.

-7-Lastly, I wish you a successful and beneficial seminar, and good times in Indonesia
especially to those who are here the first time. May we all bring from here not only
knowledge, but also better rapport upon which effective communication and cooperation
shall be built.
Thank you, wassalamu’alaikum wa rahmatullahi wa barakatuhu.

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KEYNOTE ADDRESSNINTH REGIONAL SEMINAR ON GOOD GOVERNANCEFOR SOUTHEAST ASIAN COUNTRIES(JAKARTA, 24 – 26 NOVEMBER 2015)
Taro Morinaga *I.

INTRODUCTION

Before beginning with my remarks, I just would like to say that it is really a greathonour and privilege for me to be given an opportunity to deliver the keynote address in thepresence of such honourable guests, learned experts and distinguished participants gathered
here at this meaningful occasion. UNAFEI is truly grateful as to the efforts made by all those
who have been involved in the planning, preparation and implementation of this NinthRegional Seminar on Good Governance here in Jakarta. I would like to express special thanks
to the people of the Attorney General’s Office of the Republic of Indonesia and the
Corruption Eradication Commission for their tremendous job of co-hosting, as well as fortheir kindness and hospitality.
Each year, the purpose of this seminar is to discuss and share with each otherexperiences, information and insights about investigation, prosecution and prevention ofcorruption cases. This year, the focus will be on the two topics we have chosen in advanceand which were approved by our co-hosts.
The idea of choosing the first topic of this year’s seminar, “mutual legal assistance andasset recovery”, stems from our perception that, although fighting against corruption has
already become quite an international issue, law enforcement and the judiciary have so far
been unable to keep up with the rapid pace of internationalization of corruption crimes. In
order to outpace this trend, investigators, prosecutors and also the courts need to be backed
up with effective systems, equipped with practical knowledge, skills and handy tools, andprovided with information and support which enable them to do their jobs effectively andefficiently, even if the cases before them involve international elements and requirecross-border activities — just as though they’re just dealing with any other domestic case.
The second topic “public-private partnership in the prevention and detection ofcorruption” reflects our view that today it is no longer possible for any law enforcement
agency or officer to take effective action towards the detection and prosecution of crimes ofcorruption without the strong support and cooperation of the general public. This is true not
only for the detection, investigation and prosecution of already committed crimes, but also
for prevention. The issue of public–private partnership also extends to the area of raisingawareness among the general public as to the perilous and damaging nature of corruption
with respect to which school education, as well as social activities for the promotion of good
governance and integrity in the private business sector, are especially important.
*

Deputy Director, United Nations Asia and Far East Institute for the Prevention of Crime and the Treatment of
Offenders (UNAFEI).

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Since the scope of the two topics is very broad, one may imagine a huge variety of
discussions spotlighting the relevant issues from many different angles. However, what wehave in common in this forum is that most of us are practitioners, not policymakers or
academics. So, naturally, our discussion will be, and ought to be, anchored in our individual
or institutional experiences in the field. Our express or implied message that could bereflected in the results of our discussion during the next two days might bear thecharacteristics of a shared opinion from a practitioner’s point of view. That message issomething we can all bring back home and hopefully utilize for the improvement of ourindividual or institutional capacity to tackle crimes of corruption. But at the same time, it isalso my hope that our message will serve as a catalyst for the improvement of ouranti-corruption systems and legal frameworks. And I would be more than delighted if thatmessage eventually leads to the raising of awareness and enhancing of the commitment ofpolicymakers and the general public to fight against corruption in each of our jurisdictions,
resulting in enlarged allocation of human and financial resources to the efforts being madetowards the eradication of corruption.
II.

MUTUAL LEGAL ASSISTANCE

In our last seminar in Kuala Lumpur, I mentioned the psychological barriers that makeinvestigators and prosecutors reluctant to pursue activities involving international matters
including the use of mutual legal assistance. Although I still believe that such psychologicalhindrances are one of the biggest obstacles which must be overcome by practitioners, it istrue that sometimes the difference in the systems and practices between countries can be an
obstacle when trying to obtain evidence from abroad or to have a suspect extradited. In spiteof that, we have heard of many examples of cases which were prosecuted successfully, cases
in which investigators and prosecutors equipped with adequate practical knowledge and skills
have overcome obstacles by making use of every possible tool and channel available to them.
I believe that, behind such success, there must have been a good understanding and sufficientknowledge among the investigators and prosecutors of the systems and practices of theirrespective counterparts and a shared idea about what it is like to be involved in a corruption
investigation. And if you would like to understand and make use of systems and practices of aforeign country or jurisdiction, you will be required to be very flexible in your way of
thinking. There may be systems and practices which you have never heard of before, and you
may be puzzled by those, but if you study those systems or practices carefully with an open
mind, you will find out that every system or practice has its own rationale and background,and there is a way to connect the foreign system or practice to your system or practice.
Figuratively, every system or practice can “interface” with another system or practice. All
you have to do is to find, with the help of your flexible thought, the interface.
Now, let me tell you about an example of how my mind was inflexible when I
encountered international assistance for the first time in my career as a Japanese prosecutor— a small experience which was very much eye-opening for me.
As far as I recall, it was in my fourth year as a public prosecutor when I was ordered tojoin an investigation team of prosecutors at the Tokyo District Public Prosecutors Officehandling a fraud case that had quite an international feature. An international business lawyer,
in conspiracy with an executive of an international courier company, defrauded a corporationin Tokyo of 3 million US Dollars. The corporation filed a criminal complaint with the Tokyo
District Public Prosecutors Office, and the investigation was carried out by its prosecutors- 10 -

without any involvement of the police force. The lawyer and his accomplice recommended
the victimized corporation to purchase a quite sophisticated, high-tech industrial garbage
disposal machine invented and produced by a company in Switzerland. The victim was
persuaded to enter into a contract to purchase of one of those machines at the wholesale priceof 3 million US Dollars, but the actual wholesale price offered by the Swiss company was
only 1 million US Dollars. The suspects forged the relevant documents and received 3 million
Dollars from the victim by wire transfer to a bank account which the suspect had opened in
Switzerland. As the investigation proceeded, we found clues indicating that a substantial partof the money in that bank account may have been subsequently transferred to several bankaccounts in Switzerland, England, Canada, the United States and the Commonwealth of the
Bahamas. So, we went on trying to obtain the records of these bank accounts, and for that
purpose we requested, via the proper channels, assistance in investigation from thesecountries. Since our lead prosecutor, having had some diplomatic experience, knew that only
sending papers to these countries may not be very effective, he decided to visit the relevant
authorities of these countries, and asked me to help him with that. He went to Switzerland,
England and Canada, and I went to the US and the Bahamas.
Now, all of our requests for assistance to these states, except the Bahamas, were very
quickly responded to and good results were achieved in due time. Actually, I was very muchsurprised that the first substantial response came from the US within two weeks, from a US
assistant district attorney of the Southern District of California. But the relevant authority inthe Bahamas withheld its response for some reason and said that it would wait until I arriveand give them a detailed explanation. So, after finishing my task in Washington and Chicago,
I flew to Nassau and visited the Department of Legal Affairs.
There, I was welcomed by a rather high-ranking officer in charge, the Director ofInternational Affairs, who bothered to have a thorough discussion with me. In addition to the
explanation about the whole case and the necessity to obtain the bank account records, heasked me to explain the Japanese prosecution system and the role of public prosecutors. After
carefully listening to my explanation, with some crucial questions and answers in between, hetold me, that, with regret, he had no other choice than to turn down our request. According to
his explanation, in order to obtain a bank account record in the Bahamas, where protecting
bank secrecy is a national policy, a court order is needed, and for a court in the Bahamas toissue an order to that effect based on a request from a foreign country, it needs to have arequest from the “judiciary” or an “equivalent authority” of the requesting country. And thereason why the Ministry of Legal Affairs withheld its response was that they were not surewhether the Japanese authority which made the request — the Japanese prosecution — can be
regarded as being, in the context of applicable laws of the Bahamas, an “equivalent authority”
if not considered a part of the “judiciary”, and had needed further information on this point. I
once again tried to persuade him that the Japanese prosecution is to be understood as being a“quasi-judicial organ” and should be qualified to make the request to a Bahamian court. But
the Director cited a precedent in which the High Court of the Bahamas refused the assistancerequest from a US Federal Grand Jury for the reason that the it does not qualify as a
“judiciary or an equivalent authority” and concluded that, given the characteristics of theJapanese prosecution as compared to the US Grand Jury, it is difficult to regard it as fulfilling
this procedural requirement.
I was indeed disappointed, but what struck me was the sincere attitude of the Ministryof Legal Affairs of the Bahamas. From the conversation I had with the Director and from hisvery persuasive explanation, I felt that he, and maybe his staff members, too, had already- 11 -

done thorough, exhaustive legal research before my arrival at Nassau about whether there
was any way they could positively respond to our request under Bahamian law, although theresult was negative. I think that my guess is partly proven by the advice the Director gave meafter telling me about the refusal of our request. Maybe he felt a bit sympathetic about thepoor, inexperienced, young prosecutor from Japan who had come all the way from the otherside of the globe just to be informed about a negative outcome. He told me that, although thethreshold was very high, and the Ministry of Legal Affairs as a part of the Bahamian
government could not in any way assist, there was another possibility for the Japanese
government to obtain the bank records — to file a civil lawsuit against the bank. His
explanation was that, if the government of Japan or the victim of the fraud is willing to be a
civil plaintiff, then it can hire a Bahamian private lawyer and file a motion with a Bahamian
court seeking disclosure of evidence which is to be used in subsequent civil litigation seeking
the recovery of the defrauded money. Of course there was no guarantee that the court would
grant the disclosure, he said, but if the Japanese prosecution was desperate to get the bankrecords, it would be worth trying.
Our investigation team did not take further action as to the bank account in the
Bahamas, because it seemed quite difficult and also costly for the Japanese government, as
well as the victim, to act as a plaintiff in a Bahamian court of law. Besides, judging from theresults of other investigation activities, we came to the conclusion that the money stashed in
the Bahamian bank account seemed to be an insignificant amount, and we could just ignore it.
But the experience in Nassau had a significant meaning to me personally. At that time, I must
confess, I was really ignorant about what we need to do when seeking international assistance.
It should have been done by us, but it was the officers of the Bahamian Ministry of Legal
Affairs that did the research to find the interface needed for international cooperation between
the Bahamas and Japan. And, the possibility of pursuing the civil procedure, I must confess,
had never come to my mind until I had the conversation in Nassau; I simply had lacked theflexibility in my legal mind. As to that, I really felt ashamed as a government lawyer. Keepyour mind flexible, do the research well, and be eager to know your counterpart. That is the
key to success.
III. ASSET RECOVERY
Some 15 years later, when I started working at UNAFEI and the issue of asset recovery
in corruption cases began to pop up as a quite popular topic in our training courses, it mademe recall the advice of the Bahamian Director who suggested that we could initiate a civil
proceeding. The concept of asset recovery, especially the non-conviction-based forfeiture as a
remedy, has very similar aspects to what the Director told me. In fact, in the United States,
non-conviction-based forfeiture seems to have been conceived as a civil remedy.
Although UNCAC recommends its member countries to establish a certain system for
asset recovery, the differences among legal systems are naturally due to the differences intheir respective laws and practices. When asset recovery becomes a cross-border issue, thesedifferences have to be studied very carefully, since they directly affect the ability to recover
the proceeds of crime. A well-established system in one country may not be known to theother. A good investigation strategy developed in one jurisdiction may not always be fit for
use in another. For a quick example, the system of civil litigation against an asset, which
seems to be commonly used in some Anglo-American jurisdictions as a means of asset
recovery, does not exist in Japan. In this seminar, I look forward to hearing precious examples- 12 -

of successful operations and information on good practices that we may share among eachother, about how the investigators and prosecutors have overcome the challenges they have
faced.
Successful international asset recovery requires a thorough study on the systems andpractices of the concerned countries, starting from the basics of international legal assistance,such as reciprocity, dual criminality and so on, and going all the way to the advanced issuesof whether the wanted procedure really exists in your counterpart country or not, or what canbe substituted for a non-existing system or practice. If you resort to civil proceedings, eventhe laws on the conflict of laws may come into question. Viewed the other way around, it is amatter of what measures you can offer or recommend to your counterpart authorities when
they would like to pursue their goals of retrieving money or property, be it stolen assets orproceeds from bribery, from your country. During this seminar, we have an opportunity toshare information about our own systems and practices, think together about what can andwhat cannot be done, and build the necessary interfaces for cross-border assistance. If you arerequested by a foreign authority to assist with asset recovery, or any international
investigation activity, please do not simply say, “Oh, we’re sorry, we don’t have that system”,
but be ready to offer your friend an alternative way to reach the target.
IV. PUBLIC–PRIVATE PARTNERSHIP
I doubt that anyone here will dispute the importance of private-sector involvement inanti-corruption movements and initiatives. Also, there is common understanding that, in theprocess of investigating corruption cases, the importance of cooperation and assistance fromthe private sector and the general public has become more vital than ever. In other words, theinvestigators, the prosecutors and the judiciary cannot do their jobs by themselves. They needhelp from the people. Once they lose public confidence and become isolated, they will beparalyzed.
Indeed, pubic trust is what counts. Just recently, Mr. Sai Chiu Wong, a former Deputy
Commissioner of the Independent Commission Against Corruption (ICAC) of Hong Kong
was kind to come to our training course on anti-corruption issues conducted at UNAFEI andto tell us about the establishment and development of ICAC, which we regard as one of themost successful anti-corruption agencies in the region. I was very much impressed withefforts made by ICAC to gain public trust, which eventually enabled them to mobilize
resources in the community by way of a carefully planned strategy implemented since its
founding. In this seminar, Mr. Tony Kwok, our visiting expert with extensive experience at
ICAC, can tell you about the keys to successful public participation from ICAC’s point ofview. Learning from him will definitely be one of the most important parts of this seminar,and I would like to thank Mr. Kwok in advance.
On the premise of public confidence, investigators become able to utilize various tools
for obtaining crucial information leading to prosecution and punishment of the perpetrators.
Here, I look forward to proactive discussion about, among other things, the proper use ofwhistle-blower and witness protection systems, plea bargaining etc., which directly benefit
investigation and prosecution. Also, I would like to learn how the information acquired fromthe citizens by the investigators is treated and further processed. I would imagine that,
normally, such information is recorded in the form of an interview protocol (or, recently, an
audio-visual recording) or a police officer’s report, and after examining the truthfulness or- 13 -

reliability, it becomes an affidavit or the like, or if that is not admissible in court, the person
who gave the story will be summoned to the court as a witness. If this kind of process is used,
how do you secure the trustworthiness of such information? What do you do when a witness
suddenly changes his/her story or becomes suddenly uncooperative? How is it done in yourjurisdiction? Or, some of the information may be too sensitive to treat it as evidence in court,
or it may be necessary to conceal the source. What measures can be taken in such situations
in your jurisdiction? I suppose that in every country, there must be certain practical measures
to cope with such situations. Please share them with us.
When it comes to prevention in general, there seems to be a wide variation of activities
that can be conducted or promoted. The precious articles that were kindly submitted to
UNAFEI from the participants tell me that we can expect information sharing as to theanti-corruption campaigns and activities conducted in various countries of the Southeast
Asian region. An impressive example for me was what had been done by our co-organizer oflast year’s seminar in Kuala Lumpur, the Malaysian Anti-Corruption Commission, MACC, incollaboration with Petronas, the world famous petroleum company of Malaysia. The alliance
between the Petronas officers and the MACC officers seemed to have gained tremendous
progress under the “Zero-Tolerance Policy” in terms of spreading the notion of integrity,
good corporate governance and compliance with laws and rules. Although the incumbent
officer told me that they are still facing challenges, this effort made by Petronas and the
MACC looked very promising — something you can really call a “good practice”. I would bevery glad if our Malaysian friends here can, even if very briefly, give us an update about
Petronas’ anti-corruption campaign and programme.
V.

CONCLUSION

As you may already be aware, matters pertaining to investigation includinginternational assistance and the issues of public participation are interrelated to each other.
Good investigation needs help from the people, and the people will be more cooperative
when there is good investigation. That also applies to international investigation. If an
investigation or prosecution agency, or the judiciary of one country, engages in effective,
fair and successful investigation and adjudication, then the general public and the private
business sector, especially multi-national businesses, will not only seek to avoid being
investigated or prosecuted, but will also cooperate with anti-corruption investigations,knowing that, after all, good investigation and prosecution ultimately preserves a clean
business environment for international trade and industry. Moreover, some majorinternational corporations have taken significant steps towards integrity and proper corporate
governance, as well as the eradication of corruption. Just as an example, it is now quite
common in international transactions to insert anti-corruption provisions in contracts. Again,
I may be criticized for being too optimistic, but I believe that the big businesses know how
much being free of corruption and wrongdoing contributes to their reputations, and at the endof the day, to their own prosperity. And once a company is truly committed to being
corruption-free, it surely will try to maintain good relationships in a true sense (instead of incorrupt ways) with the authorities by strict compliance with laws and rules and will, in
general and in individual cases, cooperate with law enforcement and the judiciary. Then, law
enforcement and the judiciary become able to engage in efficient and effective investigationand prosecution, which will lead to greater public trust. This favourable, not vicious, cycle iswhat we would like to see, isn’t it?

- 14 -

This seminar may only be one small effort towards such goal. Still, experts from 11
countries being together at one venue sharing insights and valuable information is surely
something. And that something makes a difference, one step again towards the eliminationand eventual eradication of corruption. Let us take firm steps, one by one, but not too slowly.
Praying for the realization of a truly corruption-free Asia, I would like to conclude my
keynote speech and have our distinguished participants proceed to the next stage, the core
part of this seminar.
Thank you for your kind attention.

- 15 -REPORT OF THE SEMINAR- 16 -

CHAIR’S SUMMARY
Ninth Regional Seminar on Good Governancefor Southeast Asian Countries
Jakarta, Indonesia
24 – 26 November 2015

GENERAL
1. The Ninth Regional Seminar on Good Governance for Southeast Asian Countries, co-hosted
by the Attorney General’s Office (AGO) of Indonesia, the Corruption Eradication
Commission (KPK) of Indonesia, and the United Nations Asia and Far East Institute for thePrevention of Crime and the Treatment of Offenders (UNAFEI) was held at the JW Marriott
Hotel in Jakarta from 24 to 26 November 2015.
2. Officials and experts from the following jurisdictions attended the seminar: Brunei
Darussalam, the Kingdom of Cambodia, the Hong Kong Special Administrative Region, theRepublic of Indonesia, Japan, the Lao People’s Democratic Republic, Malaysia, the Union of
Myanmar, the Republic of the Philippines, the Kingdom of Thailand and the Socialist
Republic of Viet Nam. The main theme of the Seminar was Current Challenges and Best
Practices in the Investigation, Prosecution and Prevention of Corruption Cases—Sharing
Experiences and Learning from Actual Cases.
OPENING CEREMONY
3. Mr. Adnan Pandu Praja, Vice Commissioner of the KPK, Mrs. Laksmi Indriyah, Acting Headof the Legal and International Relations Bureau, AGO, and Mr. YAMASHITA Terutoshi,
Director of UNAFEI (by video message) delivered opening addresses, welcoming theparticipants and expressing the importance of informal information sharing and international
cooperation among practitioners in order to eradicate corruption.
4. Mr. HONSEI Kozo, Minister (Deputy Chief of Mission), Embassy of Japan in Indonesia,delivered a special address, welcoming the participants, noting that corruption is an obstacle
to good governance and democracy in all countries and stressing the need to counter
corruption by engaging the support of the public. Furthermore, Mr. HONSEI stressed that the
government of Japan stands ready to provide support to all Southeast Asian countries in theirfight against corruption.
KEYNOTE ADDRESSES
5. Mr. Adnan Pandu Praja, Vice Commissioner of the KPK, delivered his keynote address,
recognizing that although the participants come from different backgrounds, they share thesame desire to exchange information and practices on fighting corruption. Mr. Praja
explained that one of the corruption trends in Indonesia involves the budgeting process;- 17 -

public procurement is subject to corruption at the regional and central levels, and collusion
begins at an early stage. Thus, it is important that regulators are involved in oversight fromthe early stages of the budgeting process. In the field of asset tracing, Mr. Praja
acknowledged that the MLA process takes time, so it is important to improve cooperation
through international fora, such as this seminar and UNCAC’s implementation review
process. Combating corruption requires training and coordination between investigators,
prosecutors and judges. The KPK has played an active role in developing the Jakarta
Principles and working through SEA-PAC, APEC, and so on to further regional cooperationand to improve international cooperation in anti-corruption enforcement. In closing, Mr. Praja
reiterated the importance of effective communication and information sharing to successfully
combat corruption.
6. Mr. Taro Morinaga, Deputy Director of UNAFEI, delivered his keynote address, reminding
the participants that the purpose of this seminar is to share experiences, information andpractices related to anti-corruption enforcement. One of the subtopics of this seminar ismutual legal assistance and asset recovery. Due to the transnational nature of corruption, it isimportant that practitioners feel as comfortable operating on the international level as they dooperating within their respective national jurisdictions. Deputy Director Morinaga, citing an
example of his experience in seeking legal assistance from the legal authorities in the
Bahamas, stated that the key to success in international cooperation is to keep an open mind,
to conduct the necessary research, and to know your counterpart in the cooperating
jurisdiction. The second subtopic of this seminar is public–private partnership, which isimportant not only for the detection, investigation and prosecution of corruption but also forprevention. If the authorities lose the public trust, they will become isolated from the public,
which will defeat their ability to conduct anti-corruption investigation and prosecution.
Deputy Director Morinaga noted the importance of the private sector in the prevention andprosecution of corruption, reminding the participants of an example of such cooperation
between the Malaysian Anti-Corruption Commission and a Malaysian oil and gas company
involving Certified Integrity Officers.
VISITING EXPERT’S LECTURES
7. Mr. Tony Kwok Man-wai, Anti-Corruption Consultant and former Deputy Commissioner of
the Independent Commission Against Corruption, Hong Kong
Anti-Corruption Strategy: When corruption in a society is wide-spread, open and organized(i.e., syndicated), it is the most serious instance of corruption. The first task is to eliminate
syndicated and open-type corruption, which is achievable with a strong team of investigators,
and should be achievable in a relatively short time (3 to 5 years). There is no single approach
to fighting corruption. Simply relying on an anti-corruption unit is insufficient, as isignoring petty corruption. Fighting corruption requires a comprehensive approach coupledwith a zero tolerance policy. The ICAC uses a three-pronged approach—deterrence,
prevention, and education—to fight corruption. In a country where corruption is widespread,enforcement should be the priority because it demonstrates the political will to eradicate
corruption. Prevention is important, but it must be supported by effective enforcement.
Public–Private Partnerships: Public–private partnerships are another important componentof anti-corruption strategy. All countries seek foreign direct investment, and Hong Kong

- 18 -

uses the ICAC to emphasize Hong Kong’s “level playing field” as a selling point for seeking
investment in Hong Kong. Thus, governments should seek to form partnerships with private
sector groups, including the business community, professional bodies, educational institutions
and the media. Mr. Kwok discussed a number of best practices for public–private partnership,such as the establishment of 24-hour public reporting hotlines; National Integrity Councils as
coalition bodies to create national anti-corruption action plans and monitor progress towards
anti-corruption goals; joint task forces, which support integrated approaches toanti-corruption investigation; and ethics development centres that partner with educational
institutions to promote business ethics. Mr. Kwok also proposed the adoption of Institutional
Integrity Action Plans by all sectors of society—government agencies, regulatory bodies andprivate institutions. The four pillars of such plans include ethical leadership, staff integrity,
systems integrity, and monitoring and deterrence. Key points of such plans include internalmonitoring systems, conflicts of interest policies, risk management, internal auditing, and soon.
Mutual Legal Assistance: Corruption is a transnational crime that is committed in secret.
Accordingly, international legal frameworks, such as UNCAC, and international cooperation
are increasingly necessary to facilitate extradition and MLA. Although practitioners arekeenly aware that the process is initiated by sending formal letters of request to thedesignated central authority, complications arise based on the substance, form and legal
posture of such requests. Problems include issues with dual criminality, reciprocity, refusals
to fulfill requests in cases of political offences or where the death penalty may be applied,bank secrecy, inability to compel witnesses, and so on. To overcome these problems,countries enter into mutual legal assistance treaties (MLATs) and should engage in informalinternational cooperation, which is extremely useful for handling routine requests,
identification of suspects or witness, and sharing information and intelligence. Joint seminars
such as this one for anti-corruption practitioners to enhance professionalism and networking
is critical to the success of such institutional cooperation measures.
Recovery of Proceeds of Corruption: Asset recovery requires close cooperation with financial
intelligence units (FIUs) to investigate and freeze assets, often applying a lower standard of
proof than that used in criminal courts. Because corruption typically occurs in secret, it isdifficult for investigators to find direct evidence of the crime. Asset tracing, however, iscomparatively easy because of the challenges facing criminals as they attempt to conceal theproceeds of their crimes. Effective asset tracing requires strong powers of investigation andpublic support. In the 1970s, Hong Kong developed the principle of excessive assets (illicit
enrichment), which criminalizes the possession of unexplained, disproportionate wealth bygovernment officials. Identifying these assets requires a strong legislative framework thatenables investigators to obtain information and freeze, seize, and confiscate illicit proceeds.
Asset tracing requires extensive investigation into family relationships, personal records,
financial records, travel movement, and so on to identify the relevant parties and transactions
that show how illicit proceeds have been concealed or spent. Next, overt action, i.e., searchand seizure, is necessary to obtain proof. Mr. Kwok used a case study to explain how
investigators in Hong Kong were able to trace the illicit assets of a corrupt police officer
based on the seizure of the officer’s tennis club membership card. Thus, any clue, no matter
how small, may be the key to asset tracing.

- 19 -DISCUSSION SUMMARY
8. ANTI-CORRUPTION PRACTICES: ASSET RECOVERY AND INTERNATIONAL COOPERATION
A. BRUNEI DARUSSALAM: The participants from Brunei introduced the case of Public
Prosecutor v. David Chong, in which Chong, as manager of Musfada Enterprises,
defrauded Brunei Shell Petroleum of over US$5 million, attempted to hide illicit proceeds
overseas and absconded to another jurisdiction. Chong was the first case in which
non-conviction based (NCB) confiscation was used pursuant to Section 83 of Brunei’s
Criminal Asset Recovery Order (CARO). The case is a successful example of mutual
legal assistance through both formal and informal channels. The broad scope ofinternational cooperation involved the granting and execution of a warrant of arrest byauthorities in Malaysia and the freezing of bank accounts, the execution of a confiscation
order and the repatriation of funds from Singapore to Brunei.
B. CAMBODIA: The participants stressed the importance of mutual legal assistance to combat
corruption and emphasized that informal cooperation between law enforcement should be
utilized to strengthen ties among ASEAN countries, which have already concluded amultilateral treaty on mutual assistance (ASEAN Treaty on Mutual Legal Assistance in
Criminal Matters (2004) (the “ASEAN Treaty”). In addition, it was noted that for prompt
recovery of proceeds of corruption it is essential to expand the use of bilateral andmultilateral agreements. When a person is found guilty of corruption, the court orders theconfiscation of all proceeds of corruption—whether or not the property has beentransmitted into another form—as well as any benefits or other advantages related to theproperty.
C. INDONESIA: The participant from the KPK reported that the KPK has been involved witha number of successful cases of international cooperation. The KPK stressed theimportance of communication in the MLA process, particularly making use of bothinformal and formal MLA requests. At an early stage and throughout the process, the
KPK establishes contact with the legal attaché at the requested country’s embassy inJakarta, the foreign investigator, and Indonesia’s FIU, and so on. The participant from the
AGO reported that corruption is still a significant barrier to social and economic
development in Indonesia. It was reported that Indonesia still takes a criminal punishment
approach to corruption cases, which does not sufficiently focus on asset tracing andrecovery. The AGO’s Asset Recovery Center is designed as a special unit to handle asset
recovery throughout all stages of the investigation from the beginning of the investigation
through execution. The AGO is well positioned to manage asset recovery because of its
extensive network of provincial, district and sub-district offices throughout Indonesia andits role as the nation’s primary justice agency.
D. LAOS: Corruption remains pervasive throughout society, ranging from high-ranking
officials to private enterprises, traffic police, and even the field of education. The
Huaphan Province case, involving the embezzlement of $1.25 million by nine
government officials over the course of at least five years, demonstrates the extensive andsystematic scope of corruption. Although anti-corruption legislation exists,
implementation is not effective. Coordination between the State Inspection Authorities at- 20 -

the central and provincial levels is weak; few corruption cases reach court, and manycases are resolved through disciplinary measures. To root out corruption in the central
government, the Prime Minister established the Anti-Corruption Investigation Department
in July 2015. Laos engages in mutual legal assistance and other forms of international
cooperation, including asset recovery, primarily on the basis of international law andbilateral agreements, to the extent that doing so comports with Lao law.
E. MALAYSIA: The participants from Malaysia presented a case study of the Perwaja case,which raised the practical issue of the admissibility of evidence obtained through mutual
legal assistance. The depositions of six key witnesses were obtained from Hong Kong;
however, the witnesses refused to testify in Malaysia. Therefore, the prosecution wasforced to rely on the deposition transcripts, which were objected to by the defence
counsel. The legal dispute, involving a conflict of legal interpretation of the Evidence Act
and the Mutual Assistance in Criminal Matters Act of 2002, was ultimately resolved infavour of the defendant by Malaysia’s highest court. However, the Evidence Act has beensubsequently amended. Now, pursuant to section 90D of the amended Evidence Act,MACMA and the Evidence Act can be read harmoniously. However, the new provisions
have not yet been tested. The MLA process takes too long, usually three to six months
just to draft a request. It may take about a year to obtain responses to MLA requests.
Under Malaysian law, the criminal case must proceed within three months, meaning thatthe delays in the execution of requests are the greatest obstacles to successfulprosecutions in Malaysia.
F. MYANMAR: The participants from Myanmar explained the country’s anti-corruption
enforcement mechanisms and MLA procedures, noting that Myanmar is a party to the
ASEAN Treaty and UNCAC. With the assistance of the UNODC, Myanmar promulgatedthe Mutual Legal Assistance in Criminal Matters Law 2004, and the law has been
approved by the Financial Action Task Force (FATF). The Anti-Corruption Commission is
responsible for enquiries into bribery and illicit enrichment cases, and it is also
responsible for the prosecution of corruption cases. The Commission establishes
Investigation Boards led by a commissioner of the Anti-Corruption Commission andother appropriate persons, and Preliminary Scrutiny Boards composed of appropriate
citizens, to conduct the investigations. Myanmar faces the challenge of suspects
absconding during investigations, so the laws and rules that address this challenge need tobe amended. When corruption cases are filed with the court, the burden of proof lies withthe prosecution, following the principles of the English common law and according to the
Evidence Act.
G. PHILIPPINES: In the Philippines, the Office of the Chief State Counsel is responsible for
accepting treaty-based MLA requests. An example of a treaty to which the Philippines is aparty is the ASEAN Treaty signed on the 29th day of November 2004. In the absence of atreaty, the Anti-Money Laundering Council (the “Council”), which is the FIU of thePhilippines, may execute requests for assistance from foreign jurisdictions. To detect
illicit assets, Sworn Statements of Assets, Liabilities and Net Worth (SALNs) must be
submitted by public officers or employees on an annual basis. SALNs provide
investigators with simple and practical tools to analyse increases in assets and detect
unexplained wealth. Once discovered, the government may freeze, seize and confiscateproceeds of corruption.
H. THAILAND: Thailand explained its formal and informal procedures for mutual legal- 21 -

assistance. Informal requests are primarily for the purpose of obtaining information andare responded to by the NACC. Formal requests can be treaty based or non-treaty based,
and the requirements for such requests are regulated by the Act on Mutual Legal
Assistance in Criminal Matters, B.E. 2535 (1992) (the “MLA Act”). Thailand also
provides assistance based on 14 bilateral MLATS and the ASEAN Treaty. The MLA Act
permits freezing, seizing and confiscation of assets. An embezzlement case wasintroduced, in which the laundered money was returned from Switzerland, the United
Kingdom and Guernsey Island to Thailand through the execution of a civil judgement. It
was also reported that Thailand is trying to amend the MLA Act to introduce
non-conviction-based confiscation, and to provide for the return of confiscated assets tovictims or the requesting state; the draft law is being considered by the parliament.
I. VIET NAM: The participants from Viet Nam reviewed the corruption offences stipulated in
the Penal Code, such as bribery, embezzlement, abuse of power and so on, and stated thatpunishment for such offences ranges from definite terms of imprisonment to life
imprisonment and the death penalty. Emphasizing the importance of asset recovery, it wasreported that the total estimated damages caused to Vietnamese society from 2010 to 2013
amounted to US$795 million, of which 29.4% thereof was recovered. Some of thechallenges facing enforcement in Viet Nam were highlighted by the Duong Chi Dungcase, in which the US$5 million criminal judgement against him has not yet been
executed. To overcome the numerous challenges, Viet Nam might consider: (1) improving
the legislative framework for asset recovery and expanding the role of the prosecution in
financial investigation and freezing procedures, (2) using financial experts to evaluate theactual values of proceeds of crime; (3) improving the financial knowledge of law
enforcement officers; and (4) enhancing international judicial cooperation. Viet Nam also
explained the procedure of mutual legal assistance, including the contents of letters ofrequest. Because Viet Nam cannot directly execute a foreign order to freeze, seize or
confiscate proceeds of crime, letters of request should request that the Vietnamese
authorities either execute the foreign order or that they freeze, seize or confiscate theproceeds under Vietnamese law.
9. ANTI-CORRUPTION PRACTICES: PUBLIC–PRIVATE PARTNERSHIPS
A. CAMBODIA: Cambodia provided good examples of a framework for public–private
partnership to prevent and detect corruption cases, including the establishment of theGovernment–Private Sector Forum, concluding MOUs with the private sector, providing
public reporting mechanisms and whistle-blower protection, and other accomplishments,
which have brought Cambodia significant progress in combating corruption.
B. LAOS: Investigators rely on the support of the public to identify corruption.
Anti-corruption investigators conduct regular monitoring of and request recommendations
from citizens about the performance of government officials and civil servants.
Furthermore, all citizens, institutions and organizations are required to participate in theprevention and countering of corruption by providing timely cooperation to authorities.
C. MALAYSIA: “Corporate Integrity Pledges”, entered into between the Malaysia
Anti-Corruption Commission (MACC) and businesses, establish a framework forcooperative anti-corruption efforts. The programme encourages the private sector topromote good governance and transparency, to strengthen compliance and internalmonitoring systems, and so on. Companies agree to create anti-corruption action plans,- 22 -

establish committees for corporate governance and training, and audit and report
performance. Also, the MACC’s Certified Integrity Officer (CeIO) programme provides
training to senior officers in government and the private sector to create an integrity-based
work culture throughout Malaysia.
D. MYANMAR: Corruption cannot be eradicated by the government alone, and Myanmar
recognizes that the active participation and support of the public is necessary to combat
corruption. Accordingly, public reporting mechanisms, public awareness campaigns, andwhistle-blower protections and rewards (Anti-Corruption Law, Sec. 17(i)) have been
established. Prevention is a key component of Myanmar’s anti-corruption strategy, andseminars conducted with the support of international organizations are key measures forraising and disseminating awareness.
E. PHILIPPINES: The Philippines presented its robust use of multi-sector partnerships tocombat corruption. For example, the SHINE Project is an integrity initiative thatencourages all business executives to sign integrity pledges and encourages employees toengage in proper business practices. The SHINE Project has among others, establishedthe “Proactive Hotline” service to encourage reporting of conflicts of interest and otherinstances of corruption involving the private sector. The Office of the Ombudsman as thecentral anti-corruption agency of the Philippine Government also engages the private
sector, for example, by reaching out to schools through the Campus Integrity Crusadersforum and the Integrity Caravan. The Philippines also has established whistle-blower
protections to obtain the support of the public in the fight against corruption. The Estrada
Plunder and Pork Barrel Scam cases demonstrate the importance of public participation inanti-corruption enforcement. In the Estrada case, 76 witnesses testified for theprosecution after being granted whistle-blower protection and immunity in exchange for
their testimony. Whistle-blower protection and immunity are necessary tools to secure
the support of the public through their testimony and provision of other evidence
necessary for conviction. Similarly, the Pork Barrel Scam case, which involves theembezzlement of public funds by Filipino senators, is particularly notable in that the scam
was initially exposed by the investigative reporting of the media—an important institutionthat serves, and forms a part of, the public.
F. THAILAND: Thailand engages in public–private partnerships through programmes
established by the NACC. For example, Thailand introduced the “True Friend Project”,
under which the NACC has appointed 760 participants from Thai provinces, encouraging
them to promote activities to raise public awareness. Also, the NACC has partnered with
the Thai Bank Association to educate high school and university students on good
governance. The NACC issues “Corporate Governance Awards”, through which the
NACC recognizes outstanding private-sector organizations for their transparency andaccountability.
G. VIET NAM: Although the traditional Vietnamese conception of corruption focuses on the
public sector—as does Viet Nam’s legislation—the importance of the partnershipapproach is increasingly recognized in Viet Nam, as evidenced by the fact that the
National Assembly is now considering to amend the Penal Code so that private sector
corruption would be officially recognized.

- 23 -

CONCLUSIONS AND RECOMMENDATIONS
10. LESSONS LEARNED AND RECOMMENDATIONS
A. International Cooperation
To successfully investigate and prosecute of corruption cases, it is essential to have close
relationships among related international agencies. All countries have frameworks forinternational assistance, but in order to utilize these frameworks, informal informationexchanges among related agencies are crucial.
B. Asset Recovery
Asset recovery is extremely important so that illicit proceeds do not remain in the handsof criminals. During this seminar, it was reported that few cases of international asset
recovery have been successfully resolved, but a successful case was reported by Brunei.
In order to improve the effectiveness of asset recovery, anti-corruption practitioners
should: (1) improve domestic legislation, (2) establish closer relationships withcounterparts in other jurisdictions, and (3) improve specialized knowledge in the field offinance among investigators and prosecutors.
C. Public–Private PartnershipTo effectively detect and prevent corruption, the relationship with the private sector,
including corporations and the general public, is very important. In this seminar,
Corporate Integrity Pledges and Certified Integrity Officers were discussed as bestpractices in Malaysia. In many countries, effective and innovative efforts have been madein the field of public–private partnership, for example, integrity initiatives in thePhilippines, the “True Friends Project” in Thailand and legislative measures and reform in
Cambodia, Laos, Myanmar and Viet Nam. It was also suggested that anti-corruption
agencies should take the legitimate interests of the private sector into account, particularly
with respect to the confiscation of the proceeds of corruption. Failure to do so is likely toalienate the private sector and create obstacles to public–private partnership.

26 NOVEMBER 2015
JAKARTA, INDONESIA- 24 -VISITING EXPERT’S CONTRIBUTIONS

Mr. Tony Kwok Man-wai
Anti-Corruption Consultant andFormer Vice Commissioner,
Independent Commission Against Corruption,
Hong Kong- 25 -

Mutual Legal Assistance
Recovery of Proceeds ofCorruption
Tony Kwok, SBS, IDS
Hon Fellow, Adjunct Professor & Course Director, HKU
Visiting Professor, PRC National Prosecutors College
UN Anti-corruption Expert Group
Visiting Lecturer, IACA
Visiting Expert UNAFEI
Regional Coordinator, IAACA
Anti-corruption Advisor to Philippines & Mongolia
Honorary Fellow, Open University of HK
Former Deputy Commissioner, ICAC HK

Formal Mutual Legal Assistance Obtain documents, eg. bank
 Evidence taking
 Arrest & extradition Search Restrain properties
 Confiscation of properties
 Return confiscated properties & proceeds ofcrime Sharing of confiscated properties- 26 -

Informal Mutual Assistance Routine enquiries
 Public records, eg. land, companies
 Internet records
 Locating witnesses/suspects
 Interview with voluntary witnesses
 Sharing of intelligence, conviction records
 Training

Letter of Request Procedure(Commission Rogatoire)
From designated authority (Secretary of Justice) to
Secretary of Justice/magistrate/ of the requested country
 State the summary of the investigation and describe theoffences committed
 Full particulars of persons involved
 Description of the assistance requested
 Letter translated and transmitted (sometimes throughdiplomatic channel)
 If urgent, can use Interpol channel- 27 -

Mutual Legal AssistanceComplications

Competing jurisdiction on offences – double criminality
 Reciprocity - Offence must be corresponding Not of political nature Death penalty
 Different legal /judicial system
 Over protection of own citizens
 Witnesses cannot be compelled to testify
 Bank secrecy law
 LEA cannot be allowed to operate cross border Risk of leakage of information
 Resource constraint
 Time delayed is success denied

Solutions• Bilateral & Multilateral Treaties
and Convention– Extradition– Mutual Legal Assistance– Letter of Request– Exchange of prisoners– Asset sharing• Informal mutual assistance- 28 -

Hong Kong Legislation
on Mutual Legal
Assistance

Mutual Legal Assistance in Criminal Matters
Ordinance, Cap. 525 (1997)
 Collection of evidence, search, seizure &confiscation
 Through Secretary for Justice Authorized Officers – police, customs, ICAC
Fugitive Offenders Ordinance, Cap. 503 (1997)
 Extradition Treaty
 Test of sufficient evidence

Conventions on
Crime
1988 UN Convention Against Illicit
Traffic in Narcotic Drugs & Money
Laundering
1990 Council of Europe Convention
on Laundering, seizures andconfiscations on proceeds of crime- 29 -

Conventions on
Crime
1993 European Convention on
Extradition
2000 UN Convention Against
Transnational Organized Crime

Conventions on
Corruption

1996 Inter-American Convention
Against Corruption
1997 OECD Convention on
Combating Bribery of Foreign
Public Officials in International
Business Transaction
2003 UN Convention Against
Corruption- 30 -

UNCAC
INTERNATIONAL
CO-OPERATIONUNCAC can be applied as legal basis for
extradition & mutual legal assistance Mutual legal assistance –A46
 Gathering and transferring evidence
for use in court Tracing, search, freezing, seizure,confiscation & return of corrupt
proceeds
 Technical assistance & training-A60


UNCAC
INTERNATIONAL
CO-OPERATION
 Anti-corruption agencies co-operation-A48:
 Liaison officer Rapid exchange of information
 Exchange of personnel & experts
 Joint investigation-A49-50

 Extradition of offenders-A44- 31 -

UNCAC
Asset Recovery
Article 52 – should regulate the financial
institution on integrity of accounts
 Article 53 – should assist in civil proceedings byforeign countries
 Article 54 – should recognize the court order ofanother member state for freezing, seizing andconfiscation of corrupt assets
 Article 55 – setting the procedure forinternational cooperation
 Article 57 – Return and sharing of assets


Why Asset Forfeiture isimportant?
 Greater deterrent effect High risk, low return crime Enhance income for government/ACA
 Enhance professional image of ACA
 Encourage public partnership Enhance international cooperation
 Provide basis for public education- 32 -

Difficulties of Asset
Tracing and Forfeiture Secret nature
 Involving third parties
 Professional offenders Cross jurisdiction
 Use of high tech & professionals
 Inadequate legal support

Prerequisite for Effective
Asset Tracing/Forfeiture Adequate law Investigation power Forfeiture Effective public report system Adequate resources Confidentiality of investigation
 International assistance Professionalism- 33 -

Legislation Support
Liable to Forfeiture Any bribe payments
 Corrupt assets

Legislation
Forfeiture – bribe payments
 Upon conviction
 Court must issue “Restitution Order”
 Order the convicted person to pay to such

person or public body Normally the full amount of the bribe, but
liable to pay full interest on the sum However, no sanction for enforcement
 Only through civil proceeding- 34 -

Legislative Support
Excessive Asset (Illicit Enrichment)
Criminal Offence
Any Government Officer
 In control of asset
 Disproportionate to his official emoluments
 Without satisfactory explanation
 Presumption on close relationship Max fine HK$1M (US$128,000) & 10 yrs
imprisonment
 Court order for forfeiture of unexplained asset
Legislation
Forfeiture of Corrupt Asset Court Order upon conviction
 For asset held by third parties, Secretaryof Justice to apply for court order Third parties allowed to show cause Third parties can appeal to Court ofAppeal- 35 -

Legislation
Restraining Order
To freeze property during the course ofinvestigation
 Ex parte application to High Court
 Including assets held by third parties
 6/12 months renewable by court, 3 months at atime, but continue in force upon prosecution
 Criminal offence for breach of order Can apply for revocation/variation of order Basis for civil proceedings & settlement
Legislation
Investigative Power Bank Check Surveillance Intercept
 Search & seize
 Demand for Information Order- 36 -

Legislation
Demand for Information Order Court Order to direct suspect to provide

statutory declaration on his income, assets (including gift, luxury

items) & liabilities, past & present Overseas remittances May be used in court proceeding for crossexamination only

Legislation
Demand for Information Order Court Order to direct any other person toprovide statutory declaration on Properties suspected to be held on behalf ofsuspect

 Court Order to require any government &public bodies to produce documents
 Court order to require any other person toattend ICAC Office & answer questions onoath- 37 -

Asset Tracing
Preliminary Stage
Effecting reporting system – Life Style
Hotline Check Asset Declaration, if any
 Complainant/Informant
 Witnesses Background check : Registration of Persons
Office, Birth, Marriage Registry
 Civil Service Registry/Treasury
 Immigration Department – passport, travel
movement

Asset Tracing
Preliminary Stage
Transport Department – car/driver
registration
 Land/Property Registry Company Registry Source of expenses - Credit cardcompanies
 Police, FIU
 Public Utility companies – electric, gas etc
 Mobile phone/Internet service provider
 Social media- 38 -

Source of Information
Protracted Stage Surveillance & Observation – close

relatives/mistresses Intercept
 Overseas enquiries

Source of Information
Protracted Stage
 List of related persons
 Bank accounts
 Remittance Stocks, shares & funds
 Shell companies
 Properties- 39 -

Source of Information
Overt Stage
Search Confession
 Interview close associates
 Demand Order for information
 Immunity Witnesses
 Forensic evidence – computer Corrupt sources?
 Mutual legal assistanceFinancial Investigation Unit
 Cooperation FIU/ACA Access to Suspicious Transaction

Reporting (STR) record
 Liaison with Foreign FIU
 Use of FIU power to investigate and freeze
assets Criminal or civil proceeding to forfeit
corrupt assets- 40 -

Mathematical Exercise
 Current Assets
 - Current Liabilities = Net worth - Previous net worth
 + total expenditure - total official income
 - explainable income
 = excessive asset

Thank You
Welcome to my homepage
http://www.kwok-manwai.com- 41 -

Public – Private Partnershipin Combating Corruption

Tony Kwok, SBS, IDS
Hon Fellow, Adjunct Professor & Course Director, HKU
UN Anti-corruption Expert Group (2006)
Visiting Lecturer, IACA
Visiting Expert UNAFEI
Regional Coordinator, IAACA
Visiting Professor, PRC National Prosecutors College
Honorary Fellow, Hong Kong Open University
Anti-corruption Advisor to Philippines & Mongolia
Former Deputy Commissioner, ICAC HK

True or False• Corruption is so serious in this country that it
will take a decade to eradicate it?
• If we can identify all the opportunities forcorruption, and plug them all, corruption will
be eradicated?
• We can rely on the dedicated ACA toeradicate corruption?
• Government should focus on public sector
corruption, and leave business sector alone• ACA should focus on “Big Fishes” & tolerate
petty corruption- 42 -

Two Important
Understandings
1. There is no single solution infighting corruption
2. You can’t rely on a single agency
to fight corruption

3-Pronged Approach

Deterrence
Prevention
Education- 43 -

Three-pronged approach• Don’t want to corrupt• Can’t corrupt• Dare not corrupt

Why Enforcement is important?
• Demonstrate political will
• Encourage public support• Driving force for system review• Provide basis for public education• Recovery of corrupt proceeds• Deter the most corrupt!

- 44 -

Equal Emphasis on public &private sector corruption• Double standard• Identical to deception and theft• Protect investment• Level Playing field• Consumer interest• Financial Market stability• Public safety• Catalyst to organized crime & crime

Partnership
•

•

•
•

Public organizations• Anti corruption commission• Police, FIU• Public Prosecutors• Judiciary• Ombudsman• Audit Commission• Civil Service Commission• Government departments• Parliament• Political parties
Private• Business communities• Professional bodies• Civil society organizations• Educational institutions• Mass media, social media
PublicInternational networking- 45 -

UNCAC• For the PRIVATE SECTOR –A12
Promote co-operation between anticorruption agency and private sector
in preventing corruption
Enhance accounting and auditing
standards with penal sanctions
Promote private sector codes ofconduct

PREVENTIVE (Continued)• For the PRIVATE SECTOR –A12
Prevent conflict of interest, eg.
Employ former public officials
Promote internal control and internalaudit
Disallow tax deductibility of bribe
payment- 46 -

PREVENTIVE (Continued)• For the PRIVATE SECTOR
Promote partnership with CSOs & NGOs –A13
Access to information – A13
Public education program- A13
Promote public reports of corruption,
including anonymous reports-A13
Regulatory framework to detect/preventmoney laundering-A14

Some Best Practices• National Integrity Council – strategy,
action plan
• Advisory/monitoring committees• Joint task forces• Public reporting hotline/referral• Ethics Development Centre• Integrity Education Network• Corruption Watch• Multi parte code of ethics• Institutional Integrity Management- 47 -

Code of Ethic• Explain the relevant law• Acceptance of entertainment, gifts, loans &discounts• Conflict of interest• Abuse of authority• Leakage of confidential/sensitive
information• Outside work
• Declaration of investment?
• General conduct and behaviour-excessive
gambling, indebtedness etc• Confidential complaint channel• Sunshine Test

Every Institution,
Government or Private,should take up Responsibility of
Cleaning their Own Houses- 48 -

Ministries Anti Corruption
Action Plan
• Philippines, Mongolia, Serbia• Prime Minister’s Workshop – agreed
common action based on 4 pillars• Tailor made ministries action plan
• ACA to coordinate training needs• Quarterly progress report to ACA, thento the Cabinet• Review annually

Institutional Integrity
Plan• Institutional Integrity Steering
Committee• Institutional Integrity Annual Action
Plan• Certified Institutional Integrity Officer(CIIO)- 49 -

Role of CIIO
• Provide professional advice to the Steering
Committee• As facilitator in the strategic planningworkshop to formulate annual action plan
• Coordinate & monitor the implementation of
the Action Plan
• Progress report to Steering Committee• Provide in house training• Review annually• Partnership with anti corruption agency &othersInstitutional Integrity Action PlanPILLAR IPILLAR IIPILLAR III

EthicalLeadership

Staff
Integrity

Systems
Integrity- 50 -PILLAR
IV
Monitoring&
DeterrenceEthics Leadership• Integrity• Human rights• Equality• Rule of law

Integrity• Honesty• Selflessness – decision based on
public/institution interest, not privateinterest• Objectivity – decision based on merit• Transparency• Accountability- 51 -

Pillar 1: Ethical Leadership
1.

The Chief Executive should publicly pledge their commitment toadopt institutional integrity by issuing a public statement on
business ethics, value and zero tolerance.

2.

The Chief Executive should allocate a fixed % of budget for
institutional integrity activities

3.

Set up a declaration system for conflict of interest, including
relatives involved in business in the same sector

4.

Set up a high level Integrity Steering Committee to formulate
ethics policy, integrity strategy and action plan5.

Establish a post of Integrity Manager (CIIO) to coordinate
implementation

Pillar 2: Individual Integrity
1. Formulate & promulgate a specific Staff Code of Ethics
including clear guidelines for gifts, loans andentertainment, and conflicts of interest
2. Open & fair staff recruitment, including integrity
vetting
3. Organize staff ethics training and development
activities, such as seminars, workshops, slogan
competitions and promoting healthy life styles
4. Integrity management will be included in the job
description, and in staff appraisal- 52 -

Pillar 3: Systems Integrity1.

Set up a risk management unit to assess corruption/fraud
vulnerability in the organization, to review systems & procedures,making them more efficient, transparent & accountable2.

Set service guarantees to enhance public services delivery

3.

An anti-corruption clause will be included in all contracts

4.

Unethical Contractors will be blacklisted and published in a central
system5.

Job rotation systems to be implemented

Pillar 4: Monitoring andDeterrence
1. Mandate that employees report corruption, suspected corruption, &attempted corruption
2. Set up a hotline for receiving complaints
3. Formulate policies and procedures to protect the confidentiality ofwhistleblowers
4. Enhance internal audit & surprise check system
5. Set up an internal monitoring section to investigate complaints and tomonitor suspected staff unethical conduct
6. Consider Integrity Testing programme- 53 -

Best Practices - Law• Conflict of interest law (Canada)• Corporate liability (US)• ACA budget cannot be reduced (Mongolia)• ACA budget pegged with national budget (Malawi)• Legal obligation to report corruption：Canada,
Malaysia• Reward for election bribery – South Korea• Civil servant’s unsecured loan not more than 3months pay – Singapore• Senior politician/public officials not allowed to haveoverseas bank accounts (Nigeria)• Public Hearing System – Australia NSWBest Practices - Prevention• Presidential/Prime Minister Workshop – ministries,
govt agencies, provinces, SOE, business• Public service delivery - Performance pledge – Hong
Kong, Singapore• Government department to submit annual anticorruption action plan：New Zealand, Philippines• Integrity committee/Integrity Officer in all govt
agencies – Tanzania• Integrity Audit Review ：Australia, Philippines• Due Process Office of the President – Nigeria• Procurement Observers/Monitors – Philippines- 54 -

Best Practices - Education• Publication of national anti-corruption plan - Pakistan• China Public Integrity Education Network• Tripartite code of conduct : Philippines• Anti-corruption guideline on web：Hong Kong,
Australia• Anti-corruption month：Philippines• Active partnership with Civil societies & churches –Philippines, Kenya

Best Practices - Enforcement• Special Court：Pakistan, Philippines,
Indonesia• Life style check campaign - Philippines• Australian Corruption & Fraud Centre• Blacklisting of corrupt contractors• “I paid a bribe” Website - India• Integrity Testing- 55 -

Thank You
Welcome to my homepage
http://www.kwok-manwai.com- 56 -

COUNTRY PRESENTATION PAPERS

Ms. Dk Norfaziah Pg Haji Abas & Ms. Zailinawati Hassan, Brunei Darussalam***
Mr. Ku Khemlin & Ms. Seng Lina, Cambodia***
Mr. Afief Yulian Miftach & Mr. Banu Laksmana, Indonesia***
Mr. Sibounzom Bounlom & Mr. Phongsavanh Phommahaxay, Lao PDR***
Dato’ Abdul Razak Bin Musa & Dato’ Umar Saifuddin Bin Jaafar, Malaysia***
Ms. Khin Cho Ohn, Myanmar***
Ms. Rowena Alvarez Del Rosario & Mr. Tomas Ken D. Romaquin, Jr., Philippines***
Mr. Phoosit Tiravanichpong & Mr. Worachai Phatcharawalai, Thailand***
Mr. Nguyen Hoanh Dat & Mr. Vu Van Giang, Viet Nam- 57 -

MUTUAL LEGAL ASSISTANCE AND RECOVERY OF PROCEEDS OF
CORRUPTION – A CASE STUDY FROM BRUNEI DARUSSALAM
Dk. Norfaziah Pg Haji Abas *Zailinawati binti Hassan†I.

INTRODUCTION

Investigation of corruption is becoming more complex as perpetrators are becoming moresophisticated in making use of foreign jurisdictions to launder the proceeds of corruption. The
Anti-Corruption Bureau in Brunei Darussalam recognizes this problem and the need to facilitate
the recovery of proceeds of corruption and continues to improve investigative measures as wellas mutual cooperation with enforcement agencies from neighbouring countries.
International cooperation, which includes mutual legal assistance (MLA), be it formal orinformal, is crucial in the successful recovery of assets or proceeds of corruption that have beentransferred to or hidden in foreign jurisdictions.
This paper aims to illustrate the success of MLA in the recovery of proceeds of corruption
using the case of Public Prosecutor v. David Chong 1. With the passing of the Criminal Asset
Recovery Order 2012 (CARO) in Brunei Darussalam in June 2012, this case is also the first
Non-Conviction Based 2 (NCB) confiscation case, under Section 83 of the CARO 2012.
II.

CASE STUDY

A.

Case Overview
In 2009, Musfada Enterprise — a registered vendor of Brunei Shell Petroleum Company
Sdn Bhd (BSP), whose principal business was the supply of materials such as chemical
degreasers, oil spill kits, wooden pallets and fire safety equipment — was discovered to be
involved in corrupt practices with employees of BSP. Musfada Enterprise was the sole supplierfor “Vitrone Degreaser,” a detergent for cleaning oil spills and dirt from the various oil tanks in
BSP. The supplies were based on quotation or ad hoc basis with no long-term contract.
Below is an excerpt of a newspaper article about the case.
2013 has been a landmark year in the fight against corruption in Brunei
Darussalam. With a conviction in one of the biggest corruption cases in*

Assistant Special Investigator, Anti-Corruption Bureau, Brunei Darussalam.
Assistant Special Investigator, Anti-Corruption Bureau, Brunei Darussalam.
1
Public Prosecutor v David Chong (Criminal Trial No. 25 of 2012).
2“Best Practices: Confiscation (Recommendations 3 and 38),” adopted by the Plenary of the FATF, February 19,2010.
†- 58 -

Brunei’s history — involving Brunei Shell Petroleum, one the largest publicbodies in the country — the government intended to make a statement — thateven those who occupy the loftiest positions are not exempt from the rule oflaw. More investigation and prosecution of corrupt practices have advanced
Brunei’s standing in Transparency International’s ‘Corruption Perceptions
Index’, improving its ranking from 44 to 38.
With a score of 60 points, Brunei ranked 38 out of 177 countries, the second‘cleanest’ country in ASEAN. Only Singapore bettered Brunei in corruption
rankings among ASEAN nations, ranking fifth overall. In the 31 years since its
establishment in 1982, Brunei's Anti-Corruption Bureau (ACB) has
investigated 2,469 cases of alleged corruption.
From those investigations, 284 people were brought to court to face criminal
charges, with 231 of them convicted for offences ranging from bribery,
criminal breach of trust, submitting false financial claims, cheating, andreceiving sexual gratification in exchange for favours. 3
B.

Investigation Findings
Investigation by the ACB revealed that “Vitrone Degreaser” was a fictitious brand createdby Musfada Enterprise. Investigation revealed that Musfada Enterprise bought Falchem
Degreaser, which was produced in Singapore through a “kitchenware supplier” company inSingapore. Once the Falchem Degreaser arrived in Brunei, Musfada Enterprise physically altered
the name of Falchem Degreaser to Vitrone Degreaser, and supplied it to BSP as an exclusive
brand from 2007 to 2009.

Investigation revealed that the cost of one drum of Vitrone Degreaser is BND$1,400.00
equivalent to US$1,015.54. Over the six (6) year period, BSP had paid a total value of
BND$8,167.875.00 to Musfada Enterprise for the supply of ”Vitrone cleaning Degreaser
200Liter”, which breaks down to a total of 5,835 drums.
However, investigation also revealed that Musfada Enterprise only ordered 383 drums
from the supplier in Singapore from the years 2007-2009. Investigation was able to establish that,during that period, Musfada Enterprise had claimed a total of 5,835 drums of Vitrone Degreaser
with a total value of BND$7,354,200.00, equivalent to US$5,332,352.01.
Investigation established that out of the total 5,835 drums of Vitrone Degreaser claimed tobe supplied and paid by BSP, 5,452 drums were not delivered to BSP. However, invoices werestill raised to BSP causing BSP to make a loss of BND$7,354,200.00, equivalent to
US$5,332,352.00, for the materials not received by BSP.
C.

Musfada Enterprise Key Personnel
The key personnel of this case are identified in the diagram below:

3

The Brunei Times, Quratul-Ain Bandial, Bandar Seri Begawan, Monday, December 9 2013.

- 59 -DAVID CHONG
MANAGER
Signs cheques and payment vouchers, handles event management
and pays bribes to Supply Chain Management (SCM) BSP

THOMAS LING
SALESMANSTEVE LIEWSALESMAN

Promotes products and pays bribes topersonnel from East Operation (EOP),
Service Transport & Logistics (STL) &Service Campaign Offshore (SCO)

Promotes products and pays bribes topersonnel to Operation (POP), West
Operation (WOP) & BLNGD.

BSP Department Allegedly Involved in Corrupt Activities
There are six (6) departments from BSP that were involved in this case:i. Production Operation (POP)ii. West Operation (WOP)iii. East Operation (EOP)iv. Service, Transport & Logistic (STL)v. Supply Chain Management (SCM)
vi. Service Campaign Offshore (SCO)

E.

Modus Operandi
Work orders and purchase requisitions were created and approved by BSP personnel inorder to release purchase orders of the degreasers and other items in the BSP’s SAP system.
David Chong approved the withdrawal of money from the company bank account, of which he
was the sole signatory. He then instructed either Steve Liew or Thomas Ling to pay commissions(bribe money) to the BSP employees who created or expedited the approval of these orders via
the creation and approval of these work orders, purchase requisitions and purchase orders in
BSP’s procurement system. Once purchase orders were approved, Musfada would deliver to the
BSP departments and the relevant BSP employee would sign the delivery order to acknowledge
receipt of full delivery of goods when there was in fact no delivery or only partial delivery.
The diagram below is an overview to understand the flow of work processes in order tocomprehend the extent of the corrupt activities of Musfada Enterprise and BSP employees.

- 60 -

BSP personnel
creates Work
Order to request
items

Work Orderconverted toPurchase
Requisition

BSP personnel
releases Purchase
Requisition

BSP personnel
creates Purchase
Order in SCM
Department

Musfada Invoice &Signed Delivery
Order is given to
BSP Financedepartment

BSP STL
personnel signs
Delivery Order &goods received
process

Musfada delivers
Materials to STL
department

BSP personnel
releases Purchase
Order

BSP Finance
Department
checks with the
GR process

Payment released
to Musfada bankaccount

Musfada gives
commission to
BSP personnel

Below is the percentage of the commission as instructed by David Chong to Steve Liew
and Thomas Ling:• 50% of the commission if goods were not delivered.
• 30% of the commission if goods were delivered.
Normally the commissions would be given a few days after Musfada Enterprise hadreceived the PO from BSP. Commissions for the Purchase Order (PO) creators were mostly
given by David Chong to expedite the release of the PO.
• 3% of the commission would be given to Supply Chain Management (SCM) buyers.
The 3% commissions would be paid at the end of the month, and it was based on thenumber of POs created in a month. Once the PO was released, Steve Liew or Thomas Ling
would approach STL personnel and pay commission for signing the delivery notes andacknowledgment in the SAP System for goods received.
The BSP employee who signed the delivery notes gets BND$100 to BND$200 for eachsigned delivery note. The commission would be paid after signing the delivery notes. The
delivery notes were signed without any inspection of the goods delivered. After the delivery
notes were signed and acknowledged in the SAP system for goods received, Musfada Enterprisewould issue their invoice to claim from BSP. Finally, BSP would then release the payments to
Musfada. All payments from BSP were paid into Musfada Enterprise HSBC’s bank account inBrunei Darussalam.
As a result of these orders, sales profits increased and benefited David Chong immensely.

- 61 -

F.

Money Laundering
From the predicate offence of cheating BSP, David Chong then proceeded to launder themonies from the Musfada sales profits by transferring and depositing them into several bankaccounts in Brunei and also to bank accounts in Singapore to conceal the proceeds of his crime.
1.

Money Proceeds Deposited into Bank Accounts in Brunei
David Chong withdrew money from the Musfada company account by cashing chequesand subsequently depositing the money into eight (8) bank accounts under his name in Brunei
amounting to BND$439,650.43. It was also discovered that on 27 August 2009 David hadtransferred BND$690,000.00 from one of his accounts to his lawyer’s company bank account.
2.

Money Proceeds Deposited into Bank Accounts in Singapore
Investigation subsequently revealed that several telegraphic transfer transactions from the
Musfada account were sent to David Chong’s accounts in Singapore, amounting to
BND$642,143.91.
III. RECOVERING THE PROCEEDS
With the passing of the Criminal Asset Recovery Order (CARO) in June 2012, the ACB
launched a money laundering investigation under Section 3 (1) of CARO, in parallel to the ongoing investigation on cheating and false claims. The steps taken by the ACB in recovering theproceeds of corruption are illustrated below:
A.

Collecting Intelligence and Evidence and Identifying and Tracing Proceeds
Domestically and in Foreign Jurisdictions Using MLA
1.
Assistance from the Malaysian Anti-Corruption Commission (MACC)
On 14 May 2009, the ACB conducted operations and searched Musfada’s office and seized
relevant documents relating to Musfada claims to BSP and BLNG. David Chong evaded
investigation and fled the country on 20 September 2009 via the Sungai Tujuh Kuala Belait
Brunei Immigration Control Post. With the assistance of the Malaysian Anti-Corruption
Commission (MACC), the ACB was able to execute the warrant of arrest through the use of the
Summons and Warrants Act (Special Provisions) (Cap 155) in Kuching, Sarawak, Malaysia.
David Chong was subsequently arrested by the MACC and was surrendered to the ACB officers
at the Brunei border. He was charged in Brunei Court in October 2011 for 40 counts of charges
under the Prevention of Corruption Act, Chapter 131, and Penal Code, Chapter 22. He wasreleased on a cash bail of BND$200,000.00.
2.

Assistance from the Corrupt Practices Investigations Bureau (CPIB), Singapore
To prevent David Chong from moving and disposing the monies in the bank accounts,
the ACB obtained a restraining order against both David and Musfada Enterprise’s local
accounts in Brunei. However, for bank accounts in Singapore, the ACB sought assistance fromthe Corrupt Practices Investigation Bureau (CPIB), Singapore. The CPIB then guided the ACB
to channels and procedures for obtaining assistance, and the ACB was subsequently referred to
the Commercial Affairs Department (CAD) of the Singapore Police Force (SPF). CAD later
provided the ACB with information in regard to the procedures to freeze the accounts of David- 62 -

Chong in the Singapore banks.
B.

Freezing, Seizing and Confiscating Proceeds Domestically and in Foreign
Jurisdictions Using MLA
1.
Money Deposited into Bank Accounts in Singapore(a) Commercial Affairs Department (CAD) Singapore
The CAD then conducted its own investigation on money laundering on David Chong andhelped to freeze the bank accounts and to identify and trace other bank accounts registered underDavid Chong’s name in Singapore. This required a First Information Report to be submitted by
the ACB to the CAD.
(b) Attorney General’s Chambers (AGC), Singapore
With the Attorney General’s Chambers of Brunei and the Attorney General’s Chambers ofSingapore functioning as the Central Authorities for Mutual Legal Assistance and working
together, the ACB was able to obtain the corrupt proceeds amounting to SGD$642,143.91 fromthe accounts which were frozen by the authorities in Singapore.
2.

Money Deposited into Bank Accounts in Brunei
On 12 October 2009, the ACB applied to the Public Prosecutor for a restraining order tofreeze eight (8) bank accounts registered under David Chong and Musfada Enterprise. The funds
in Brunei amounting to BND$439,650.43 were placed under a freezing order under Section 23B(1) of the Prevention of Corruption Act (Cap 131).
C.

Court Process
On 28 November 2013, David Chong pleaded guilty to 40 charges under the Prevention of
Corruption Act, Chapter 131 and the Penal Code, Chapter 22. David Chong was sentenced to 6
years and 4 months’ imprisonment. Based on the judgement made by His Honour Gareth John
Lugar Mawson, High Court Judge, Chong consented to a Benefit Recovery Order under section
75 read with Section 132 of the Criminal Asset Recovery Order (2012), under which David
Chong was to pay to the state within 9 months of the date of order (28 November 2013) the sumsof SGD$219,838.10 and USD$326,174.55. These sums were equivalent to the amount and/or
value of David Chong’s bank account in Singapore. In addition, Chong was order to pay to thestate the equivalent of the interest accruing on those accounts at the time of payment, and in
default of payment is to serve a term of imprisonment of 5 years, which term is to be servedconsecutively to the sentences imposed in respect of the substantive charges and the offences
taken into consideration.
With the legislation permitting a Benefit Recovery Order (2012) Section 132, under the
Criminal Asset Recovery Order (CARO), the ACB managed to recover SGD$219,838.10 and
USD326,174.55. The court also ordered Chong to pay the sum of BND$180,000.00 for theProsecution’s costs.
D.

Enforcement of Orders
On 26 July 2014, the ACB served David Chong with a “Notice of Registration of an Orderof forfeiture as a foreign confiscation order” issued by the Attorney-General Chambers of the
Republic of Singapore, as well as copies of the Orders of the Court in originating summons 656- 63 -

of 2014, 657 of 2014 and 658 of 2014, dated 17 July 2014, which have been issued out of theRegistry of the Supreme Court of the Republic of Singapore against David Chong. The MLA
request was only obtained after the sentencing of David Chong. This is due to the fact that theconfiscation order could only be made upon conviction of David Chong. Additional documents
such as the Affidavit of the Investigating Officer and certified copies were furnished along with
the MLA request. With David Chong cooperating by signing to waive the cancellation of theregistration, the Singapore Central Authority then was able to transfer all of his funds in
Singapore to Brunei Darussalam. Investigation confirmed that as of 25 November 2014, all thefunds from Singapore had been transferred into the ACB HSBC account amounting to
BND$642,143.91.
The total amount of David Chong's and Musfada's frozen funds in Brunei is
BND$850,617.55. An application was made to the Public Prosecutor for the monies to beforfeited to the state under CARO for a Non-Conviction Based (NCB) forfeiture. As for thefunds amounting to SGD$642,143.91 received from Singapore, the funds were transferred to the
Ministry of Finance, Brunei Darussalam.
E.

Return of Assets
The enforcement of the confiscation order resulted in the transfer of all the funds in the
ACB HSBC account to the Criminal Assets Confiscation (CARO) Fund account as of 19 May
2015, which is maintained by the Permanent Secretary of the Ministry of Finance in accordancewith Section 123 of CARO.
Below is a newspaper report on this matter:
THE Attorney General’s Chambers (AGC) has recovered over BND$600,000
from the bank accounts in Singapore of a key Brunei Shell Petroleum
contractor, who was jailed for bribery in November 2013.
The case marked the first time the Government of Brunei Darussalam has
enforced an asset recovery order through the use of Mutual Legal Assistance,
the AGC said in a press statement.
The AGC said the recovery of the proceeds of the corruption case served as “areminder that criminals who hide their money and assets overseas are notuntouchable”.
The contractor, Malaysian national David Chong, who was the manager ofMusfada Enterprise, was found guilty of multiple counts of bribing Shell
employees in what was described by the High Court as a case involving“syndicated corruption on the large scale” between 2005 and 2009. The case
was investigated by the Anti-Corruption Bureau.
In addition to Chong’s total jail term of six years and four months, the judge inthe case, Judicial Commissioner John Gareth Lugar-Mawson, had made a
Benefit Recovery Order under the Criminal Asset Recovery Order (CARO) in- 64 -

order to recover funds held in Chong’s bank accounts in Singapore.
The AGC and the Attorney General’s Chambers of Singapore, both of whichfunction as the Mutual Legal Assistance Secretariats of their respective nations,
had carried out extensive cooperative work to enforce the Benefit Recovery
Order.
“The money is to be paid into the Criminal Assets Confiscation Fund,established under CARO which is managed by the Permanent Secretary of the
Ministry of Finance,” the AGC said.
The AGC said the recovery of proceeds from the crime highlighted theimportance of mutual legal assistance.
The successful enforcement of the Benefit Recovery Order is also testament tothe strong and robust international cooperation framework that Brunei
Darussalam possesses through laws such as the Mutual Assistance in Criminal
Matters Order (MACMO) and the Criminal Asset Recovery Order as well as
the strong and long-standing working relationship between the Attorney
General’s Chambers of Brunei Darussalam and Singapore. 4
IV.

CHALLENGES IN RECOVERING THE PROCEEDSThe process for asset recovery by way of formal MLA requests as well as informal
requests was not without its challenges. Initially, tracing the proceeds was stymied because there
was insufficient information to narrow the search to a particular bank and account number in
Singapore when David Chong had refused to give further statements to the ACB upon his bail.
Furthermore, due to the Bank Secrecy Act, disclosure of account information delayed the process.
This obstacle was overcome with the assistance of CAD Singapore which launched their own
investigation via the information given by the ACB and eventually was able to provide the ACB
with further information regarding his bank accounts in Singapore.
V.

ADVANTAGESIn order to proceed with any MLA, there must be a legal basis for cooperation which inthis case, came under the umbrella of Mutual Assistance in Criminal Matters Order (MACMO)
between AGC Brunei and AGC Singapore as well as the United Nations Convention Against
Corruption (UNCAC).
Furthermore, due to the long-standing relationship between both countries, the ACB wasable to first begin the international cooperation efforts through informal channels before formallysubmitting its MLA request. The investigating unit personally contacted the officer from CAD
4

Borneo Bulletin, Fadley Faisal, Tuesday, 27 Jan. 2015.

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Singapore conducting the case — both by phone and email and eventually in person. Making thepersonal connection resulted in better efforts to request the MLA request formally.
With regard to bank secrecy, it has been prohibited as a reason for refusing to provide
MLA, according to the OECD Bribery Convention 5 and UNCAC 6.
VI.

CONCLUSION

The success of this case is a testament of how important cooperation and commitment
between anti-corruption agencies and how it is becoming the foundation of success in therecovery of assets involving inter-jurisdictional issues including investigation, prosecution andrecovery of assets. Therefore, the successful tracing and recovery efforts of this case would nothave been possible if not for the international cooperation and mutual legal assistance from the
Malaysian Anti-Corruption Commission (MACC), the Corrupt Practices Investigations Bureau(CPIB), the Commercial Affairs Department (CAD) of the Singapore Police Force (SPF) as wellas the Attorney General’s Chambers (AGC), Singapore.

5

Organisation for Economic Cooperation and Development (OECD), Convention of Combating Bribery of Foreign
Public Officials in International Business Transactions, Article 9(3).
6United Nations Convention Against Corruption (UNCAC), Article 46(8).

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MUTUAL LEGAL ASSISTANCE ANDRECOVERY OF PROCEEDS OF CORRUPTION
Ku Khemlin *I.

INTRODUCTION

In the five mandates issued by the government of Cambodia the core of achieving social
justice and sustainable and equitable socio-economic development was clearly identified. Inorder to further strengthen good governance, the Royal Government has firmly implemented
key reform programmes, including: (1) fight against corruption; (2) legal and judicial reform; (3)public administration reform; and (4) reform of the armed forces. The ultimate objective of thereforms, as well as that of other reform programmes, including public financial management
reform, land reform, and forestry and fisheries reform, is to strengthen the capacity, efficiency
and quality of public services to raise public confidence in the government and respond to theneeds and aspirations of the people and business community.
In Cambodia, there is a strong government commitment to combat the criminals andtransnational crimes in the context of cooperation and mutual legal assistance among theASEAN members and international community through bilateral and multilateral agreements.
The government has developed legislation and policies aimed at prevention, criminalization ofcorrupt conduct and capacity building of judges, prosecutors and law enforcement officers
through national and international training courses and workshops. These measures are importantbecause addressing the issues of mutual assistance in combating corruption and recovery ofproceeds of corruption leads not only to building trust for investors but also to promoting
investment in Cambodia.
II.

CURRENT LEGISLATION IN CAMBODIA

A.

Criminalization and Penalties for Corrupt Conduct
The Penal Code of Cambodia contains protection against corruption and clearly identifies
the criminal offences namely: the offences in article 278 (bribe taking by employees), article 279(bribe offered to employees), article 280 (bribe taking by governor), article 283 (criminal
responsibility by legal entity), article 387 (improper bidding), article 404 (definition of money
laundering), article 405 (sentence to be served), article 406 (aggravating circumstance), article
409 (criminal responsibility by legal entity), article 517 (bribe taking by judges), article 518(bribe offered to judges), article 519 (criminal responsibility by legal entity), article 547 (bribetaking by witnesses for false testimony), article 548 (bribe offered to witnesses), article 553(bribe taking by interpreter), article 554 (bribe offered to interpreter), article 555 (bribe taking by
experts), article 556 (bribe offered to experts), article 559 (criminal responsibility by legal entity),*

Deputy Director General, MOJ, Cambodia.

- 67 -

article 592 (definition of misappropriation), article 593 (sentence to be served), article 594 (bribetaking), article 595 (definition of passive business influence), article 597 (definition ofembezzlement), article 598 (sentence to be served), article 599 (definition of favouritism), article
600 (sentence to be served), article 601 (intentional destruction and dishonest embezzlement),
article 605 (bribe offering), article 606 (active business influence), article 607 (extortion), article
608 (destruction and embezzlement), article 625 (criminal responsibility by legal entity), article
637 (bribe offered to person who has competence to issue false certificate), article 639 (bribetaking by member of professional board of medicine to issue false certificate), article 640 (bribe
offered to member of professional board of medicine to issue false certificate), article 641(execution of misdemeanour of articles 639 and 640 for all medical professions), article 644(criminal responsibility by legal entity).
The law on anti-corruption provides a comprehensive set of criminal offences relating tocorruption. The law aims to guide as a fundamental tool against corruption within the country
and promote effectiveness of all forms of service and strengthen good governance and the rule oflaw in leadership and state governance as well as to maintain integrity and justice, which isfundamental for social development and poverty reduction.
B.

Conventions and Agreements
Cambodia has ratified several conventions and agreements, namely: the Convention on the
Rights of the Child (1989) and its Optional Protocol on the Sale of Children, Child Prostitution
and Child Pornography 2000, the United Nations Convention against Transnational Organized
Crime 2000 and its Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially
Woman and Children 2005, and the International Labour Organization’s (ILO) Convention 182
concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms ofChild Labour 1999. Agreements or conventions between Cambodia and ASEAN (Treaty on
Legal and Mutual Assistance in Criminal Matters, Cambodia ratified 2010) each underpin
increased border cooperation in anti-corruption matters. These instruments may assist withguiding efforts to strengthen frameworks for regional cooperation to target a wider range ofoffences; however, they provide little guidance for cooperation to specifically combat corruption.
Moreover, Cambodia has already ratified the essential convention, the United Nations
Convention against Transnational Organized Crime on 12 December 2015, and has acceded to
the United Nations Convention against Corruption on 5 September 2007.
III. MUTUAL LEGAL ASSISTANCE
Procedures for implementing mutual legal assistance shall be in agreement with theprinciples stated in treaties or bilateral and multilateral agreements, and national law in force.
A.

Mutual Legal Assistance in Civil Matters
The central authority has been established since 2011 within the Ministry of Justice tofacilitate mutual legal assistance in matters of criminal, civil, commercial, extradition, andtransfer of prisoners. For implementation of these activities the Ministry of Justice of Cambodia
has signed a bilateral Memorandum of Understanding on Cooperation between Cambodia and
Lao PDR and a Memorandum of Understanding on Cooperation between Cambodia and Viet

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Nam for information exchange and capacity building among legal staff, judges and prosecutors.
Recently, in order to strengthen mutual judicial assistance between Cambodia and Viet Nam in
civil matters, both parties have agreed to provide assistance in civil matters as a service of the
judiciary–extra of judicial documents, taking and transferring of evidence, summoning of
witness and experts, recognition and enforcement of court judgement and decision, and exchangeof legal information and documents relating to judicial assistance 1.
B.

Mutual Legal Assistance in Criminal Matters
Cambodia’s legal framework for extradition is provided under the Criminal Procedures
2
Code . The code provides a comprehensive set of requirements for carrying out extradition
proceedings in case of absence of an extradition treaty with Cambodia; diplomatic channels may
be used. On the other hand, a bilateral extradition agreement is more appropriate. Cambodia has
extradition agreements with Thailand, Lao, China, South Korea and Viet Nam.
In the case of corruption offences, the court authority of the Kingdom of Cambodia may
delegate power to the competent court authority of any foreign state and may also obtain powerfrom the court authority of any foreign state, in order to collect evidence and information relating
to the offence 3.

There is a strong basis under bilateral and multilateral treaties for Cambodia and othercountries to provide international legal cooperation to investigate and prosecute offences relating
to corruption. Under international legal standards, each country is required to facilitate crossborder cooperation for extradition and mutual legal assistance in criminal matters in cases
relating to transnational crime. A regional ASEAN treaty on mutual legal assistance in criminal
matters is also in place; however, all ASEAN members have not implemented it yet 4. Informalcooperation between law enforcement agencies is also an essential tool in fighting crime.
Informal cooperation—also “police to police” or “agency to agency” (along border) assistance—
typically does not require a legislative basis, and facilitates a wide measure of information
sharing between primary law enforcement agencies of different countries. Informal cooperation
allows police to share law enforcement intelligence (for example, criminal histories andmovement records) during the investigation stage, while evidence is still being gathered. The
importance of informal law enforcement cooperation is more appropriate because of its closer
link compared with the formal mechanism of extradition and mutual legal assistance.
IV.

RECOVERY OF PROCEEDS OF CORRUPTIONA.

Corruption Proceeds Offences
Corruption proceeds offences are acts to conceal, keep or transport any kinds of goods withknowledge that those are corruption proceeds as mentioned in the anti-corruption law. Acts thatcan be counted as corruption proceeds offences are as follows: acting as an intermediary for
1

Agreement on mutual judicial assistance in civil matters between the Kingdom of Cambodia and the Socialist
Republic of Viet Nam 2013.
2
Criminal Procedure Code , Book, Article 566 to 595.
3
Law on Anti-corruption, Article 51.
4
ASEAN Treaty on Mutual Legal Assistance in Criminal Matters (2004).

- 69 -

transporting items with the knowledge that they are corruption proceeds; or an act that benefits
from corruption proceeds with clear knowledge 5 . If an employee is found guilty, he or sheshould be imprisoned from 6 months to 2 years 6.
B.

Liability for Corruption
When a person is found guilty of corruption, the court shall confiscate all his/her
corruption proceeds including property, materials, instruments that are derived from corruption,and the proceeds shall be transformed into state property. If the seized asset istransferred/changed into different property from the nature of the original asset, this transformed
asset will become the subject of seizure at the place where it is located. If the corruption
proceeds make more benefits or other advantages, all of these benefits and advantages will be
seized as well. If the corruption proceeds disappear or lose value, the court may order thesettlement of the proceeds.

The hand-over of property is not mentioned clearly in the code. As a matter of practice,property is seized upon the extradition agreement and its requirement for the evidence of the caseat the time of arrest, and the seizure is based on the Investigation Chambers’ decision attached to
the Appeal Court in Phnom Penh.
V.

CONCLUSION

The current legal and policy framework demonstrates Cambodia’s firm commitment tofighting against corruption. The criminal code and criminal procedure code play a crucial role asfundamental laws in anti-corruption proceedings. The code provides a comprehensive set of
requirements for carrying out the extradition and the procedures of asset recovery which shouldbe agreed to in the bilateral and multilateral agreements in principle.
The law on anti-corruption provides a comprehensive set of criminal offences relating tocorruption and confiscation of all corruption proceeds including property, material, andinstruments that are derived from corrupt acts, and the proceeds shall be transformed into state
property.
The essential alternative to legal assistance is informal cooperation—also “police to police”
or “agency to agency” (along border) assistance—typically does not require a legislative basis orreciprocity. Facilitating a wide measure of information sharing between primary law
enforcement agencies of different countries is the appropriate, successful way of handlingcorruption offences.

5
6

The Anti-Corruption Law, Article 37.
The Criminal Code, Article 278.

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PUBLIC–PRIVATE PARTNERSHIP TO PREVENT AND DETECTCORRUPTION
Ms. Seng Lina *I.

OVERVIEW

Corruption is a complex social, political and economic phenomenon that affects all
countries. Corruption is an offence which has the potential to affect multiple sectors and which isvery difficult, complex in nature and not easy to overcome. Confronting the challenges presented
by corruption requires more practical mechanisms and strategies accompanied by strong legal
and professional institutional frameworks.
The Royal Government of Cambodia (RGC) is committed to combating corruption withsupport, and endeavours to have the Anti-Corruption Law adopted along with other relevant laws
and regulations, including the establishment of the Anti-Corruption Institution (ACI), which is
empowered by law with independent operations. The participation from all stakeholders, bothfrom the public and private sectors, is important and indispensable to fighting corruption. In
order to achieve this, both sectors have to work together and offer full collaboration with theAnti-Corruption Unit (ACU).
II.

BACKGROUNDThe Royal Government of Cambodia has paid great attention to combating corruption
since the UN-organized General Elections in 1993. In 1992, Cambodia adopted the Criminal
Law Act in which three of its articles were related to corruption, namely embezzlement, bribetaking and bribe offering. In 1999, an anti-corruption mechanism was first established in
Cambodia. It was called the Unit Against Corruption Practices. In 2006, the Unit was
restructured and renamed the Anti-Corruption Unit.
On 17th April 2010 the first separate Anti-Corruption Law was promulgated and the AntiCorruption Institution established. The Anti-Corruption Institution is composed of two bodies,
the National Council Against Corruption (NCAC) and the Anti-Corruption Unit. Since its
creation, the Anti-Corruption Unit has been implementing three intertwined approaches:
Education, Prevention and Law Enforcement, which have been supported and encouraged by thegovernment with the participation from the authorities at all levels, the private sector, the media
and civil society. Due to the complicated and sophisticated nature of corruption, the anticorruption work could not be undertaken solely by any particular ministry or institution.
Therefore, the National Council Against Corruption sets out its exact strategy that the Anti*

Legal, Complaint and International Affairs Dept., Anti-Corruption Unit (ACU), Cambodia.

- 71 -

Corruption Unit needs the collaboration and support from relevant stakeholders, both at national
and international levels, in order to fight corruption.
Prioritized policies and programmes on anti-corruption are clearly specified in roadmap
papers such as the Rectangular Strategy Phase I, Phase II, and Phase III, and the National
Strategic Development Plan (NSDP) 2014-2018 which reflects the government’s political will.

III. PUBLIC–PRIVATE PARTNERSHIP TO PREVENT AND DETECTCORRPUPTIONA.
1.

Government Political Will
National Level
The Royal Government of Cambodia views anti-corruption as a priority task. The will has
been shown through:• At the 8th Regional Assembly on Anti-Corruption and Building Trust in September
2014, Samdach Akka Moha Sena Padei Techo HUN SEN, Prime Minister of Cambodia,
stressed that “ I believe it is imperative that both sectors, the public and the private, joinhands to fight corruption; this is because the anti-corruption policy and programmelaid out by the government will not work to the fullest extent if the private sector does
not come on board; of course, failing to do so for the private sector would inherently
mean that they are not being privately and socially responsible in conducting theirbusiness. It is doubtless that when both the public and the private sector work together,
it will not only help improve the effectiveness of the fight against corruption, but also
create an environment attracted to investment and clean business in the region andbeyond.”• The government’s “Political Platform” and the continuation of putting forward the anticorruption task which set forth the first angle of good governance — the core of “theRectangular Strategy Phase III” of the government.
• The adoption of the Anti-Corruption Law in 2010 and the amendment of the law in2011 which led to inception of the Anti-Corruption Institution with power, privilege,
and independence in its operations.
2.

International Level
Cambodia has become a party to international organizations and legal instruments such as:• The ADB/OECD Anti-Corruption Initiative on 5 March 2003
• United Nations Convention Against Corruption (UNCAC) on 5 September 2007
• South East Asia Parties Against Corruption (SEA-PAC) on 11 September 2007

- 72 -

• ASEAN Treaty on Mutual Legal Assistance in Criminal Matters• International Anti-Corruption Academy (IACA) on 14 December 2013
• International Association of Anti-Corruption Authorities (IAACA) since 2006
• MOU Cooperation with Thailand and Laos.
B.
1.

Public–Private Partnership to Prevent Corruption
Establishment of Government–Private Sector Forum (G-PSF)
The Government–Private Sector Forum (G-PSF) was established in 1999. It is a public–
private consultation held bi-annually under the chairmanship of the Prime Minister. The
objective of the forum is to take into account the progress reports by its 10 working groups,
namely: (i) Agriculture and Agro-Industry (ii) Tourism (iii) Manufacturing, SMEs and Services(iv) Laws, Taxation and Governance (v) Banking and Financial Services (vi) Transport andInfrastructure (vii) Export Processing and Trade Facilitation (viii) Industrial Relations (ix) Rice,and (x) Mines and Energy. The aim of this meeting is to collect all comments and challenges
faced by the private sector and then come up with immediate solution.
2.

Signing Memoranda of Understanding (MOU)
In addition to the action taken related to the prevention tasks through the collaboration withthe public institutions, the Anti-Corruption Unit also focused on the support, promotion for theexchanges of views and ideas, as well as to strengthen career development aiming to work evencloser with the private sector, through the joint commitment and agreement under a form ofsigning MOUs on anti-corruption cooperation between the Anti-Corruption Unit and private
national and international companies. So far, the Anti-Corruption Unit has signed MOUs with 22
national and international companies. This has been used as an example in an effort to jointly
fight corruption and the practices of clean business in order to give a message to the otherinvestors who have always been worried about the investment climate in Cambodia and feel
reluctant to invest. These efforts ensure that clean business is being carried out widely, becoming
deeply rooted day by day in Cambodia. In December 2013, the Anti-Corruption Unit signed an
MOU on cooperation in fighting corruption with the Cambodia Beverage Company Ltd. (Coca–
Cola Cambodia Company), and through this MOU the collaboration and exchange of
information related to corruption among the two institutions can be made. In addition, in early
October 2014, the Anti-Corruption Unit also signed the same kind of MOU with Prudential(Cambodia) Life Assurance PLC, which is one of the leading international life insurancecompanies in Cambodia.
 The Objectives of Memoranda of Understanding• The company, in its going commitments to be a clean entity and to build atransparent culture, will continue to fully comply with all applicable laws andregulations relating to Anti-Corruption.
• The company will continue not to participate in any acts of corruption or bribery.

- 73 -

• The company will continue to educate all of its employees to promote a clean
environment in dealing with government officials, suppliers, customers and otherorganizations or individuals.
• The company may take a proactive approach in keeping the Anti-Corruption Unit
informed of any solicitations or improper payments demanded by government
officials.
• The Anti-Corruption Unit will keep absolute confidentiality of corruption-related
information sources and take all necessary measures to keep the corruption whistleblowers secured and commence investigation.
• The Anti-Corruption Unit will make its best efforts to cooperate with the company
and to fulfill any reasonable requests from the company to contribute to theprevention and combating of corruption in Cambodia.
3.

Establishment of Public Service Deliveries
In order to solve the problems faced by the private sector relating to illegal fees, the AntiCorruption Unit has worked with 21 ministries/institutions to develop a list of public service feeswith the joint efforts of the Ministry of Economy and Finance, through consultations with theprivate sector. The Anti-Corruption Unit, together with all the above-mentioned stakeholders,has worked to create the foundation for the effectiveness of all State public service deliveries atalmost all ministries and government institutions. The standard of public service, which is set in
the form of a joint proclamation between the Ministry of Economy and Finance and the relevant
ministries/institutions, precisely determined the actual fee and time needed for the service to bedelivered, the use of uniform receipts officially issued by the Ministry of Economy and Finance,
the establishment of One Window Services, a complaint mechanism, the preparation of annual
reports of revenues and expenditures, and in particular to give government officials incentives asa result of the public services fee collection work. This task has won applause from both
ministries and institutions as the service providers and especially from the private sector as theservice receivers who wish to see new development of the legal framework and the context of thecountry after the Law on Anti-Corruption has entered into force.
4.

Observing Public Procurement• The Anti-Corruption Unit also engages in observing the bidding process run by theGovernment’s ministries/institutions and NGOs when requested by the hostministry/institution. The role of the Anti-Corruption Unit is to observe from the firststage of announcing the bidding process, the opening of the bidding envelopes and thefinal stage of awarding the contract to the winning bidder.
• The companies taking part in the bidding gained more confidence and trust in the result
and the bidding process as the process was transparently undertaken in front of all
relevant parties.

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5.

Anti-Corruption Programme in Education
With the government’s long-term vision, the Anti-Corruption Unit collaborated with the
Ministry of Education, Youth and Sports setting out policies and an anti-corruption education
programme aiming to instill into younger generations a consciousness, clean mindset, disgust at
corruption, love of justice, integrity, law abidance, and respect for themselves and others. The
anti-corruption course books were developed and introduced into the school curriculum,
including private schools. For High School (Grades 10-12), the curriculum is implemented in theacademic year 2014-2015 onward and for Lower Secondary School (Grades 7-9) in the academic
year 2015-2016 onwards.
6.

Anti-Corruption Law Dissemination• The Anti-Corruption Unit disseminates the Anti-Corruption Law to banks, privatecompanies, private schools, and ministries/institutions. The Anti-Corruption Unit has
worked with private schools and companies such as Beltei University, American
Intercon School (AIS) and Prudential Life Assurance Company. The purpose of theanti-corruption law dissemination is to raise awareness about corruption and its negative
impacts with the aim of making the whole society begin to accept the new mindset andperspective in order that they all join hands to fight corruption, our common enemy.
• The Anti-Corruption Unit has adopted 9th December as its National Anti-Corruption
Day. The Anti-Corruption Unit annually takes this opportunity to engage in collective
efforts to jointly combat corruption among the public and the private sectors. As anorganizer, the Anti-Corruption Unit always broadcasts this event live on TV, which can
attract millions of viewers and which results in the support from the public to fightcorruption.

C.
1.

Public–Private Partnership to Detect Corruption
Mechanism of Reporting Corruption• Companies have an important role to play in the prevention, detection and prosecutionof actors involved in corruption, as companies can cooperate and assist anti-corruption
authorities to understand how the corrupt act occurred, how it was uncovered and how
proceeds of crime can be recovered.
• Companies can cooperate with authorities by self-reporting possible corruption and byproviding actual evidence in relation to internal irregularities and business partners to
the Anti-Corruption Unit.
• Companies can report corruption to the focal point of the Anti-Corruption Unit throughall means which are easier and faster; for instance, via phone call, email or messaging.

2.

Public Reporting and the Complaint System
The public can report complaints to the Anti-Corruption Unit as follows:• Drop a complaint in the ACU white boxes• Send a complaint to the ACU P.O Box- 75 -

• Lodge a complaint via the ACU’s email: complaint@acu.gov.kh• Drop at the ACU office at #54, Norodom Blvd, Sangkat Phsar Thmei III, Khan Daun
Penh, Phnom Penh or• Call the ACU hotline 1282.
The complainants can also join the complaint analysis meeting if they wish.
3.

Whistle-Blower Protection-Anti-Corruption Law• Article 13 : Duties of the Anti-Corruption Unit
Point 7: Keep absolute confidentiality of corruption-related information sources.
Point 8: Take necessary measures to keep the corruption whistle-blowers secured.
• Article 39: Leakage of Confidential Information on Corruption“Any person who leaks the confidential information on corruption shall be sentenced
from one to five years in prison”.
-Sub Degree No. 05 on the Organization and Functioning of the Anti-Corruption Unit
• Article 3: Duties of the Anti-Corruption Unit
Point 8: Keep absolute confidentiality of corruption-related information sources.
Point 9: Take necessary measures to keep the corruption whistle-blowers secured.
• Article 13: Department of Security
Point 5: Keep witnesses, complainants and corruption whistle-blowers secured.
Point 6: Request intervention and cooperation from competent authorities if necessary toprotect witnesses and complainants.
• Article 16: Department of Legal, Complaint and International Affairs
Point 9: Keep confidentiality of corruption reported by complainants and witnesses.
• Article 19: Department of Investigation and Intelligence
Point 8: Cooperate with the Department of Security to keep witnesses, complainants andcorruption whistle-blowers secured and safe.

D.

Achievements• Companies create teamwork and focal points to contact the Anti-Corruption Unit
• Companies gain confidence as a result of the fact that the Anti-Corruption Unit hassigned MOUs with 22 private companies after Coca Cola Company preceded• The Guidebook on Anti-Corruption Program for Business in Cambodia, which
describes types of business relationships and other measures that are required to deterand prevent corruption, was published and distributed- 76 -

• Unofficial payment has been reduced maximally and the business runs smoothly.

IV.

WORK IN PROGRESS• Organize serial consultation meetings with the private sector on a regular basis. For
example, once a month or every two months• Encourage private sector players to develop their own anti-corruption frameworks• Encourage the private sector to create clean business clubs to combat corruption.

V.

CONCLUSION

Though Cambodia has enjoyed full peace for only a short time, the Royal Government of
Cambodia, under the clear-sighted leadership of Prime Minister Samdach Techo Hun Sen, hasmade remarkable progress in the economic and social sectors, especially good governance andcombating of corruption.
The Royal Government of Cambodia is strongly committed to continue strengthening good
governance and fighting corruption. Fighting corruption is a key to ensure equitable division ofsocial resources and attracting foreign investment as well as social justice. The Royal
Government of Cambodia and the Anti-Corruption Unit always encourage the private sector tocontinue collaborating to fight corruption in order to build a clean society and prosperity.
Cambodia continues to cooperate closely with the international community particularly in
the implementation of the United Nations Convention Against Corruption (UNCAC). The
private sector plays an important role to combat corruption in order to do business withtransparency and integrity as well as fair competition. The Anti-Corruption Unit is committed towork with the private sector and all stakeholders to build a clean business environment.

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CREATING AN EFFECTIVE MUTUAL LEGAL ASSISTANCE (MLA)
REQUEST
Afief Yulian Miftach*I.

INTRODUCTION

As one of the primary forms of international cooperation, mutual legal assistance (MLA)
requests play a very important role to recover assets that have been stashed abroad, either
assets that belong to the perpetrator or that are considered as proceeds of corruption. Such
requests have become the basis for the requested states to provide assistance in obtaining
information, intellegence, evidence, provisional measures, confiscation, and eventual returnof assets. Thus, an effective MLA request is very crucial to ensure the effectiveness of thewhole process of asset recovery. In order to deal with this, the international community has
concluded a number of multilateral treaties or instruments requiring states parties tocooperate with one another on investigations, production of evidence, provisional measuresand confiscation, and asset return. 1
Even though there are many references available that can be used to formulate MLA
requests, it is unfortunate that creating such requests is not a simple process, especially forcountries submitting MLA requests for the first time, not only because it often depends on
assistance given by the requested state, but also because it can be slowed and complicated bydifferences in legal traditions, law and procedures, languages, capacities, and even time zone.
Therefore, it requires strategic considerations, and characteristics of various options that canbe used to create an effective MLA request. The Indonesian Anti-Corruption Commission(KPK) has experienced numerous cases of succesful international cooperation with otherjurisdictions in investigating and prosecuting corruption cases. 2 One of the keys to successthat can be learned by those experiences is the use of an effective MLA request, which was
conducted by combining both the informal request for assistance and formal MLA request.
Inspired by those cases, KPK is now moving forward to deal with international cooperation
related to asset recovery. Recently, KPK through the Indonesian Central Authority has beenrequesting assistance from other jurisdictions to identify, freeze, seize, and confiscate theproceeds of corruption. Due to the ongoing process of the investigation, this paper will not
explain the detail of the requsted assistance. Therefore, this paper will seek to describe
mechanisms and strategies that can be used to formulate an effective MLA request.

*

The Corruption Eradication Commission (KPK).
Brun, Jean-Pierre, Gray, Larissa, Scott, Clive, Stephenson, Kevin, Asset Recovery Handbook, A Guide for
Practitioners, p. 121.
2
For example: The Alstom case, The Innospec case, and the arrest of fugitives in several jurisdictions.
1- 78 -II.

KEY PRINCIPLES IN DEVELOPING INTERNATIONAL COOPERATIONInternational cooperation is essential for the succesful recovery of assets that have beentransferred to or hidden in foreign jurisdictions. Efforts to develop international cooperation
should consider these four key principles: 3a.

Incorporate international cooperation into each stage of the case
It is important for the law enforcement agency to immediately focus on international
cooperation efforts when the case reaches beyond domestic borders. Any delay ofthis effort may gave the corrupt official the chance to transfer funds or to hide assets
in uncooperative jurisdictions.

b.

Establish and Maintain Personal Connections
Developing personal connections with foreign counterparts is very crucial to ensure
the success of asset recovery cases. A telephone call, an e-mail, a video conference,or a face-to-face meeting with foreign counterparts will go a long way to moving thecase to completion. 4 Even though establishing personal connections can be difficult,the time and effort spent making such connections will be worth the result.

c.

Engange in informal assistance channels before, during, and after transmitting an
MLA request
Prior to the drafting of the MLA request, some important information can beobtained more quickly and with fewer formalities through direct and infomal
communication with counterparts abroad. Thus, more proper considerations for
MLA requests can be provided and all the requirements are met.

d.

Awareness of Potential Barriers
In order to obtain international cooperation, law enforcement agencies may facenumerous obstacles, and appropriate measures are needed to overcome those barriers.
Differences in legal traditions and confiscation systems, jurisdicition issues,variations in procedural, legal obstacles and delays are among those barriers. Thus,
law enforcement agencies should consider and take actions to overcome thosebarriers.
III. MEASURES FOR CREATING AN EFFECTIVE MLA REQUEST

Mutual Legal Assitance (MLA) is a process through which jurisdictions seek and provide
assistance, and this can be done at any stage of investigation, prosecution, or court
proceeding. Thus, it has become an indispensable part of international cooperation. The
success of international cooperation in asset recovery might depend on the effectiveness of
the MLA request. In order to create an effective MLA request, the combination of both theinformal request for assistance and formal MLA request is needed.

3

Brun, Jean-Pierre, Gray, Larissa, Scott, Clive, Stephenson, Kevin, Asset Recovery Handbook, A Guide for
Practitioners, p. 123.
4
Ibid, p. 123.

- 79 -

IV. EARLY COMMUNICATIONAs a part of informal assistance, an early notification and consultation is essential. Two
initial questions that must be asked are who should be contacted in order to obtain sufficientassistance and what mechanism should be used. The first person that should be contacted isthe legal attache officer from the embassy of the requested country, or other related officer
such as police liaison officer. Instead of government-to-government and organization-toorganization mechanisms, there are numerous mechanisms available such as the EgmontGroup of FIUs, The Global Focal Point Initiative, the Camden Asset Recovery Inter-Agency
Network (CARIN), or the Interpol channels. The process, then, may occur over the telephone,email, video conference, or even face-to-face meeting between counterparts. It may
incorporate non-coercive investigative measures, such as gathering publicly available
information, conducting visual surveillance, and obtaining information from financial
intellegence units; and it may extend to spontaneous disclosures of information, conducting a
joint investigation, or asking the authorities in another jurisdiction to open a case. 5 Thus,
information gathered during this phase can be used to develop further investigation and may
also lead to a formal MLA request.
V. DRAFTING MLA REQUESTS
When the process subsequently will lead to a formal MLA request, communication
should be focused on what will be needed to execute the request and to address potential
barriers. Then, the process can be continued by drafting the MLA request before it is formallysubmitted. It is very important to ensure the involvement of the central authorities from both
the requsting and requested countries when a formal MLA request is being prepared.
Important matters which should be considered by both requesting and requested states while
drafting the MLA request are:a.

Legal Basis for International Cooperation
There are several legal bases that can be used by a requested state to proceed with an
MLA request, and they must be clearly specified in the request. Those legal basesare:
1. Multilateral conventions, treaties, and agreements.
2. Bilateral treaties and agreements.
3. Reciprocity undertakings.
4. The use of domestic legislation of the requested stateb.

5

Principle of Dual Criminality
The principle means that both requesting and requested states have criminalized thespecified criminal conduct. Moreover, details of criminal offences and a summary of
criminal conduct should be addressed in the request.

Ibid, p. 128.

- 80 -

c.

The Description of Assistance or Material Sought and the Reason Why It is Sought
Requirements for assistance vary among jurisdicitions. Although most jurisdictions
will permit requests during the investigation stage, others will require moreconsiderations, especially for the provisonal seizure or restraint of assets. Moreover,other jurisdictions will not provide assistance if the criminal proceedings have beenconcluded. 6
It is also very important to address any particular requirements/procedures to befollowed to provide the assistance requested. Practically, request for assistance must
contain sufficient information in order for the requested state to understand what isbeing sought and its connection with the underlying facts. Thus, the requested stateis able to act on behalf of the requesting state within its jurisdiction.

d.

Assurance and Undertakings (Reciprocity, Confidentiality, Limits on Use/Speciality,
and Commitment to Pay Costs or Damages)
Many jurisdictions require a reciprocity assurance, a written statement that therequesting jurisdiction will provide the requested jurisdiction with the same type ofcooperation in similiar cases in the future. Others may also require the requesting
jurisdiction to specify if it wishes the request to be treated as confidential.
Furthermore, jurisdictions may require an assurance that the requesting state will use
the information given by the requested state only for the case described in therequest of assistance. Lastly, some jurisdictions may require a commitment to pay
any costs or damages incurred by the requested party during the course of executingof the request. 7

e.

Evidentiary Requirements
The requesting state usually has to provide sufficient admissible evidence to officials
in the requested state to enable them to meet the evidentiary treshold mandated bytheir courts in executing the request. 8 The involvement of a prosecutor during theprocess is very crucial in order to ensure the admissibility of the evidence before thecourts.

f.

Form and Content Requirements
MLA requests must be in writing and must meet the language, content, and format
requirements of the requested state. 9g.

Refusal Grounds
There are several reasons why the requested state may refuse an MLA request incertain circumstances when the execution of the request would prejudice theessential interests of the requsted state. There are also other reasons such as assets ofde minimis value, double jeopardy, capital punishment, immunities, and lack of due
process of law in the requsesting state. 10

6Ibid, p. 141.
Ibid, p. 142.
8
Ibid, p. 143.
9
Ibid, p. 143.
10
Ibid, p. 147.
7

- 81 -

h.

Particular Time Frames for the Execution of the Request
This drafting process and resulting assistance helps to ensure that all therequirements are met and to avoid unnecessary delays of refusal of assistance. It also
gives the requested state a chance to prepare its responsive actions.
VI. THE SUBMISSION OF AN MLA REQUEST

After the draft is finalized, an MLA request must be signed by the appropriate
authorities—often the central authority of the requesting state, which is then transmitted to
the requested state through specified channels. Some jurisdictions may use optional
diplomatic channels when transmitting the MLA request.
After the submission, the requesting state must ensure that the request is excecuted by
the requested state. Another informal communication is needed to clarify whether any
terminology or translation issues have occured or additional information is needed. A
supplementary MLA request may be required to overcome those issues and to provide
additional information.
VII. CONCLUSION
An important part of international cooperation in the recovery of proceeds of corruption
is the MLA request, which is used by jurisdicitons to seek and provide appropriate assistance.
The process of creating an effective MLA request is not an easy task and requires a
combination of both the informal requests for assistance and formal MLA requests. By
creating an effective MLA request, international cooperation in the recovery of proceeds ofcorruption can be successful.

Reference: STAR Asset Recovery Handbook, A Guide for Practitioners, Jean-Pierre Brun,
Larissa Gray, Scott, Clive Scott, Stephenson, Kevin M. Stephenson.

- 82 -

RECOVERY OF PROCEEDS OF CORRUPTION:
THE INDONESIAN AGO’S POINT OF VIEW
Banu Laksmana *I.

BACKGROUND

The past decades have witnessed profound social, political and economic change inIndonesia. However, significant challenges to development remain. As indicated by the data
provided by a widely respected international non-government agency headquartered in Berlin,
Transparency International’s (TI) Corruption Perception Index in 2014, corruption problems inIndonesia can be clearly seen. Indonesia was ranked 107 out of 175 countries, with estimatedlosses of USD 900 million.
In addition to that, narcotics and drug dealing and trafficking has increased in the last
decade, according to research conducted by the University of Indonesia in collaboration with The
National Anti Drugs Agency (BNN). Their research indicates that the personal and social cost ofillegal drug use came to the figure of USD 5 million in 2012.
The research of the Food and Agriculture Organization (FAO) also showed that illegal
fishing in its territorial waters cost Indonesia around USD 60 million annually while theIndonesian Ministry of Marine and Fishery data showed that only USD 3.1 million could berecovered, or barely 2% of the loss.
The situation worsened according to the data of the Indonesian Ministry of Forestry andthe State Audit Body, which showed that in 2010 Indonesia suffered a loss of USD 3.1 millions
from illegal logging and lost around 2.1 million hectares of land subsequently.
The several assets or wealth-related crimes mentioned above are proof that these crimes
constantly and continuously become the main problems for the Indonesian national economy ingeneral and the welfare of its people. The victims include children in need of education, patientsin need of hospital treatment, and most of all the members of society who contribute their shareand deserve assurance that public funds are being used to improve their lives.
II.

PROBLEMS

There are at least three underlying problems that highlighted the urgent need of
establishing an asset recovery and management office. First, the law enforcement agencies arestill using the “offenders approach” as their main methods of enforcing the law. This approach
focuses on physical punishment or in other words sending the offenders to prison even though* Prosecutor, Asset Recovery Centre, Attorney General Office, Republic of Indonesia.

- 83 -

some types of financial punishment such as pecuniary compensation, fines and asset forfeiture
are recognized by the Indonesian Criminal Code.
Unfortunately, such punishment is only applied in corruption cases and is hardly requested
by prosecutors in other cases while, from the figures above, it is known that there are several
cases that cause bigger losses.
Facts have shown that such approach is not effective since physical punishment has only
little deterrent or curative effects on the offenders who commit crimes based on assets. This isbecause (the second problem) some of the Indonesian law enforcement officials, with the
exception of the personnel of the Indonesian anti-corruption commission (KPK) as they are well
paid and fully facilitated, are still plagued with corrupt practices such as receiving bribes. With
access to their assets, the offenders have no difficulty to negotiate their sentences and arrange
favourable terms for their imprisonment, albeit illegally.
The third problem is that there are blind spots within the court rulings and asset
management system. Relatively poor management and vague practices for handling crimerelated assets tripled with weak court rulings led to the missing and unaccountable assets
controlled by the prosecutors.
III. ALTERNATIVE SOLUTION
The Attorney General’s Office has a slightly different approach. The new approach is nolonger putting all the weight on physically punishing the offenders but taking a more balanced
approach by simultaneously applying a two-prong strategy, that is: punishing the offenders whileat the same time severing the offenders’ access to their illegitimate assets. The underlying
principle in applying this approach is to send a clear and unambiguous message to the assetrelated criminal offenders as well as to the potential offenders that “crime does not pay.”
Offenders who commit these types of crime are usually rational persons who make rational
choices. When they understand that the cost of committing crime is much bigger than its benefit,
they tend to avoid being involving in such crime.
The INDONESIAN AGO is now well aware that abuses of power are widely practiced bylaw enforcement officers in many fields, include the corrupt practices in handling crime-related
assets at all levels (from the investigation stage all the way to the execution stage). There is apressing and practical need to develop a working unit with a different working philosophy, a unitthat works transparently and is accountable as well as effective and efficient so the problems ofcompromising the integrity or abusing power can be minimized or avoided if possible.
The Asset Recovery Centre of the Indonesian AGO developed a system that eradicates, orat least limits, the presence of blind spots during the process of asset management and disposal,
and in turn makes the Indonesian AGO the major contributor of non-tax state income.

- 84 -IV.

WHY THE INDONESIAN AGO?

The Indonesian AGO is granted with pro-justice (for justice) rights. This means in relation
to criminal matters, the service has the authority to enforce law against offenders, the offenders’accomplices, as well as taking legal action as deemed necessary with respect to crime-related
assets. Indonesian domestic law (Law of Criminal Procedure, Law Number 8 of 1981) contains
provisions about confiscation and forfeiture of crime-related assets. However, it is silent about
the value of such assets. The said provisions have been in force since the enforcement of this law,i.e., since 1981. Any action with the intention to hinder or to disrupt the prosecutors is
considered as the obstruction of justice, and the prosecutors are able to utilize the strong and longarm of the law to severely deal with such action. One has to bear in mind that asset recovery inthis context is a pro-justice action and can only be carried out by the agency granted with projustice rights. The right to prosecute is exclusive to the public prosecutors (dominus litis).
The Indonesian criminal justice system does not recognize private prosecution or police
prosecution. The only state actor allowed to prosecute is the public prosecutor. The AGO has thewidest coverage in the criminal justice system in the context of asset recovery if compared toother law enforcement agencies since they are present in every stage of criminal procedure, fromthe beginning, that is the investigation all the way to the final stage, that is, the execution of court
ruling.
The INDONESIAN AGO has the most comprehensive instruments compared to other law
enforcement agencies when it comes to asset recovery. While other agencies are limited to acting
on criminal matters, the INDONESIAN AGO can act in both criminal and civil matters. Throughits investigating, prosecuting and executing arms, the service handles the criminal matters andthrough its civil and administrative arms (state’s attorneys) handles civil matters. Note has to betaken that the most comprehensive civil and administrative functions of law enforcement are
exclusive to the INDONESIAN AGO. No other agencies carry out similar functions.
The structural networking of the INDONESIAN AGO, with the Attorney General’s Officeas the centre, spans across the archipelago covering a jurisdiction the size of the European
continent, or the distance between New York on the east coast and Los Angeles on the west coastof America. Serving Indonesia with its 33 provincial offices, almost 400 hundred district offices
and almost 90 sub-district offices, the INDONESIAN AGO has the potential to recover assets inthe most effective and efficient ways compared to other agencies.
The law not only confers the authority to confiscate and to forfeit crime-related assets to
the INDONESIAN AGO, it also bestows the Attorney General, ex officio, with the authority to
manage and to dispose such assets. Such authority is delegated to the Deputy Attorney Generalfor Advancement, and currently day-to-day execution of the asset managing and disposing rights
is executed by the asset recovery working unit of the Indonesian AGO, which is answerable to
the Deputy Attorney General.
To address the doubts whether the prosecutors have the authority to carry out the handlingof assets, the notion of assets should firstly be clarified in this context. Here, assets mean those- 85 -

related to certain crimes. The Code of Criminal Procedure, Article 1, paragraph 16, explains that
assets are those in connection with a criminal offence. These assets are subject to foreclosure.
The act of foreclosure referred to in this article is a series of actions taken by the investigators totake over and or to keep under their control assets related to offences as means of evidence ininvestigation, prosecution and trial. It is clear here that law enforcement officials can only carryout actions taken against the assets, since their actions are pro-justice acts. Law enforcers
referred to in this case are investigators of the Indonesian National Police, certain civil servants,
the KPK/Corruption Eradication Commission and the AGO (for cases of corruption and severe
human rights violations).
The handling of assets is not only at the stage of investigations but also prosecution.
During the prosecution process, prosecutors also have jurisdiction to handle assets, because
within the Indonesian justice system, prosecution authority is the dominus litis (domain) of theAG. Regardless of the transfer of suspects and cases during the trial stage, assets, which areevidence, remain under the control of the prosecutors of the AGO.
A.

Executorial Authority
A binding court ruling is still executed by the prosecutors in the Attorney General Office,including the assets that have been decided by the court. Similar to the prosecution, which is thedominus litis of the Attorney General, the execution of final and conclusive court rulings(incraacht) is also within the authority of the Attorney General. This is the justification andlegitimacy for the Attorney General Office to act as the Asset Recovery Office in line with its
duties and functions in the investigation; as public prosecutors who receive the transfer of assets
from investigators, and as the executor who executes court rulings and or decisions, and to carryout a settlement in accordance with a court order or disposal.
Asset recovery is performed at all of these pro-justice stages, so that the strategy to punish
the offenders while at the same time separating them from their assets by severing the offenders’access to their illegitimate assets can be done simultaneously. This asset recovery processincludes tracing, securing, maintaining, confiscating, and repatriating the assets.
V. MANAGEMENT AUTHORITY
State-owned assets are those obtained at the expense of the state budget revenue andexpenditures or from other legitimate acquisition. According to the Government Regulation,state-owned assets obtained from other legitimate acquisition means the assets which are relevantto the context of asset recovery, namely assets acquired under legal provisions or assets obtained
according to a final and conclusive court ruling (incraaht). In the context of the Attorney General
Office, the Attorney General as the head of the institution has ex officio status as the “user ofassets”, but functionally, the Deputy Attorney General for Development carries out the authority
and responsibility as the user of assets to the head of financial bureau, whose functions include:
managing state revenue and money as well as non-tax state revenue of the Attorney andmanaging confiscated assets.

- 86 -

Through the Ministery of Finance Regulation regarding the Management of State-Owned
Assets from the State Confiscated Assets and Gratuities, the Minister of Finance acknowledges
and affirms the Attorney’s pro-justice asset management function, that the Attorney General is
the Administrator of State confiscated assets. The Asset Recovery Centre is specifically designed
to handle asset recovery matters within the pro-justice authority of the Attorney General Officeof Indonesia. The main vision of this centre is to ensure the recovery of the ill-gotten assets fromthe beginning of the investigation to the execution and maximizing the return to the country.
VI.

INFORMAL CHANNELS ARE ALSO IMPORTANT

Recovering proceeds of crimes is complex. The process can be overwhelming for even themost experienced of practitioners. It is exceptionally difficult for those working in the context offailed states, widespread corruption, or with limited resources. That is why the Indonesia AGO is
active in both formal and informal international networks, such as CARIN, the Camden Asset
Recovery Interagency Network, as the only high profile informal network in the world (theIndonesian AGO is the only Asian country to join CARIN). The Indonesian AGO held thepresidency of ARIN AP (a CARIN-type informal network for Asia and the Pacific countries) for2014. The Indonesian AGO believes that such informal cooperation is absolutely important insharing the efforts to trace and recover assets as well as guidance on MLA requests (for The
Formal Action). The bottom line is that if offenders can establish a network to commit crimes,
then the law enforcement institutions should also carry out their task in an integrated way.
The Attorney General Office, through the Asset Recovery Centre of the Indonesian AGO,
enjoys strategic advantages in having pro-justice measures as well as management and disposalof crime-related assets under one roof. Firstly, the prolonged and unnecessary red tape can be
minimized since it is relatively easier for units to cooperate if they are under one line ofcommand. Secondly, considering the egocentric attitudes of law state/government agencies, theseparation of pro-justice action from management and disposal is problematic. The advancementof vested interests and the communication barrier creates a problem in coordinating efforts. Thisis an ingredient for disastrous practices of handling assets.
VII. CONCLUSSION
The objective of the Asset Recovery Centre of the Indonesian AGO is to cut or to keepaway the criminals from access to their assets. This measure is expected to reduce the number offinancial crimes seeking wealth or assets. In the end, the Asset Recovery Centre of theIndonesian AGO will do its part to be an instrument to hamper wealth- or asset-oriented crimes,
especially corruption, by recovering proceeds of crime, and it might be one of the solutions for
returning the country’s lost assets.

- 87 -CURRENT CHALLENGES AND BEST PRACTICES IN THE INVESTIGATION,PROSECUTION AND PREVENTION OF CORRUPTION CASES — SHARING
EXPERIENCES AND LEARNING FROM ACTUAL CASES IN LAO PDR
Sibounzom BOUNLOM *I.

PREVENTION AND COUNTERING OF CORRUPTION

Prevention of corruption refers to protecting against corruption and preventing
corruption from occurring in State organizations, political organizations, and socialorganizations by education campaigns, declaration of assets, inspection, implementation ofpolicies, and others. Countering of corruption refers to eliminating, repressing, andsuppressing all wrongful acts constituting corruption by inspection, education,
implementation of discipline, and punishment as provided by the laws.
A.

Principles on the Prevention of Corruption
Prevention of corruption shall be based on the following principles:• The main focus shall be on preventing corruption, while countering corruption shallbe regarded as an important focus;• Inspection of corruption shall be conducted immediately, strictly, independently,
objectively, and accurately;• If there is an offence, the matter should be dealt with strictly, immediately, and withjustice;• To ensure that there is no interference, obstruction, or threat from any individual ororganization; Responsibility of Counter-Corruption Organization. The countercorruption organization shall perform its duties objectively, with transparency, andcorrectly according to its scope of rights and duties and according to the proceduresas stipulated in the laws, including being highly accountable for the conduct of its
responsibilities under the laws and being subject to inspection by the National
Assembly.

B.

Obligations
Relating to the prevention and countering of corruption, party organizations, stateorganizations, the Lao Front for National Construction, mass organizations, socialorganizations, mass media, and citizens all have the obligation to participate in the prevention
and countering of corruption by the timely provision of cooperation, facilitation, information,and evidence to concerned organizations which have the rights and duties to deal withcorruption.

*

Prosecutor, Director of Criminal Inspection Division, Lao PDR.

- 88 -C.

Prevention of Corruption
Government Leaders as Role Models: staff at all levels, especially the leaders, shall act
as role models in the strict implementation of the laws and regulations, and shall lead inhaving transparent lifestyles and shall have no corruption.
Duties of the State in the prevention of corruption, the State has the following duties:
1. To educate the public to respect and strictly comply with the laws and regulations;
2. To improve governance mechanisms to ensure that they are good, effective andtransparent;
3. To define and implement policies toward government staff at each level clearly andto ensure proper living conditions;4. To strictly and immediately impose discipline and punishment on offenders charged
with corruption;
5. To promote the public, mass media, and social organizations to participate in theprevention and countering of corruption according to regulations.
II.

LEGAL FRAMEWORKIn Lao PDR, the Law on Anti-Corruption, the Penal Code and the Law on Criminal
Procedure are the key pieces of anti-corruption legislation.
A.

Acts that Constitute Corruption
Acts that constitute corruption can take the following forms:• Embezzlement of State property or collective property;• Swindling of State property or collective property;• Taking bribes;• Abuse of position, power, and duty to take State property, collective property or
individual property;• Abuse of State property or collective property;• Excessive use of position, power, and duty to take State property, collective property
or individual property;• Cheating or falsification relating to technical construction standards, designs,
calculations, and others; readers may wish to refer to the Business Law for more
information on State-Deception in bidding or concessions;• Forging documents or using forged documents;• Disclosure of State secrets for personal benefit;- 89 -

• Holding back or delaying documents.
B.
1.

Conduct of Inspections Relating to Corruption
Causes for Conducting an Inspection
The causes that result in the conduct of an inspection by the counter-corruption
organization are as follows:• When firm information and evidence that an act constituting corruption has beencommitted are found;• When there is a notification, submission, proposal, report, or claim regarding
corruption;• When any government staff, or husband, wife or child under the charge of suchgovernment staff, appears to be unusually rich.
2.

Inspection Procedure
The counter-corruption organization shall conduct inspections according to thefollowing procedure:
1. Examine the notification, submission, proposal, report, or claim and, if deemednecessary, collect data in the field;
2. Prepare and establish a plan for the actual inspection in coordination with concerned
sectors and local administrations;
3. Inspect all documents and assets of concerned individuals or organizations,especially to inspect the financial situation and accounts, revenue, and expenses, andthe use of grants and loans;
4. Call and invite the representative of the organization or the individual concerned tocome to give explanations and clarification;
5. Summarize, evaluate, and decide on the result of the inspection.

C.
1.

Measures for Countering and Dealing with Corruption
Measures for Dealing with Corruption
The use of measures to counter the corruption of any government staff who commits anoffence relating to corruption is based on the severity of the offence. If it is a minor offence,
there will be education measures and imposition of disciplinary measures; if it is a serious
offence, it will be subject to legal proceedings as provided under the laws.
2.

Education Measures
If, through the inspection, a minor offence is found, and the offender honestly reports
the offence, and admits to the concerned organization that he committed the offence andreturns all assets that he took, he will be subject to education measures and a warning.

- 90 -

D.

Imposition of Disciplinary Measures
Any government staff who commits an offence relating to corruption which is notserious, but who does not willingly report or who escapes from the offence, shall be subject
to the following disciplinary measures:• be criticized, and be admonished by recording a note in his biographical file;• be suspended from receiving any promotion, raise in salary level, or reward;• be removed from his position or transferred to another position which has a lower
title than his former position;• be dismissed from office without receiving any policy. The person who is subject tothe imposition of disciplinary measures must return completely all of the property
that was unlawfully taken.

E.

Case Proceedings
If, after the inspection and investigation, there appears to be solid information andevidence, the counter-corruption organization shall make a summary of the inspection result,complete the file of the case and then send it to the public prosecutor to consider bringing aprosecution in court.
F.

Punishment
Any leader, administrative staff, technical staff, staff of a State enterprise, civil servant,soldier, or police officer, including any chief of village or person who is officially authorized
to have power, who breaches his duty by abusing his status, position or power, or byembezzling, swindling, receiving bribes, misappropriating State or collective property, or
abusing his power to benefit himself or his family, relatives, friends and associates causing
damage to the interest of the State or collectives or to the rights and benefits of citizens shallbe punished by:
1. Imprisonment from one year to two years and shall be fined one percent (1%) of thevalue of the damage, where such damage is from 1,000,000 Kip to 20,000,000 Kip;
2. Imprisonment from more than two years to four years and shall be fined one percent(1%) of the damage, where such damage is from more than 20,000,000 Kip to
50,000,000 Kip;
3. Imprisonment from more than four years to six years and shall be fined one percent(1%) of the damage, where such damage is from more than 50,000,000 Kip to
100,000,000 Kip;
4. Imprisonment from more than six years to eight years and shall be fined one percent(1%) of the damage, where such damage is from more than 100,000,000 Kip to
300,000,000 Kip;
5. Imprisonment from more than eight years to ten years and shall be fined one percent(1%) of the damage, where such damage is from more than 300,000,000 Kip to
500,000,000 Kip;

- 91 -

6. Imprisonment from more than ten years to twelve years and shall be fined one percent(1%) of the damage, where such damage is from more than 500,000,000 Kip to600,000,000 Kip;
7. Imprisonment from more than twelve years to fourteen years and shall be fined one
percent (1%) of the damage, where such damage is from more than 600,000,000 Kip
to 700,000,000 Kip;
8. Imprisonment from more than fourteen years to sixteen years and shall be fined one
percent (1%) of the damage, where such damage is from more than 700,000,000 Kip
to 800,000,000 Kip;
9. Imprisonment from more than sixteen years to eighteen years and shall be fined one
percent (1%) of the damage, where such damage is from more than 800,000,000 Kip
to 1,000,000,000 Kip;
10. Imprisonment from more than eighteen years to twenty years and shall be fined one
percent (1%) of the damage, where such damage is from more than 1,000,000,000 Kip
to 2,000,000,000 Kip;
11. Life imprisonment and shall be fined one percent (1%) of the damage, where suchdamage is from more than 2,000,000,000 Kip.
The assets and interests derived from corruption shall be seized by the State or returnedto the organization, individual or legal entity who is the rightful owner of such assets.
III. COUNTER-CORRUPTION ORGANIZATIONThe counter-corruption organization is a State organization that has the role toprevent and counter corruption within the country by assigning to the State Inspection
Authority at the central level and state inspection authorities at the provincial level to
implement this task. The counter-corruption organization is an investigation organization andperforms its duties independently.
A.

Organizational Structure
The organizational structure of the counter-corruption organization consists of:• Counter-corruption organization at the central level;• Counter-corruption organization at the provincial level.

B.

Rights and Duties of the Counter-Corruption Organization at the Central Level
The counter-corruption organization at the central level has the following main rights
and duties:
1. To study policies, directives, plans, laws, regulations, and measures relating to theprevention and countering of corruption, and thereafter to submit to the government
for consideration;- 92 -

2. To direct and inspect the implementation of activities relating to the prevention andcountering of corruption within the entire country;
3. To conduct activities to prevent and counter corruption among government staff
within the entire country, especially government staff under the supervision andmanagement of the central level and other government staff of organizations at thecentral level;
4. To conduct investigations into corruption by using measures that are defined in thelaw on criminal procedure;
5. During the period when the inspection has yet to be completed, to propose thetemporary suspension of a person under inspection from his position or duty or to
propose that a person under inspection not be removed, appointed, or have his job
swapped;6. To liaise, coordinate, and cooperate with concerned sectors at the central and local
levels to perform their rights and duties;
7. To consider, decide, and use measures against the inspected person as provided in
the laws;
8. To summarize the results of activities for the prevention and countering ofcorruption, and then to periodically report to the Prime Minister and the National
Assembly Standing Committee;
9. To exercise such other rights and perform such other duties as provided by laws andregulations.
IV.

PRESENT ACTUAL CORRUPTION CASE

According to case No 008, February 7, 2014:
1.

Plaintiff: Huaphan Province prosecutor

2.

Defendants: Mr Silon, Head of Audit; Mr Niyom, Finance Officer; Mr Somphon,
Head of Finance Office of Sumneua District

3.

Arrested: 13 June 2011

4.

Accusation: Corruption

5.

Facts: Mr Silon agreed with his financial officers, such as Mr Niyom, Miss
Manias, Miss Vonchai, and Mr Sommitta, to conspire with financial officers of
the Education Department, such as Mr Khampan, Mr Vangthor and Mr
Khamkhao. It was agreed that they would increase the amount of money
budgeted to cover salaries of the education officers. Mr Silon signed to pay
money; then Mr Khampan withdrew money from the bank, and divided thatmoney for everyone in the group. In addition, they increased the amount of- 93 -

money in the budget for many in the Department of Huaphan Province. From
2005–2010, Mr Silon embezzled 1,010.000.000 kip (130,000 USD), Mr Niyom
embezzled 2,432,320,276 kip (304,000 USD), Miss Malisa embezzled
412,064,500 kip (52,000 USD), Mr Bounthon embezzled 568,000,000 kip(71,000 USD), Mr Khampan embezzled 2,645,219,321 kip (330,000 USD), Mr
Khamkhao embezzled 905,605,013 kip (110,600 USD), Mr Vangthor embezzled
869,605,013 kip (108,000 USD), Mr Khampat embezzled 222,005,500 kip(30,000 USD), and Mr Somphon embezzled 689,847,460 kip (90,000 USD).
6.

Court sentence: Mr Silon, Mr Niyom, Mr Khampan, Mr Bounthon, Miss Malisa,
Mr Khamkhao, Mr Somphon, Mr Vangthor and Mr lhamphet were found guilty
of corruption.

7. Punishment:
 Mr Silon: imprisoned 8 years and 1 month, fine 11,000,000 kip (1,600 USD),
restitution











V.

Mr Niyom: life imprisonment, fine 24,000,000. kip (3,000 USD), restitution
Miss Malisa: imprisoned 8 years and 1 month, fine 4,100,000 kip (512 USD),
restitution
Mr Bounthon: imprisoned 10 years and 1 month, fine 5,800,000 kip (750
USD), restitution
Mr Khampan: life imprisonment, fine 26,500.000 kip, restitution
Mr Vangthor: imprisoned 16 years and 1 month, fine 8,700,000 kip,
restitution
Mr Khampat: imprisoned 6 years and 1 month, fine 2,200,000 kip, restitution
Mr Somphon: imprisoned 12 years and 1 month, fine 6,800,000 kip,
restitution

MUTUAL LEGAL ASSISTANCE AND RECOVERY OF PROCEEDS OF
CORRUPTION

A.

International Relations and Cooperation
The State conducts relations and cooperates with foreign countries and internationalorganizations on the prevention and countering of corruption, based on the laws andregulations of the Lao PDR in compliance with international conventions and agreements that
the Lao PDR has signed and is a party to.
B.

Principle of International Cooperation in Criminal ProceedingsInternational cooperation in criminal proceedings between the competent organization
conducting criminal proceedings in the Lao PDR and competent organs of foreign countries
shall comply with principles of respect for the independence, territorial sovereignty of the- 94 -

States, non-interference in domestic affairs, equality and mutual benefit, and be consistent
with the Constitution of Lao PDR and the fundamental principles of international law.
C.

International Cooperation in Criminal ProceedingsInternational cooperation in criminal proceedings must be carried out in compliancewith agreements that the Lao PDR has signed with foreign countries or international
conventions that it has entered into and in accordance with the laws of the Lao PDR. In theevent that the Lao PDR has not yet signed or not yet entered into international conventions
relating to criminal proceedings, such cooperation shall be carried out on the basis ofprinciples of mutual cooperation, but shall not be in conflict with the laws of the Lao PDR.
D.

Implementation of Judicial AssistanceIn the provision of judicial assistance, the competent organization conducting criminal
proceedings in the Lao PDR shall comply with the agreements that the Lao PDR has signedwith foreign countries or international conventions that the Lao PDR is a party to and shallcomply with this law. Provision of judicial assistance may have the objective of extradition,
or exchange of prisoners, or seizure or sequestration of assets of an accused person or
defendant, or enforcement of judgement, or cooperation in combating of cross-border crimeand others.

- 95 -CURRENT CHALLENGES AND BEST PRACTICES IN THE
INVESTIGATION, PROSECUTION AND PREVENTION OF
CORRUPTION CASES—SHARING EXPERIENCES AND LEARNINGFROM ACTUAL CASES
Phongsavanh PHOMMAHAXAY *I.

INTRODUCTION

Corruption is a serious crime in society. It occurs at all levels of society—local andnational governments, civil society, large and small businesses, and in the public and private
sectors. Because of its large scope, corruption seriously affects the public trust, the process ofa country's development and the state’s stability. Moreover, corruption is also a major cause
and a result of poverty, and it affects the poorest people. For these reasons, the Lao
Government has been promoting the fight against corruption and has started to develop anticorruption legislation. The guidelines, policies and laws of Lao express a strong
determination to prevent and eliminate corruption. In 2005, the National Assembly had
adopted the first anti-corruption law. The law defines principles, rules, and measures for theprevention and countering of corruption. The purpose of this law is to secure the property of
the State, society, and the rights and interests of the citizens. In addition, the law also
subjected offenders to legal proceedings and protect those who are innocent, with the aims ofstrengthening State organizations, increasing transparency, strengthening the ability toinspect at all times. Although the Anti-Corruption Law was amended in 2012, the process of
implementation has been slow due to the strength and determination of those involved incorruption. Some corruption cases are postponed. Nevertheless, the government has tried to
improve the criminal justice system, its anti-corruption agency and the laws to combat
corruption.
II.

THE ORGANIZATION OF THE GOVERNMENT INSPECTION AND ANTICORRUPTION AUTHORITY

The Government Inspection and Anti-Corruption Authority is organized into various
agencies and services, as follows:1). Government Inspection and Anti-corruption Authority;
2). Department of Ministerial and Organizational Inspection
3). Government Inspection Service at the provincial level, and the Vientiane Capital
Inspection Service;4). Inspection Offices of Districts and Municipalities and Inspection Sections under
the Provincial Service and Vientiane Capital*

Deputy of Investigation Division, Investigation Corruption Department, Government Inspection Authority,
Laos.

- 96 -

The roles, duties and rights of the Government Inspection and Anti-Corruption Authority
at different levels are identified in the law concerning anti-corruption, the law on government
inspection, the law on resolution of complaints and other related laws.
A.

Responsibility of Counter-Corruption Organization
The counter-corruption organization is a State organization that has the role to preventand counter corruption within the country by assigning to the State Inspection Authority at thecentral level and state inspection authorities at the provincial level to implement this task. The
counter-corruption organization is an investigation organization and performs its duties
independently.
B.

Establishment of the Anti-Corruption Investigation Department
Like other countries in the world, Lao PDR is experiencing the problem of some negative
activities within its bureaucracy. The government is not immune to corruption, and, in
accordance with amended anti-corruption law, the prime minister allowed the creation of theAnti-Corruption Investigation Department on 13 July 2015. This Department has the role toinvestigate government staff involved in corruption cases, especially government staff under
the supervision and management of the central level of government, as well as othergovernment staff of the organization at the central level.
III. MEASURES FOR INVESTIGATION OF CORRUPTION
The law on anti-corruption clearly regulates measures for corruption investigations.
However, the implementation of this law is not effective. The coordination between theinvestigation organization of anti-corruption officers and other investigative agencies at thecentral and local levels is not strong. Only a few small cases of corruption reach the court;
many cases are solved by using disciplinary measures.
The following investigative measures are stipulated in the anti-corruption law, andsome are included in the criminal procedure law:•

Chapter 5. To investigate the corruption prosecution•

Causes for opening corruption investigations, article 34 (Law on Anti-corruption)•

Investigation procedures, article 35 (Law on Anti-corruption)•

Ordering an investigation, article 36 (Law on Anti-corruption)•

Conducting an investigation, article 37 (Law on Anti-corruption)•

Timeline for conducting an investigation, article 38 (Law on Anti-corruption)•

Conducting an investigation, chapter 5 (Law on Criminal Procedure)

Most of these above-mentioned measures are very important to combat and investigate
corruption. Also important for investigation of corruption cases is coordination between theinvestigation organization of anti-corruption officers and other investigative agencies forexchange information related to corruption cases. Besides that, without the participation and- 97 -

support of the public and other state organizations, investigators would not be successful atconducting investigations and gathering information on corruption cases.
IV. CORRUPTION INSPECTION, PROSECUTION OF CORRUPTION IN THE
PRESENT, INVESTIGATION OF CORRUPTION CASES AND PROBLEMSENCOUNTERED IN INVESTIGATION
A.

Inspection of Corruption Cases
The Government Inspection and Anti-corruption Authority at all levels conducts regularmonitoring of, and requests recommendations from the citizens about the performance of,government officials, civil servants and other government employees in different sectors.
Previously, the Government Inspection and Anti-corruption Authority at the national level
collaborated with the Governmental Inspection and Anti-corruption Authority of concerned
ministries/organizations and some Inspection Committees at the local level to inspect targets asfollows:

An investigation was conducted on timber exploitation and business in Savannakhet
province. Some government officers and their private businessmen accomplices who have
exploited 1400 m3 of prohibited timber (Nile wood) were identified. 11 public officers were
fired. It was discovered that an officer of the National Treasury in Champassak and his
accessory embezzled State property in the excess of LAK 5.1 billion, and these persons havebeen prosecuted and convicted through the justice system. In Khammouane province, adifference of 12 billion kips of a construction project’s value was identified after inspection ofa municipal road construction project.
From 2012 to 2013, the national and local authorities inspected 104 targets and identified
damages costing more than 80 billion kips; some of these damages were recovered. There were
472 wrongdoers, 178 embezzlements, 62 frauds, 50 briberies, 88 abuses of position, 22 casesof exceeding authority, and 64 counterfeiting cases. These wrongdoers have been prosecuted
under the regulations and laws. Thus, these numbers show that anti-corruption measures arebeing implemented in Lao P.D.R.
B.

The Prosecution of Corruption at Present
The authorities at various levels have focused on improving organizational structure,formulating job descriptions, implementing laws and regulations and have tried to address
societal dissatisfaction within their responsibilities, but there are still corrupt practices. So theprime minister allowed the creation of the Anti-Corruption Investigation Department on 13
July 2015, and we found the following problems in some organizations and ministries, as statedbelow:
1.
There are officials of some ministries, organizations and local governments who violate
orders, laws and misuse the law for their own benefit. There is corruption in the fields ofinfrastructure development, tax collection, budget management, natural resource exploitationand land management. The utility of the funds and budgets is not effective and is therefore
wasted. Many sectors have violated the financial rules, made projects outside of the approved
plan, and have assumed debts for which it is not clear how they will be paid. There aresituations where officials do not fully collect state income and where they hand over theincome not in full performance of their role, and where they do not hand over the full amountof income they have received.

- 98 -

2.
Some ministries and organizations have not fully performed their roles andresponsibilities, such as not fully concentrating on policy making. Some projects are noteffectively implemented and are of sub-standard quality.
C.

Investigating Corruption Cases
In Laos, corruption happens in many areas and at many levels; it occurs on a widespreadbasis, which means that it happens mainly in the economic sector such as in the Ministry ofPlanning, the Ministry of Finance and other agencies of the state at the central and provincial
levels. In particular, government staff have engaged in the embezzlement of state property orcollective property, the swindling of state property or collective property, taking bribes, abuseof position, power, and duty to take state property, collective property or individual property.
Through inspection, it was found that more than one trillion Lao kip and one million U.S.
dollars have been misappropriated during 2015. In one province in northern Laos, there were 9
education staff who cooperated to misappropriate money from the state budget. According to
the inspecting authority, the staff members were investigated in 2015, and the story, described
below, is a valuable example of the investigation and prosecution of corruption cases in
Huaphanh province.
Mr. A confessed to corruption, and the facts related to the crime in Huaphanh province
were confirmed. From 2005-2007, Mr. A was employed as a member of the technical staff ofHuaphnah province and was working for the Division of Finance on the budget for theprovince. Mr. A conspired with Mr. B, and Mr. C to increase the figures of the salary budgeted
for the education staff in the province and in rural areas. The changed budget was given to Mr.
B for approval. When the proposed budget was approved, they received the excess money andshared it among themselves, but there was some disagreement as to how the money should be
divided. Later, from 2008 to 2009, they involved Mr. D, Chief of the Inspection, Division of
Finance, in Huaphanh province and Miss C, Deputy of Property, Division of Finance, in
Huaphanh province.
Mr. A and his gang told the problem to Mr. D and Miss C to protect their scheme frombeing discovered. Thus, they continued to receive excess money from the budget, and they
continued to share the money. Later, from 2009 to 2010, Mr. A continued the scheme, andfrom 2005 to 2010, the group misappropriated 2.4 billion Lao kip.
When he was detained during the procedure, Mr. A’s family returned money andmaterials to the state amounting to 2.1 million, but 2.2 billion kip remains unaccounted for.
Now the Huaphanh court has sentenced him to be punished in accordance with the anticorruption law.
In the area of province-level and rural construction investment, the majority of
construction projects result in losses because of corruption and breaking the law. Violations
occur in most stages, from project planning, design, cost estimates to bidding, consulting,supervision, construction, testing and finalization of the project. Those involved often fail tocomply with procedures of province-level and rural construction investment; commit fraud due
to lack of transparency in the bidding; and use poor quality materials and equipment in theconstruction process to reduce costs. For instance, among 26 infrastructure projects in
Oudomxay, we found that the government staff of the province and upper-level staff of the- 99 -

Ministry of Finance conspired together to commit fraud by document forgery to receive moneyfrom the state budget. Now we are conducting investigations of 100 targets.
In addition to the above areas, corruption is quite common in the relationships between
state agencies and the relationship between public officials, enterprises and individuals, such as
traffic police, education, the health sector, and tax officials.
D.
1.

Problems Experienced during Investigations
Difficulties in Identifying Corrupt Acts
Corruption is the act of an official who opportunistically uses his position, powers, andduties to embezzle, swindle or receive bribes, give bribes or any other act which is committed
to benefit himself or his family, relatives, friends, clan, or group and causes damage to theinterests of the State and society or to the rights and legitimate interests of citizens.
Furthermore, corruption is a white–collar crime, along with fraud, bribery, insider trading,copyright infringement, money laundering and forgery.
2.

Difficulties in Investigation of Corruption Cases
Firstly, there are many problems in collecting and preserving evidence in corruption
cases because most of those cases concern persons in high positions of power and other highlevel people in the government. They abused their positions and powers to commit and conceal
their crimes. Because they have extensive personal networks on various levels, when theyreceive information that an investigation is being started, they will destroy the information andevidence of corruption. Secondly, another difficulty in investigation and prosecution ofcorruption cases is that many cases involve government staff at the central level or at theprovincial level by those who have positions of power. Also, many employees who investigate
corruption have little experience in the corruption proceedings. Finally, mechanisms for
coordination between the investigation organization of anti-corruption officers and otherinvestigative agencies is not strong.

- 100 -

MUTUAL LEGAL ASSISTANCE AND RECOVERY OF PROCEEDS OF
CORRUPTION
Dato’Abdul Razak bin Musa *Dato’ Umar Saifuddin bin Jaafar †I.

MLA IN ACTION: PROSECUTION’S CHALLENGES—THE “PERWAJA CASE”:
THEN & NOW

Crimes today are transnational in nature. Criminals now are not limited by geographical or
distance factors. Criminals also use time and space to cover their tracks, and to hide or movetheir ill-gotten gains to another jurisdiction. It is becoming more difficult for the authorities tofind admissible evidence and witnesses obtained from foreign jurisdictions, or to trace theproceeds and the instruments used during the commission of those crimes. Thus, mutual legal
assistance (“MLA”) is an important tool or mechanism to obtain evidence from foreign
jurisdictions. However, having a law in place to cater for MLA alone is not sufficient to ensure
success in getting foreign evidence to be used in Malaysian courts, as will be demonstrated
below in the case of Public Prosecutor v. Tan Sri Eric Chia Eng Hock, commonly known as the
Perwaja case.
The Perwaja case bears a huge significance in the context of MLA in Malaysia as it is thebest case to showcase the use of MACMA extensively and the challenges faced by theprosecution during the trial to admit the evidence obtained from the relevant countries.
A.

Brief Facts of the Perwaja CaseOn 4 November 1993, a Technical Assistance Agreement (“TAA”) was entered into
between NKK Corporation, Japan and Perwaja Rolling Mill and Development Sdn. Bhd.,
Malaysia (“Perwaja”). The assistance was to be provided free of charge. On 18 February 1994,
Tan Sri Eric Chia Eng Hock (“Eric Chia”), the Managing Director of Perwaja authorized thepayment of 2,891,580,000 Yen (approximately RM76,433,134.14) by Perwaja to NKK,
purportedly for the assistance to be provided under the TAA. Payments were made as follows:

*
†

(i)

Firstly, the above payment was made into the account of Frilsham Enterprise
Incorporated (“Frilsham”) with the American Express Bank Ltd. (“Amex”) in
Hong Kong;(ii)

On 25 February 1994, the money was transferred into the account of Waterfront
International Ltd (“Waterfront”) at the same bank;

Deputy Head of Prosecution (Policy), Prosecution Division, Attorney-General’s Chambers Malaysia.
Senior Federal Counsel, Legal & Prosecution Division, Malaysian Anti-Corruption Commission.

- 101 -

(iii)

On 1 March 1994, a sum of 2,486,260,000 Yen (about RM65,700,000) wastransferred into the account of Borneo Enterprises Inc. (“Borneo”) at BanqueIndosuez (now Calyon Corporate and Investment Bank) in Geneva, Switzerland;(iv)

Subsequently, a sum of 2,294,600,000 Yen (about RM60,650,000) wastransferred to the account of Sitar Investment Ltd. with the Union Bank of
Switzerland, Zurich;(v)

The said amount was then transferred to the account of Lotus Development Inc. at
the same bank;(vi)

Both the accounts of Sitar Investment Ltd. and Lotus Development Inc. at theUnion Bank of Switzerland, Zurich belonged to an immediate member of Eric
Chia’s family.

The Executive Director of NKK Japan denied receiving any payment for the technicalassistance provided and stated that the technical assistance provided by NKK to Perwaja was freeof charge. On 10 February 2004, about 10 years after the incident, Eric Chia was charged under
section 409 of the Penal Code 1 for the offence of criminal breach of trust. 2
B.

The Perwaja Case at the Sessions Court
During the trial, the prosecution sought to adduce evidence recorded earlier by aMagistrate in Hong Kong between June and July 2005 pursuant to a request made by the
Attorney-General of Malaysia under subsection 8(1) of the Mutual Assistance in Criminal
Matters Act 2002 (“MACMA”). 3 The evidence consisted essentially of the transcripts of theevidence of six witnesses and of documents produced by one of the witnesses. In the taking of
the evidence, the Attorney-General himself conducted the examination-in-chief of the witnesses
and the defence counsel from Malaysia was present to conduct cross-examination of thewitnesses. At that point in time (2005), which was before the insertion of the new Chapter VA
into the Evidence Act 1950 (via Act A1424 w.e.f. 1.6.2012), the admissibility of that evidence
was governed solely by subsection 8(3) of MACMA, 4 which provided that the evidence may be

1

Act 574.
S.409: Criminal breach of trust by public servant or agent: “Whoever, being in any manner entrusted with property,
or with any dominion over property, in his capacity of a public servant or an agent, commits criminal breach of trust
in respect of that property, shall be punished with imprisonment for a term which shall not be less than two years
and not more than twenty years and with whipping, and shall also be liable to fine.” Under s.402A Act 574, an“agent” includes a company director. A criminal breach of trust offence is also a “prescribed offence” under section
3 of the Malaysian Anti-Corruption Commission Act 2009 [Act 694], which means it is an offence that can beinvestigated by MACC and charged if necessary, despite it not being a corruption offence. Act 694 took effect on
1.1.2009. Previously, corruption matters were governed by the Anti-Corruption Act 1997 [Act 575]. Subsection 7(3)of Act 575 provided that an officer of the Anti-Corruption Agency may get an appropriate direction from the Public
Prosecutor to investigate etc. if a non-corruption offence is disclosed while an investigation is made on a corruptioncase.
3
Act 621.
4
Subsections 8(1) and (2) of MACMA provide, inter alia, that the Attorney General may request for evidence orthing in a foreign State to be taken and sent to him if he is satisfied that there are reasonable grounds for believing
such evidence or thing are relevant to a criminal proceedings or criminal matter in Malaysia. Subsection 8(3)2- 102 -

admitted subject to the provisions of the Evidence Act 1950 (“EA”) and the Criminal Procedure
Code (“CPC”). 5 There was no specific reference to evidence by way of MLA in EA and CPC.
After a trial that took about three years, on 26 June 2007 the Sessions Court held that theprosecution had failed to prove a prima facie case and accordingly acquitted Eric Chia on the
grounds that the transcripts of the evidence of witnesses obtained by way of MLA from Hong
Kong (including Japan and Switzerland) were inadmissible due to authentication issues under
MACMA, and because of non-compliance with section 33 of the EA. 6 The prosecution appealed
against the acquittal to the High Court.
C.

The Perwaja Case at the High Court
At the High Court, the defence counsel argued that the qualification “subject to theprovisions of the Evidence Act 1950” as appears in subsection 8(3) of MACMA 2002 must meanthat the admissibility of the Hong Kong evidence must be subject to the provisions of section 33
of the EA. 7 The defence counsel thus argued that the situation in this case was actually reversedin that in obtaining the Hong Kong evidence, much money and time was unnecessarily spent andthat the prosecution had not even attempted to procure those witnesses in Hong Kong to testify in
Malaysia, which the Attorney General could request under section 9 of MACMA. 8 Justice
Abdull Hamid Embong, however, disagreed with this line of argument and ruled that theevidence obtained pursuant to a request made under subsection 8(1) of MACMA is not subject tosection 33 of the EA and thus it is not required to pass the test and qualifications laid down insection 33 of the EA.
The Judge further stated that MACMA is a specific piece of legislation to facilitate mutual
assistance in criminal matters and thus should not be hampered by the requirements of the EA,
notwithstanding its mention in sub-section 8(3). He went further by adding that to subject its
operation to the technical requirements as found under section 33 of the Evidence Act would
render nugatory or redundant Parliament’s intention of a speedy and convenient method ofevidence taken overseas. Thus, the High Court found the Hong Kong evidence to be admissible.
Further, the High Court said it is unfortunate that the Malaysian EA was not consequently
amended to cater for evidence taken under MACMA as was done to section 77F of the Hong
Kong Evidence Ordinance, which provides that evidence obtained pursuant to a similar request
in respect of any criminal proceedings, shall on its production without further proof be admitted
provides that any evidence or thing received by the Attorney General pursuant to an MLA request may be admitted
in such proceedings subject to the provisions of EA and CPC.
5
Act 56 & Act 593, respectively.
6
S.33 EA provides, among others, that evidence given by a witness in a judicial proceeding, or before any person
authorized by law to take it, is relevant for the purpose of proving in a subsequent judicial proceeding, or in a laterstage of the same judicial proceeding, the truth of the facts which it states, when the witness is dead or cannot befound or is incapable of giving evidence, or is kept out of the way by the adverse party, or if his presence cannot be
obtained without an amount of delay or expense which under the circumstances of the case the court considers
unreasonable.
7
Subsection 8(3) MACMA: “Any evidence or thing, or photograph or copy of a thing, received by the Attorney
General pursuant to a request under subsection (1) or (2) may, subject to the provisions of the Evidence Act 1950
[Act 56] and the Criminal Procedure Code [Act 593], be admitted as evidence at any criminal proceedings to which
the request relates.”
8
Section 9 MACMA provides that the Attorney General may request a foreign country to assist in arranging aperson in that foreign country to testify in Malaysia.

- 103 -

in those criminal proceedings as prima facie evidence of any fact stated in the evidence. The
appeal by the prosecution was thus allowed. Eric Chia appealed to the Court of Appeal.
D.

The Perwaja Case at the Court of Appeal
The Court of Appeal, in a 2 – 1 majority decision, agreed with the prosecution anddismissed Eric Chia’s appeal, holding that section 8 of MACMA provides a scheme for the
deliberate gathering of testimonies of witnesses in a foreign country to be used specifically in aparticular criminal proceeding in Malaysia. Thus, section 8 is not within the contemplation ofsection 33 of the EA and the Hong Kong evidence was admissible. Dissatisfied, Eric Chia
appealed further to the Federal Court, the highest court in Malaysia. 9
E.

The Perwaja Case at the Federal Court
The appeal initially began with a preliminary objection by the prosecution that the appeal
was incompetent, as an appeal from a decision of a Sessions Court, the trial court in the Perwaja
case could only go so far as the Court of Appeal. However, the Federal Court overruled thisobjection on the grounds that the inherent powers of the Federal Court under Rule 137 of theFederal Court Rules 1995 10 can be invoked to prevent an injustice or to prevent an abuse of theprocess of any court where there is no other available remedy.
Having dismissed this preliminary objection, on 31 January 2007, the Federal Court, by aunanimous decision, went on to affirm the decision of the trial court, i.e. the Sessions Court, andheld that the evidence from Hong Kong was inadmissible. 11
F.

Amendment to the Evidence Act 1950
After the Perwaja case, the EA was amended to include a new Chapter VA (effective date
1.6.2012 via Act A1424), containing sections 90D, 90E and 90F. This amendment caters
specifically for evidence obtained by way of MLA.
The provisions of sections 90D, 90E and 90F are reproduced below as follows:“CHAPTER VA
ADMISSIBILITY OF EVIDENCE OBTAINED UNDER MUTUAL ASSISTANCE IN
CRIMINAL MATTERS REQUESTS
Application of Chapter VA
90D. Notwithstanding any other provision in this Act, this Chapter shall apply for the
purpose of determining the admissibility of evidence obtained pursuant to a request madeunder the Mutual Assistance in Criminal Matters Act 2002 [Act 621].
Admissibility in criminal matter of evidence obtained pursuant to requests for mutual
assistance in criminal matters

9

Reported in Malaysian Current Law Journal (2006) 2 CLJ 544.
Rule 137: “For the removal of doubts it is hereby declared that nothing in these Rules shall be deemed to limit oraffect the inherent powers of the Court to hear any application or to make any order as may be necessary to prevent
injustice or to prevent an abuse of the process of the Court.”
11
Reported in Malaysian Current Law Journal (2007) 1 CLJ 565.
10

- 104 -

90E. (1) Subject to subsections (2) to (9), any testimony, statement or deposition,
together with any document or thing exhibited or annexed to such statement or deposition,that is received by the Attorney General pursuant to a request made under the Mutual
Assistance in Criminal Matters Act 2002 in respect of the criminal matter, shall on its
production be admitted in those criminal proceedings as evidence without further proof ofany fact stated in the testimony, statement or deposition and in the document, if any,
exhibited or annexed to such statement or deposition.
(2) The testimony, statement or deposition shall be taken —(a)on oath or affirmation;(b)under an obligation to tell the truth imposed, whether expressly or by
implication, by or under a law of the foreign country concerned; or(c)under such caution or admonition as would be accepted, by courts in theforeign country concerned, for the purposes of giving testimony in proceedings
before those courts.
(3) The testimony, statement or deposition shall—(a)be signed or certified by a judge, magistrate or officer in or of the foreigncountry to which the request was made; and(b) bear an official or public seal of—(i)the foreign country; or(ii)

a Minister of State, or a department or officer of the government of
the foreign country.

(4)
A certificate by the judge, magistrate or officer referred to in subsection (3) shall,
without further proof, be admitted in the proceedings as conclusive evidence of the facts
contained in the certificate.
(5)
All courts in Malaysia shall take judicial notice of the official or public sealreferred to in subsection (3).
(6)
The testimony taken under subsection (2) may be reduced to writing or berecorded on a tape, disk or other device from which sounds or images are capable ofbeing reproduced or may be taken by means of technology that permits the virtualpresence of the person in Malaysia.
(7)
Where the testimony has been reduced to writing or recorded on a tape, disk orother device from which sounds or images are capable of being reproduced, the writing,tape, disk or other device shall be authenticated as provided under subsection (3).

- 105 -

(8)Where the testimony has been made by means of video or other means which
permits the virtual presence of the person in Malaysia, that testimony shall be deemed tohave been given in Malaysia.
(9)
For the purposes of this Chapter, the testimony, statement or deposition neednot—(a) be in the form of an affidavit; or(b) constitute a transcript of a proceeding in a foreign court.
(10) For the purpose of this Chapter, where the prosecutor seeks to adduce any
testimony, statement, deposition, document or thing specified in subsection (1) as
evidence in the criminal matter, the court shall not give any direction that such evidenceor any part thereof is not to be adduced.
(11) In this Chapter, “criminal matter” has the meaning assigned to it under the Mutual
Assistance in Criminal Matters Act 2002.
Certificate relating to foreign evidence
90F. A certificate by the Attorney General or by a person authorized by the Attorney
General to make such a certificate certifying that any testimony, statement or deposition
to which such certificate is attached, together with any document or thing exhibited orannexed thereto, if any, has been received by the Attorney General pursuant to a request
made under the Mutual Assistance in Criminal Matters Act 2002 in respect of any
criminal matter referred to in the certificate, shall on its production without further proof
be admitted in the proceeding as conclusive evidence of the facts contained in thecertificate.”
G.

Some Other Challenges in MLA Process
Although the issues regarding the admissibility of evidence obtained by way of MLA havebeen resolved with the amendments to the EA to include the new Chapter VA above mentioned,
the fact remains that the new provisions have yet to be tested in courts. The above provisions
were inserted into EA as a consequence of the Perwaja case. It is foreseeable that new technicallegal challenges may be made in future cases where the prosecution wishes to tender foreign
evidence obtained by way of MLA, which may touch upon issues or areas not catered for by theabove provisions.
It is also pertinent to note that the MLA process is in itself not a simple one. The draftingof an MLA request is a process that requires meticulous drafting by the enforcement agency
concerned, or in this case of the MACC, so as to ensure the final version is not only accurate but
complete in material particulars. A request that contains mistakes or is incomplete will result inpossibly a supplementary request to be prepared and sent, or at least may result in further- 106 -

communications between the authorities of both requesting and receiving countries to clarify
certain facts or issues.
An MLA request also takes time to be executed and this may not allow the prosecution in
the requesting country to wait, as the court in which a trial is conducted may not wait for several
months pending the execution of the request. In a few cases, the trial continued and theprosecution case was closed without waiting for the MLA evidence requested for. For MACC,
there was only one case where a witness was successfully arranged to appear and testify here,
which resulted in the conviction of the accused concerned. However, in the majority of cases,
witnesses cannot be found, while tracing for them takes time. Furthermore, a potential witness ina foreign country is not obliged to come here to testify. 12
H.

Recovery of Assets Obtained from Corruption in Foreign Jurisdictions
This is an area which remains largely unexplored. Malaysia has not made any request to
recover assets obtained by way of corruption or other crimes. We also do not have the experienceof executing any request for freezing or forfeiture of assets. In the Perwaja case, the request was
only limited to obtaining witnesses’ statements or depositions and documentary evidence.
Despite the fact that millions of ringgit were siphoned out by Eric Chia from Perwaja company
to certain overseas accounts belonging to his family member, no specific request was made torecover the money.

12

Section 9 MACMA. Conversely, a person in Malaysia is also not bound to go to a foreign country to testify there
pursuant to a request under section 27 MACMA.

- 107 -

INFORMAL MEASURES IN MUTUAL LEGAL ASSISTANCE —SUCCESS STORIES; PUBLIC–PRIVATE PARTNERSHIP TO PREVENTAND DETECT CORRUPTION
Dato’ Umar Saifuddin bin Jaafar *This paper is a continuation of our first paper entitled “MLA in Action: Prosecution’s
Challenges – The “Perwaja case”: Then & Now”. As earlier mentioned in that paper, theinvestigation and prosecution of the Perwaja Case took a long time. The investigation process
took about 8 years to complete. An important aspect of the investigation involved MLA requests
to several States. The Perwaja Case has shown the difficulties faced in obtaining evidence by
way of MLA from a foreign jurisdiction 1. Of all these difficulties, time remains the most crucial
element when dealing with the MLA process, as more often than not, delay will occur.
This paper will attempt to show a few cases where MACC, despite resorting to informal
measures to obtain MLA, was successful. The cases will be explained here. 2
I.

INFORMAL MEASURES IN MUTUAL LEGAL ASSISTANCE — SUCCESSSTORIESIt must be stated here that informal assistance does not mean all types of assistance can beobtained by this means. The most common form of informal assistance is direct contact at thelaw enforcement level or agency to agency. The requested law enforcement may call theircounter-parts in other States to render assistance on obtaining publicly available informationsuch as land title records or company registration. This can be done easily between the relevant
officers of the anti-corruption agencies in the requesting and requested States. Other types ofassistance include locating a person, premises, arrangement to interview a person and verifying
information.
A.

Case No. 1: MACC, Malaysia — KPK, Republic of Indonesia
The MACC requested assistance to detect one material witness (Mr. A) believed to beresiding in Ponorogo District in the Republic of Indonesia for the purpose of getting Mr. A totestify for a corruption case in a court in Malaysia. The accused person is a Malaysia Road
Transport Department officer who was charged with soliciting and accepting bribery. Mr. A wassuccessfully located by the KPK, and he was willing to cooperate with the KPK and the MACC.
The KPK then assisted the MACC by arranging Mr. A’s transport to Malaysia. The wholeprocess of assistance took less than two weeks.
*

Senior Federal Counsel, Legal & Prosecution Division, Malaysian Anti-Corruption Commission (MACC).
Refer to our first paper “MLA in Action: Prosecution’s Challenges – The “Perwaja case”.
2
Subsection 4(1) Mutual Assistance in Criminal Matters Act 2002 [Act 621]: “This Act does not prevent theprovision or obtaining of international assistance in criminal matters to or from the International Criminal Police
Organization (INTERPOL) or any other international organization.”1- 108 -

After the trial, the accused person was found guilty of 2 charges of corruption and wassentenced to 12 months’ imprisonment and fined RM 10,000 for each charge on 18th January
2011. The trial could not have succeeded without Mr. A’s testimony.
B.

Case No. 2: MACC — ACB, Brunei Darussalam
This case involves a request for assistance to locate and obtain copies of documents fromthe Brunei Customs Department and to record a statement from an officer of the Brunei Customs
Department. A company (ABC Sdn. Bhd.) based in Sarawak, Malaysia was being investigated.
The response from the ACB, Brunei Darussalam was received in less than two weeks and theassistance process was concluded as scheduled. Although no charge was made, the Public
Prosecutor’s Office instructed a “Departmental Report” to be sent to the Royal Malaysian
Customs Department to notify them of the internal weaknesses to detect falsified customs
documents in their system and procedures.
C.

Case No. 3: MACC — NACC, Kingdom of Thailand
This was a request for assistance from the NACC, Thailand to locate a suspect (Malaysian)
who was believed to be residing somewhere in Songkhla, Thailand using a false identity. The
suspect was supposed to be charged in Malaysia for a corruption case under section 17(b)MACC Act 2009. The suspect was located in Songkhla Central Prison, Thailand. It was later
discovered that the suspect had been sentenced to imprisonment for 16 years for a drugtrafficking offence under Thai law since 2010. The process of assistance in this particular casetook less than six months. The investigation paper for this case was later submitted to the Deputy
Public Prosecutor for further directions.
D.

Case No. 4: MACC – CPIB, Singapore
This was a request to locate and take a statement from a material witness in Singapore who
was working at a private company in Singapore. The witness is a Singaporean. The witness
statement was required to conclude a forgery case amounting to more than RM200,000 that was
being investigated by the MACC in the State of Negeri Sembilan, Malaysia. The process of
assistance in this particular case took a week.
E.

Remarks on Informal Measures
Informal measures can be effective tools in the MLA process and the above-mentioned
cases show that informal measures may be a better option than a formal MLA request. However,such measures may not be possible in certain situations, for example, where “compulsive
measures” are required, or when a particular witness is reluctant to cooperate. 3 It is also
important to note that, in so far as the Malaysian law is concerned, admissibility of foreign
evidence in a criminal proceeding is governed by Chapter VA (sections 90D – F of the Evidence

3

BaizuraKamal,“International
Cooperation:
MutualLegal
AssistanceandExtradition”,
http://www.unafei.or.jp/english/pdf/PDF_GG6_Seminar/05-4_Malaysia.pdf. “An example of compulsive measureswould be the issue of subpoenas to witnesses to record statements before a judicial authority and production orders
to financial institutions or companies. Thus it operates under different and much stricter rules than those that apply
to the informal channels.”- 109 -

Act 1950 [Act 56]. 4 It may be an issue in a criminal proceeding if a particular witness statement
or deposition is obtained informally.
II.

PUBLIC-PRIVATE PARTNERSHIP TO PREVENT AND DETECT CORRUPTION

Efforts in fighting and eradicating corruption will not succeed simply by a public-sectorbased strategy only. An alliance with the private sector is also extremely vital. Thus, forging
public–private partnership is one of the important approaches to be considered in the prevention
and detection of corruption.
Corporate Integrity Pledge 5
An important measure in this regard has been the introduction of the Corporate Integrity
Pledge (CIP). Introduced in March 2011, it is a collaboration between Transparency Internationalwith the MACC, the Malaysia Institute of Integrity, the Performance Management and Delivery
Unit, the Companies Commission of Malaysia, the Securities Commission Malaysia and Bursa
Malaysia. What CIP simply means is, a company signs a declaration witnessed by the MACC
that it will not commit corrupt acts, will create a business environment free from corruption andwill conduct its business based on anti-corruption principles when dealing with other business
entities and the government. Five principles are contained in a CIP:

A.

(i)

committing to promoting values of integrity, transparency and good governance;(ii)

strengthening internal systems that support corruption prevention;(iii)

complying with laws, policies and procedures relating to fighting corruption;(iv)

fighting any form of corrupt practice;(v)

supporting corruption prevention initiatives by the Malaysian government and the
MACC.

However, the CIP on its own is not enough. Companies that sign the CIP must come up
with self-assessment mechanisms and action plans to strengthen their integrity systems. Further,
the companies concerned must establish their own internal infrastructure such as a committee forcorporate governance and internal training. Finally, such companies must also do the necessary
auditing and annual reporting as to their achievement. All these are important so as to ensure any
CIP entered and signed by the companies will not be empty promises.
To date, the MACC has entered CIPs with more than 500 companies. These include multinational corporations, publicly listed companies, private limited companies, small and medium

4

Section 90D Act 56: “Notwithstanding any other provision in this Act, this Chapter shall apply for the purpose ofdetermining the admissibility of evidence obtained pursuant to a request made under the Mutual Assistance in
Criminal Matters Act 2002 [Act 621].”5<http://www.sprm.gov.my/ikrar-integriti-korporat-cip.html?&lang=en >.

- 110 -

industries, NGOs, Government-linked companies (GLCs), educational institutions, professional
bodies and even Government departments and agencies.
B.

Certified Integrity Officer Programme (CeIO)The CeIO programme is a one-of-a-kind training programme conducted by the Malaysia
Anti-Corruption Academy (MACA). The certified programme was first conceptualized in 2006
when two government-linked companies requested MACC staff to be stationed in theirrespective offices to monitor corruption activities. The MACC certifies selected senior officers,
upon completion of the six month programme, from Government agencies and the private sector
as Certified Integrity Officers (CeIOs) to assist the Commission in corruption prevention efforts.
This programme is geared to form the CeIO Network which will act as a catalyst to create
an integrity-based work culture in the Government and private sector and as experts in the areasof:• Anti-corruption• Misuse and abuse of power• Integrity development
To date, Petronas, Telekom Malaysia (TM), Tenaga Nasional Berhad (TNB), Social
Security Organisation (SOCSO), Amanah Raya Berhad (ARB) and various enforcement
agencies including the Royal Malaysia Police (RMP), the Road Transport Department (RTD),
the Royal Malaysian Customs Department and Immigration Department have participated in the
programme, to mention some.

- 111 -CURRENT CHALLENGES AND BEST PRACTICES IN THE
INVESTIGATION, PROSECUTION AND PREVENTION OF
CORRUPTION CASES
Khin Cho Ohn*I.

INTRODUCTION

Corruption is a chronic disease that damages the merits and aptitude of human beingsand swallows resources from the earth. Although we all have been trying to eliminate thedisease, it is still surrounding us. The more globalization the world has achieved, the morecorruption increases. When criminals who commit corrupt acts use this technique for theircrime, what can we do, what should we do? We have to cooperate and assist each other ineliminating the corruption on this earth, absolutely.
II.

HISTORY OF ANTI-CORRUPTION LAWS IN MYANMAR

Before ratifying the United Nations Convention against Corruption, anti-corruption in
Myanmar had a long, deep legal history dating back to 1885. After three Anglo-Burmese
Wars with the British, the Kingdom of Myanmar was annexed to the British Empire in 1885.
The Penal Code and the Criminal Procedure Code were introduced in Myanmar and they
were widely used till 1948 when we received independence. Even after independence thePenal Code and the Criminal Procedure Code continued to be in legal effect. Regarding
corruption, there was an old law, the Suppression of Corruption Act, 1948. Myanmar has
adopted the English Common Law Legal System in a modified manner taken from India.
Myanmar ratified the ASEAN Mutual Legal Assistance Treaties (AMLAT) in 2004 anda domestic law, the Mutual Legal Assistance in Criminal Matters Law was enacted after that.
After ratifying the United Nations Convention against Corruption, the Anti-Corruption Law
was promulgated by the Pyidaungsu Hluttaw (Parliament) Law No. 23/2013 on 7th Aug 2013.
In this paper I will present the challenges and the best practices in investigation, prosecution
and prevention of corrupt acts.
III. GENERAL PRACTICE OF CRIMINAL CASESAs Myanmar practices the Indian Legal System, investigation is not done by the Union
Attorney General’s Office (UAGO). The Union Attorney General’s Office is the main officewith 14 Region and State Advocate General’s Offices, District Law Offices and Township
Law Offices under it. One of the functions of the UAGO is prosecution, and investigation isdone by the prosecuting body which is under the Ministry of Home Affairs. The procedure
for the prosecuting body is prescribed in the Criminal Procedure Code. The Bureau of Special
Investigation is one of the prosecuting bodies. It was formed according to the Bureau of*

Deputy Director General of the Union Attorney General’s Office, Myanmar.

- 112 -

Special Investigation Act, 1951. The functions of the Bureau are: investigation, submitting
legal opinions on cases, prosecution, collecting and submitting intelligence. The prosecution
officer of the Bureau conducts criminal cases on behalf of the state before the Court under the
Bureau of Special Investigation Act, 1951.
The function of the UAGO is controlled by the Attorney General of the Union Law. I
will present the procedure of prosecution from a Law Officer’s point of view. In respect of aninvestigation, when a report of the prosecuting body is received, a Law Officer examines
whether the facts are complete or not in conformity with law. After that, the Law Officer
gives an opinion on the case. Then the case is sent back to the prosecuting body, and the caseis filed with the respective Court. The duty of a Law Officer is like a computer: the output
will come out depending on the input or facts. If the facts are not complete, the opinion givenby the Law Officer will not be accurate. Therefore, the first challenge in investigation is thatsome facts collected by the prosecuting body are insufficient.
Times change and general practice also changes. There were few issues in theinvestigation of corruption cases under the old law, the Suppression of Corruption Act, 1948.
The police examined the accused and witnesses, took custody of remands, seized money andproperty and filed their case at the court. After ratifying the United Nations Convention
against Corruption, the Anti-corruption Law was promulgated and there came challenges.
Under the new Law, the President of Myanmar formed the Anti-Corruption
Commission comprising one Chairperson and one Secretary among the fifteen members withthe approval of the Pyidaungsu Hluttaw (Parliament) to combat corrupt acts. The
Commission conducts enquiries into bribery and illicit enrichment of suspects andinvestigates them. For enquiry and investigation, the Commission forms the Investigation
Board which is led by any member of the Commission with appropriate citizens and thePreliminary Scrutiny Board with the appropriate persons on case-by-case basis. When theCommission receives information from the President of the Union and two Speakers of
Parliament and complaints by aggrieved persons, it directs the Investigation Board to enquirefrom the suspect about his actions and illicit enrichment. But at first instance, investigation
causes the suspect to get the right to explain the allegations. If he can explain with strong
evidence, he will be free. In doing so, investigating the suspect, it is said that the provision of
the new Law is good at practicing humanity and ensuring the rights of the suspect. But someaccused are absconding while the case is under investigation. It is one of the challenges. We
are considering issuing a separate law or directive to overcome this challenge. Moreover, theAnti-Corruption Law and rules related to it also need to be amended.
IV. PROSECUTION
When a case related to corruption is filed, the Anti-Corruption Commission requests the
UAGO to take part in the corruption case. When the UAGO receives the request from theCommission, I, as the Deputy Director General, as well as the head of the Prosecution
Department, direct the Advocate General’s Office of the respective Region or State to attacha Law officer to the case. The case is constructed on the facts of the investigation. There aretechnical deficiencies in the court so the cooperation of the prosecuting body and the Law
Officer is needed. Sometimes there are prosecution witnesses before the court, who deny thestatements attributed to them in police papers. In these cases, the conducting law officer has
to compare their statements before the court with the police paper. In some cases, important- 113 -

witnesses do not appear before the court. In these cases, the appearance of witnesses iswaived. This is a challenge during the prosecution of these cases.
When the accused is acquitted at trial, it is necessary to appeal to the respective High
Court of Region or State or the Supreme Court of the Union against the acquittal. But there isa limitation of six months for an appeal against acquittal. If the limitation is exceeded, it isnecessary to draft an affidavit. This is one of the challenges facing Law Officers. In theprosecution of some corruption cases, the prosecuting body cannot seize money and property
related to the corruption as the accused refuses to produce the evidence. In these cases, wehave to collect circumstantial evidence. Sometimes there are loopholes because of
insufficient circumstantial evidence. The English Common Law Legal System says “A manis presumed to be innocent until he is proved to be guilty.” The burden of proof lies withprosecution and the Law Officer. Although the jury system was once initiated, there were
weaknesses in using it because of the custom and culture of the Myanmar Society. All thejudgements are made by the Court. It is a maxim of the English Common Law that “It isbetter for ten guilty persons to be acquitted then for one innocent man to be convicted.”
V. PREVENTION
The Ministry of Home Affairs is more responsible for the prevention of corruption thanLaw Officers. At this point, the rule of law is essential for the prevention of offences. Thiscan be done with the cooperation of three pillars of justice mainly the Prosecuting Body, theUnion Attorney General’s Office and its subordinate offices and the Courts. The Prosecuting
Body has to collect the facts, the Union Attorney General’s Office has to conduct the casewhether the accused is guilty or not and the court has to give an effective deterrent judgement.
The rule of law is fundamental for the prevention of crimes and can produce Good
Governance. Our old practice has been done with experience passed from senior lawyers tojunior lawyers. During the time of the new Government, we conducted 56 workshops andseminars with the cooperation of the UN and International Organizations, International Law
firms, the Attorney General’s Chambers and the Ministry of Law of ASEAN countries. The
first seminar was with the European Union (EU) on the “Rule of Law” in February 2012. It
was the largest international seminar in Myanmar with experts from 20 countries present, andit was attended by personnel from the Legislature, Executive and Judiciary. The attendees
amounted to 250 people. Whenever we conduct international workshops and seminars, we
invite the other two pillars of the State, namely, the Legislature and the Judiciary. Conducting
seminars and workshops gives awareness to the participants and other attendees, who
disseminate the knowledge gained to their colleagues.
We engaged the UNDP to have their country programme, an agreement with Japan
International Cooperation Agency (JICA), and USAID, and created a Design Workshop to
restructure the functions of the UAGO. The Ministry of Law of Singapore signed an MOU
with us, and the Japan International Cooperation Agency (JICA) signed a Record of
Discussion. We already have two MOUs with China and Lao PDR. We just signed an ROD
with the Republic of Korea (KOICA) on 14th October 2015.
Internationally, the Attorney General of the Union gives keynote addresses around theworld. He was the at APEC (the Asia–Pacific Economic Conference) Pathfinder Dialogue in
Bangkok and the Rule of Law Seminar in Bangkok conducted by the American Bar
Association, Department of State of USA and the Royal Family of Thailand. He also gave a- 114 -

keynote address at the International Legal Aid Conference in Johannesburg, South Africa. He
also gave a speech in Singapore organized by the AGC on the Changing Role of the
Myanmar Legal System. These are landmarks in the prevention of corruption as well as Ruleof Law.
VI.

MUTUAL LEGAL ASSISTANCE IN CRIMINAL MATTERS LAW

Myanmar promulgated the Mutual Legal Assistance in Criminal Matters Law 2004 to
be in line with international standards. This law was drafted with the help of the UNODC and
was approved by the Financial Action Task Force (FATF). FATF comprises 36 member
states and is headquartered in Paris, France. Myanmar ratified the ASEAN Mutual Legal
Assistance Treaty (AMLAT) in 2004 and also checked whether our law was in conformity
with the AMLAT. Every letter of the treaties and the spirit of the treaties are in conformity
with the Law. The Ministry of Home Affairs issued the Mutual Assistance in Criminal
Matters Rules in the same year. The Government shall form the Central Authority for
rendering assistance among states in criminal matters in which the Union Minister of the
Ministry of Home Affairs is a Chairman, the Deputy Attorney General is one of the members
and the Director General from Myanmar Police Force is Secretary.
According to this law, any foreign state requesting assistance of Myanmar in criminal
matters shall:(a) If it is a State Party to the international convention or regional agreement to which
the Union of Myanmar is a State Party or a state which has a bilateral agreementwith the Union of Myanmar, requests for assistance are to be submitted directly to
the Central Authority;(b) If it is the State Party to the international convention or regional agreement towhich the Union of Myanmar is not a State Party or the state that has not enteredinto a bilateral agreement with the Union of Myanmar, requests for assistance are
to be submitted to the Central Authority through diplomatic channels.
Any foreign State may, in making a request under section 10, with respect toinvestigation, prosecution and judicial proceedings in criminal matters include and request
the following matters:(a) Taking evidence or statements from any person;(b) Rendering service so that judicial documents shall have effect;(c) Examining objects and sites;(d) Identifying or tracing money or property that is relevant to the offence to be used
for evidentiary purposes ;(e) Execution of searches, seizures, control, issuing restraining orders andconfiscation of exhibits;- 115 -

(f) Obtaining information, documents to be used for evidentiary purposes, records
and expert opinions;(g) Providing originals or certified copies of relevant documents and records to be
used for evidentiary purposes;(h) Exposing the residential address of offenders, location of the exhibits and othernecessary information;(i) Other matters in respect of which the Central Authority has agreed to giveassistance.
The requesting state shall, in making a request mention the following facts in the
Myanmar language or the English language:(a) Name and designation of the authority making the request;(b) Statement setting out a summary and nature of the case relevant to the request;(c) Necessary identity, address and nationality of the person concerned;(d) Procedures for rendering assistance in matters for obtaining evidence;(e) Period and limitation during which the request is to be complied with;(f) Information to be exposed and evidence to be obtained;(g) Statement to perform confidentially if the matter is required to be performed
confidentially;(h) Extract of relevant laws, rules and procedures exercised in one’s own state inrespect of the requested assistance and the reasons thereof;(i) Name, function and responsibility of the person conducting the investigation orprosecution in judicial proceedings in one’s own state;(j) Other necessary information.
The requesting state may, in urgent circumstances, make a request orally by telephone
facsimile, electronic mail or other electronic means including computer networks. In making
such requests the original letter of request shall be sent to the Central Authority without delay.
The Mutual Legal Assistance in Criminal Matters Law is an existing law, but to date there isno case related to this law and no country in ASEAN has submitted requests on this matter.
VII.

PUBLIC–PRIVATE PARTNERSHIP AND BEST PRACTICE

Corruption is a difficult issue to deal with. To tackle corruption cases, it is necessary tohave the cooperation of the government and the public. Corruption cases can be constructedon the complaint of the public, and we have announced hotline numbers for use by the public- 116 -

for such complaints. We also advertise in the newspapers for public awareness. There aresome sample cases which resulted in the punishment of the accused based on complaints
received from the public. One of these is where the Homalin Township Judge of Sagaing
Region decided judgements which were not consistent with the law; thus, he was involved incorrupting criminal cases. He was sentenced by the High Court of the Sagaing Region withimprisonment for a term of 10 years with labour. Due to information from the representativeof the Homalin constituency, the above case was discovered. When the Anti-Corruption
Commission receives a complaint, it forms, if necessary, an investigation board andPreliminary Scrutiny Board to investigate these offences. Then, the Commission requests the
UAGO to give legal advice on these offences. During investigation and prosecution, theprosecuting body and the UAGO need to cooperate. It is the best practice that the prosecuting
body and the UAGO work cooperatively. Then the Commission requests the Union Attorney
General’s Office to give legal advice for these offences. It may therefore be said that the bestpractice for corruption cases is also public communication and engagement. Since this is thebest practice, and there will then be the rule of law and hence we have “Good Governanceand Clean Government”. The government alone cannot apply best practices without theactive participation of the public. Public–Private Partnership is necessary. To achieve this, thepublic must be “Good People, Clean People”.
VIII. WHISTLE-BLOWER PROGRAMME OR WITNESS PROTECTONMEASURES
Myanmar provides whistle-blower and witness protection in section 17(i) of the AntiCorruption Law. The Commission gives necessary protections and rewards to the informer inthe matter of revealing and taking action for informing, provided there is credible evidence inrespect of the bribery or enrichment by bribery allegation. The Commission can also issue
rules about this, but the practice is not widely used yet.
IX.

CONCLUSION

Myanmar has come a long way in its legal system since belonging to the English
Common Law legal family. The judge is responsible for the judgement, the Law Officers forprosecution and the prosecuting body for investigation. Cooperation among these three
institutions is necessary for combating crimes. As a step in both law and practice inintroducing the fight against corruption, Myanmar has ratified the United Nations
Conventions against Corruption (UNCAC) and the ASEAN Mutual Legal Assistance Treaty.
Myanmar also promulgates domestic laws related to these treaties and applies these laws. In
applying these laws, we face challenges. Challenges are everywhere but the most important is
to overcome them. Myanmar is trying its best to overcome these challenges in both law andpractice.

- 117 -

PUBLIC–PRIVATE ANTI-CORRUPTION INITIATIVES IN THE
PHILIPPINES: MEASURES FOR SUSTAINABILITY
Atty. Rowena A. Del Rosario-Vidad *I.

INTRODUCTION

The Philippines used to be known as one of the most corrupt countries in Asia. 1 An
opportunity to drastically transform that image came under President Benigno Aquino’s anticorruption platform that served as a snowballing call for the private sector to join thegovernment in weeding out the roots of corruption.
The latest snapshot of public opinion from recent surveys 2 reflecting a steady decline incorruption of the private sector in its affairs with the government and the Philippine’s upward
climb by 10% points in controlling corruption 3 clearly show the Philippine governments’metamorphosis from one plagued with corruption to one that is focused on trudging thestraight path.
In the Global Competitiveness Report for 2013-2014 of the World Economic Forum,
the Philippines is ranked 59th of 148 economies. Government is also perceived to be more
efficient in spending public revenue (86th to 36th) and the diversion of public funds due tocorruption is now perceived to occur less often (100th to 79th). 4
Indeed, the Philippines is perceived to be becoming less corrupt over the past 3 years as
it continues to improve its ranking in a global corruption survey. This is affirmed by thePhilippines’ improved ranking from 134th in 2010, up from 105th in 2012, 94th in 2013, to85th in 2014, as published in Germany-based watchdog Transparency International’s
Corruption Perception Index. 5 These statistics demonstrate an improving trend, despite thehype of the pork barrel issue involving high-ranking elected officials of the Philippine
government. 6
This goes to show that the Aquino administration’s anti-corruption efforts are on theright track and are gaining momentum. Part of this victory should be attributed to the private*

Graft Investigation and Prosecution Officer II, Office of the Overall Deputy Ombudsman, Philippines.
Dumlao, Doris, WB: Corruption in RP worst in East Asia, Philippine Daily Inquirer, available at<www.article.wn.com/view/2008/06/25/WB_Corruption_in_RP_worst_in_East_Asia/> (last accessed on 07
October 2015).
2
Social Weather Station survey conducted from November 2014 to May 2015, available at<http://www.sws.org.ph/> (last accessed on 26 September 2015).
3
2014
World
Bank’sWorldwide
GovernanceIndicators
availableat<http://info.worldbank.org/governance/wgi/index.aspx#home> (last accessed on 08 October 2015).
4
The
GlobalCompetitiveness
Report,2013-2014
availableat<www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf> (last accessed on 07 October2015).
5
Corruption Perceptions Index report published on 03 December 2014, available at<https://www.transparency.org/whatwedo/publication/cpi2014> (last accessed on 05 29 September 2015).
6
Business Pulse: Entrepreneurs on PH Economy and Campaign Against Corruption, available at<http://www.integrityinitiative.com/articles/media-news> (last accessed on 01 October 2015).
1- 118 -

sector’s active participation in the government’s anti-corruption campaign over the past five
years. The gains thus achieved by the Aquino government only make more urgent theimperative to continue a strategic anti-corruption policy geared towards fostering morepartnerships with the private sector.
This paper focuses on Philippine public and private corruption initiatives to prevent anddetect corruption, arguing that to ensure the sustainability and impact of such initiatives thegovernment must reduce, if not totally eliminate, private sector cynicism and encourage
private sector cooperation through provision of adequate incentive mechanisms or rewards
systems, strong whistle-blower laws and full enforcement of anti-corruption laws.
The first part of this paper briefly looks at the different private-sector-led initiatives that
institutionalize a culture of integrity in the business sector and address the promotion oftransparency and good governance. The second and third parts outline the different
corruption prevention initiatives being implemented by the Office of the Ombudsman, theprimary anti-corruption body of the Philippine government, in partnership with the private
sector.
By integrating the lessons learned from two high-profile corruption cases mirroring a
successful collaboration of the public and private sectors in the detection and prosecution ofcorrupt acts, the final part of this report identifies key factors for the success andsustainability of public–private sector initiatives in combating corruption.
II.

PRIVATE SECTOR INITIATIVES AT A GLANCE

A.

Integrity Initiative: the SHINE Project
The Makati Business Club and the European Chamber of Commerce started theIntegrity Initiative (initiative) in 2010 shortly after the Philippines received a grant from
Siemens Germany to implement project SHINE (Strengthening High-Level Commitment
for Integrity initiatives and Nurturing Collective action of Enterprises)—a four-year
undertaking which aims to initiate collective action among ethical foreign and local businessenterprises that wish to see the creation of fair market conditions for all market participants. 7
Aside from enjoining all business executives to sign integrity pledges, which
institutionalize integrity, honesty, and transparency in all aspects of conducting business, theinitiative also imposes upon all signatories the duty to maintain a code of conduct for
employees to pursue ethical business practices. 8
As of November 21, 2014, 1,896 private companies, 202 icon organizations, 43
government agencies, and 86 members of the academe have signed the Integrity Pledge. 9
In its early birth years, the initiative convened a series of discussions with
communication experts focused on sharing best practices in promoting integrity habits,
among the highlights of which are:7

Integrity Compliance Handbook, <www.integrityintiative.com>.
The Integrity Compliance Handbook, p. 2, published by the Makati Business Club (Integrity Initiatives ProjectManagement Team).
9
Signatories’ Registry, available at <www.integrityinitiative.com/signatories-to-pledge> (last accessed on 02
October 2015).
8- 119 -•MERALCO’s 10 launching in 2010 of “Be Right” Open Communication Policy, whichallows employees to report unethical behaviour through: e-report mo, a whistleblowing channel, and e-suggest mo, where employees can share their suggestions on
increasing efficiency in the company’s operations. 11•

Punongbayan and Araullo 12 launched the “Proactive Hotline” service, a web-based
reporting facility which provides stakeholders and concerned citizens with a platform
to report conflicts of interest and misappropriation of assets and other acts of fraudanonymously to company authorities for proper action. Aside from ensuring fullanonymity for the whistle-blower, the hotline also features a monitoring system forthe reporter to track the progress of his or her report. 13

The initiative envisions to set up an Integrity Certification Program similar to the ISO
or a Seal of Good Housekeeping. It will train a pool of accreditors who will examine andassess the level of implementation of organizational integrity practices so that thosecompanies that have a good track record of enforcing business ethics can invite the initiative
for their certification. Certified companies can avail themselves of incentives from thegovernment and other private sector partners. Presently, details of such incentives are being
worked out by the initiative.
AIM Hills Program on Governance 14
A prototype of the integrity initiative project that was launched five years ago, the
AIM Hills Project on Governance is a one-year project grant from the Center for International
Private Enterprise implemented by the Asian Institute of Management (AIM) with thefollowing objectives: strengthening awareness and understanding of the social and economic
costs of corruption among Philippine businesses and generating their support for anticorruption efforts, and strengthening the ability of Philippine small and medium enterprises(SMEs) to prevent corrupt and other unethical behaviour among their employees. This project
includes a series of workshops and focus-group discussions for small and medium enterprises
on strategies to combat corruption. It also intends to prepare a manual on operating a businesswithout corruption for SMEs, and to develop a website. To support this project, theDepartment of Trade and Industry (DTI) created a website “Business Fighting Corruption”
that serves as the clearinghouse of all information relating to business ethics and the control
of corruption in the private sector in the Philippines. 15
B.

Judicial Reform Initiative Program 16
The Judicial Reform Initiative Program is a private sector umbrella group tasked tocoordinate, monitor and push for judicial reforms which was launched at the Integrity
Summit in 2012. This project was initiated by the Financial Executives Institute of theC.

10

The Manila Electric Company, also known as Meralco, is the Philippines' largest distributor of electrical
power.
11
Supra note 7.
12
Punongbayan and Araullo is a member firm within Grant Thorton International Ltd, one of the world’s
leading organizations of independently owned and managed accounting and consulting firms.
13
Supra note 7.
14<http://csis.org/programs/hills-program-governance/governance-centers-philippines>.
15<http://www.businessesfightingcorruption.org/>.
16<http://www.finex.org.ph/>.

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Philippines (FINEX) 17 and is now under the Integrity Initiative with support from 18 majororganizations in collaboration with the Supreme Court, the Department of Justice, and theArangkada Project.
FINEX aims to promote the progressive and innovative application of financial
knowledge and skills in beneficial service to business, government, and society as a whole,by observing the highest standards of competence and ethical behaviour at all times. Throughthis advocacy programme, the private sector, through corporate social responsibility, can also
embrace activities supporting judicial reform.
Coalition Against Corruption (CAC) 18
Launched on 21 September 2004, the Coalition against Corruption (CAC) is a multisectoral partnership that includes the academe, business sector, civil society organizations,and churches that fights corruption. Its mission is to implement and support countercorruption projects in the area of procurement reforms and delivery of essential public
services.
D.

CAC’s goals are to strengthen public participation in governance and to ensure properuse of public funds. The projects supported by CAC include government procurementmonitoring, textbook and medicine monitoring, internal revenue allotment (of barangays)
monitoring, Priority Development Assistance Fund (Pork Barrel) monitoring, catching the big
fish, and lifestyle checks on public officials.
Bantay.ph 19
This is an educational and volunteer platform supervised by the CAC. Founded three
years ago, the majority of its activities in the fight against corruption have been rooted in
civic education. Through the use of internet media, it promotes youth and citizen engagement
in monitoring frontline government services and upholding good government service. A
highlighted endeavour of Bantay.ph is information dissemination and monitoring of the AntiRed Tape Act (ARTA). 20
E.

The Civil Service Commission 21 deputizes Bantay.ph student volunteers to go todifferent government agencies to monitor ARTA compliance, report violations, and do
advocacy work in their schools and chosen communities. These volunteers come from
Bantay.ph’s official school partners. 22

17

FINEX is a non-stock, non-profit, non-political association founded in 1968 and is composed of more than
700 financial executives all over the Philippines.
18<http://www.cac.org.ph>.
19<http://www.bantay.ph>.
20
Republic Act 9485 or the Anti-Red Tape Act (2007) was enacted to improve efficiency in the delivery of
government service to the public by reducing bureaucratic red tape and preventing graft and corruption.
21
The Civil Service Commission is a constitutional body which acts as the central personnel agency of thePhilippine government.
22
Speech of Integrity Initiative and Makati Business Club Chairman Ramon r. Del Rosario, Jr. published on 15
July
2013
at
the
development
Bank
of
the
Philippines
website:<https://www.devbnkphl.com/about.php?cat=271&0d3267bddc3d3d38c3630493837533ab> (last accessed on
01 October 2015).

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Transparent Accountable Governance Project 23
Financed by USAID, the Asia Foundation—in partnership with the Makati Business
Club, Social Weather Station (SWS), the Philippine Center for Policy Studies (PCPS), and
the Philippine Center for Investigative Journalism (PCIJ)—developed the innovative
Transparent Accountable Governance (TAG) Project. Its mission is to promote transparency
and accountability in government and push forward a collaborative action-oriented agenda tocombat corruption.
F.

Working closely with the above organizations, TAG documents business and civilian
viewpoints on corruption as related to doing business in the Philippines (via survey research);
identifies and analyses key areas of corruption and quantifies their economic costs (via casestudies); and focuses business and public attention on the ways particular types of corruption
affect the conduct of business and economic growth in the Philippines and builds consensus
on a concrete agenda for counter-corruption reform (via public debate).
TAG's integrated approach has progressed well since its launch in 2000. Its mainachievements include: disseminating information on the Estrada trial and mobilizing public
support (Makati Business Club); completing and disseminating three economic researchstudies on corruption to identify key areas of corruption and analyse their dynamics and coston the political economy (PCPS); undertaking public and business opinion surveys (SWS);
investigative reporting (PCIJ); and keeping the public up to date on the new administration's
progress in the first few days of government changeover. 24
Transparency and Accountability Network 25
The Transparency and Accountability Network is an umbrella organization composedof anti-graft allies such as non-government, faith-based organizations, civil society groups
and watchdogs as well as universities and research institutions, united together in its
advocacy for corruption reduction, prosecution and good governance. It was established in
November 2000 with 19 organizations as founding members amid concerns over lack oftransparency and accountability in governance. Today, it has grown to a 25-member group oforganizations.
G.

Specifically, TAN aims to:• Serve as a mechanism for coordinating transparency and accountability initiatives ofcivil society;• Engage government, the private sector, and the citizenry in a comprehensive strategy
to promote transparency and accountability; and• Formulate, advocate, and where appropriate, implement strategic reform initiatives.

23

TAG Tools, available at <https://asiafoundation.org/resources/pdfs/TAGTOOLSFINALRRL.pdf> (lastaccessed on 07 October 2015).
24<http://www.tag.org.ph>.
25<http://www.tan.org.ph/>.

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III. CORRUPTION PREVENTION INITIATIVES OF THE OFFICE OF THEOMBUDSMAN IN PARTNERSHIP WITH THE PRIVATE SECTOR 26
A.

Campus Integrity Crusaders
Campus Integrity Crusaders (CIC) refers to any non-partisan school-based youth
organization recognized by a secondary or tertiary educational institution and duly accreditedby the Office of the Ombudsman. 27 The strategy of accrediting Campus Integrity Crusaders
aims to empower the youth in their involvement in corruption prevention initiatives bydeveloping their leadership skills and instilling values of integrity and social responsibility.
The Office of the Ombudsman and a CIC may jointly undertake activities that aim to:• Cultivate the virtues of uprightness, responsibility, honesty, respect for authority, andlove of country;• Instill a sense of good citizenship and responsible leadership;• Inculcate the basic principles of human rights and civic duties; and• Promote the integration of corruption prevention education (CPE) teaching modules
in the school curricula.
Corruption Prevention Unit (CPU) 28
Corruption Prevention Unit (CPU) refers to any formal and non-partisan organizationfrom the private sector and civil society that is duly accredited by the Office of the
Ombudsman to undertake corruption prevention initiatives. As a partnership mechanism, thenetwork of corruption prevention units aims to assist and support the Office of the
Ombudsman in the implementation of its corruption prevention programmes. In coordination
with the Office of the Ombudsman, a CPU shall undertake the following functions: a) To
facilitate public information, education and capacity-building on accountability, transparency
and integrity in public service; b) To provide feedback on efficiency, red tape,mismanagement, fraud and corruption in the government, and report any information that
could determine the causes thereof; c) To promote and advocate high standards of ethics andefficiency in public administration; or d) To mobilize support for reforms in public service
delivery.
B.

C.

Integrity Caravan
Launched in 2013, the Caravan aims to communicate and engage the public and private
sectors on the various programmes and projects of the Office of the Ombudsman to further
build a broad-based strategic partnership of all anti-corruption stakeholders. It involves key
government agencies, local government unit (LGUs), private institutions, academic
institutions, the business sector, development partners, peoples’ organizations (POs), civil
service organizations (CSOs), non-governmental organizations (NGOs), and the generalpublic.
The Caravan is a year-long project launched on a nationwide scale. Supported by theUnited Nations Development Programme (UNDP) and other development partners, the26<http://www.ombudsman.gov.ph/>.
The Office of the Ombudsman is a constitutional body responsible for investigating andprosecuting Philippine government officials accused of crimes, especially graft and corruption.
28<http://www.ombudsman.gov.ph/docs/publication/cpu%20primer%20final.pdf>.
27- 123 -

Caravan composed the following initiatives:• Public Governance—A public dialogue that will bring together multi-sectoral
practitioners, champions and advocates of good governance and anti-corruption.
• The Ombudsman Integrity Lecture Series—A series of lectures on various good
governance and anti-corruption topics to be delivered by distinguished personalities
from the local and global community.
• University Integrity Tour—This integrity roadshow is specifically designed to build
the foundations of good governance and anti-corruption in the country’s educational
system. It will showcase the various programmes and projects through mini-lectures,audio-visual presentations and photo exhibits in several universities nationwide.
• Barangay Integrity—A knowledge sharing and public exchange among barangay
officials on ethical standards, good governance and public accountability. The
seminar will cover relevant and timely topics such as but not limited to the roles,
functions and programmes of the Ombudsman, and an orientation on the United
Nations Convention Against Corruption (UNCAC).
• Integrity Development Contest—Another activity for students at various levels
aimed at introducing them to the fundamentals of good governance and anticorruption through creative means including essay-writing, poster-making and shortvideo production.
IV. LESSONS LEARNED FROM THE ESTRADA AND NAPOLES PLUNDERCASES: A SUCCESSFUL JOINT COLLABORATION OF THE PUBLIC ANDPRIVATE SECTORS IN THE DETECTION AND PROSECUTION OF
CORRUPTION
Two cases illustrative of a successful joint collaboration of the public and private
sectors in the detection and prosecution of corrupt acts are the cases involving former
President Joseph Ejercito Estrada (Erap) and the Pork Barrel Queen Janet Lim Napoles. The
common denominators in the successful prosecution of these grand corruption scandals are:(1) the private sector’s heightened participation in alerting the authorities of corrupt acts andstaunch cooperation in the prosecution of corrupt officials and their accomplices; and (2) the
government’s strong support to witnesses and whistle-blowers by giving them security andimmunity from suits, and (3) effective inter-agency coordination.
The Estrada Plunder Case 29
In 2001, former Philippine President Joseph Ejercito Estrada (Erap) was indicted forplunder. 30 The trial of Estrada took place between 2001 and 2007 at the Sandiganbayan.
A.

29

People of the Philippines vs. Joseph Ejercito Estrada, et al., Criminal Case No. 26558, September 12, 2007
available at <http://www.lawphil.net/courts/sandigan/sb_26558_2007.html> (last accessed on 07 October 2015).
30
Section 2 of RA 7080 (July 02, 1991) defines plunder as: “plunder is committed when a public officer who, byhimself or in connivance with members of his family, relatives by affinity or consanguinity, business associates,
subordinates or other persons, amasses, accumulates or acquires ill-gotten wealth through a combination orseries of overt or criminal acts as described in Section 1 (d) of RA 7080 in the aggregate amount or total valueof at least Fifty million pesos (P50,000,000.00).”- 124 -

Popularly called Erap, Estrada was ousted from office in 2001 during a popular uprising in
Metro Manila following a botched attempt to impeach him by the Senate in which he wascharged with plunder and perjury. Soon after his ouster, the same charges were filed against
him in the Sandiganbayan.
Six years thereafter, or in 2007, the Sandiganbayan 31 ruled Estrada not guilty of perjury
but convicted him of plunder punishable by reclusión perpetua and consequently ordered theforfeiture of his illegally acquired assets. All of his co-accused were acquitted.
The plunder case consisted of four separate charges: 1) acceptance of 545
million pesos from proceeds of jueteng, an illegal gambling game; 2) misappropriation of 130
million pesos in excise taxes from tobacco; 3) receiving a 189.7-million-peso commission
from the sale of the shares of Belle Corporation, a real-estate firm; and 4) owning some 3.2
billion pesos in a bank account under the name Jose Velarde. All of these totalled
4,097,804,173.17 Pesos.
Jueteng Collections and Tobacco Excise Tax
The principal witness of the prosecution in the first and second predicate acts ofplunder is former Ilocos Sur Governor Luis Chavit Singson (Chavit). He testified extensively
on the following charges:
1.

(i) Estrada accumulated ill-gotten wealth amounting to 545 million Pesos more or lessfrom November 1998 to August 2000, through the monthly remittance to him of money
collected from operations of illegal gambling, commonly known as “jueteng,” based in the
different provinces of the Philippines in consideration of the unimpeded operation of said
illegal gambling.
(ii) Estrada illegally converted for his personal gain and benefit public funds in theamount of 130 million Pesos more or less, representing a portion of the 200 million Pesos
tobacco excise share allocated for the province of Ilocos Sur.
Chavit presented to the court two sets of ledgers methodically showing said payments
to Estrada. His testimony was corroborated by his aides and other bank officials who testified
as to the existence of checks paid by Chavit which landed in the accounts of persons
associated with Estrada. The paper trail of the 200 million deposited for the Erap Muslim
Youth Foundation, Inc. was also incontrovertibly established as coming from juetengcollections.
The slew of bank accounts, involving mind-boggling amounts of money andauthenticated by competent and credible bank officers, convinced the court that the entries
entered in the ledger of Chavit were not manufactured. Singson also mentioned some of
Estrada’s prime properties, which include the Boracay mansion and a casino named
Fontainebleau, Inc.

31

Sandiganbayan is an anti-graft court which has jurisdiction over criminal and civil cases involving graft andcorrupt practices and such other offences committed by public officers and employees, including those ingovernment-owned or controlled corporations, in relation to their office as may be determined by law. (Section
5, Art. XIII), 1973 Philippine Constitution as amended by section 4 (Art. XI), 1987 Philippine Constitution.

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2.

Kickbacks from the Sale of Belle Shares
The third predicate act of plunder accuses Estrada of pressuring the heads ofgovernment financial institutions, the Social Security System 32 and the Government Service
Insurance System 33 to buy Belle shares worth a total of more than P1.8 billion. Three highly
regarded personalities in the private sector testified in the plunder case accusing Estrada of
pocketing P189.7 million in commissions from the purchase of shares of Belle Corporation.
In exchange for their testimonies, Carlos Arellano, former president, chairman and CEO of
the Social Security System; Federico Pascual, former president and general manager of theGovernment Service Insurance System; and businessman Willy Ng Ocier, vice chairman ofBelle, were granted broad immunity from criminal charges.
3.

Jose Velarde Account
The prosecution presented overwhelming evidence that there were numerous deposits
of astoundingly large sums of money into the Jose Velarde account. Former Equitable-PCI
Bank Chief Trust Officer Clarissa Ocampo testified that she saw Erap sign as “Jose Velarde”
in bank documents, in particular, a debit–credit authority which facilitated the P500-million
loan to a certain Gatchalian, a crony of Estrada.
However, the prosecution failed to prove the predicate act/s or crime/s through which
the said deposits could have been acquired or amassed, except for the amount of P189 million
representing illegal commissions from the sales of Belle shares and money collected fromillegal gambling.
Unknown assets under the Velarde account (Investment Management Account (IMA)
number 101-78056-1) were unearthed only in 2008 when Banco de Oro Unibank Inc.
(BDO) 34 submitted its report on the same to the Sandiganbayan in compliance with thelatter’s forfeiture ruling issued on January 28, 2008, and a subsequent Notice to Deliver on
July 12, 2013.
Among the assets turned over were cash in the trust fund amounting to P101.3 million;
450 million shares of stock of Waterfront Philippines Inc. registered in the name of The
Wellex Group Inc.; 300 million Wellex shares of stock in the name of William T. Gatchalian;the originals of the promissory note and chattel mortgage pertaining to a P500-million loan
by Wellex from the owner of the Velarde account. 35
4.

Key to Success of the Estrada Plunder Case
Essentially, the backbone of the plunder case against former President Joseph Estrada isthe evidence presented by the prosecution—thousands of documents and 76 witnesses
ascribing a series of alleged wrongdoings to the ousted leader. More than 30 of theprosecution witnesses were officials and employees of at least 10 banks—Equitable PCI
Bank, Citibank, Philippine Savings Bank, Bank of the Philippine Islands, Security Bank,

32

A state-run, social insurance programme for non-government employees in the Philippines founded in 1957.
Its mandate is to provide and administer the following social security benefits for government employees:
compulsory life insurance, optional life insurance, retirement benefits, disability benefits for work-related
contingencies and death benefits.
34
Now successor in interest of Equitable PCI bank.
35
Court gets assets of Jose Velarde, available at <http://newsinfo.inquirer.net/587002/court-gets-assets-of-josevelarde#ixzz3nx1Zk64s> (lastaccessedon
8
October2015).
33- 126 -

Land Bank of the Philippines, Urban Bank, Export and Industry Bank, United Asia Bank and
Keppel Bank.
The bank’s vice presidents, branch managers, account officers and customer service
assistant tellers were constrained to appear before the Senate and, eventually, theSandiganbayan because they were authorized by the bank president himself, who received
the subpoena containing the list of witnesses.
The government provided legal refuge to those involved in the Erap plunder case, inparticular, Ilocos Sur Governor Luis “Chavit Singson” who was granted legal immunity by
testifying as a star witness against Estrada. Singson testified that the Erap Muslim YouthFoundation was the repository of jueteng proceeds he remitted to Erap through thefoundation’s account at Equitable PCI bank. Witnesses from the private sector involved in thesale of Belle shares were also afforded broad immunity from criminal charges.
B.

The Pork Barrel Scam
Thirteen years after the Aquino administration, the pork barrel scam surfaced. The porkbarrel scam 36 was the biggest high profile case to be brought by the administration of
President Aquino to court since he was elected to office in 2010 on an anti-corruption
platform.
The scam was first exposed in the Philippine Daily Inquirer on July 12, 2013, with thesix-part exposé of the Inquirer on the scam pointing to businesswoman Janet Lim-Napoles as
the scam's mastermind after Benhur K. Luy, her second cousin and former personal assistant,
was rescued by agents of the National Bureau of Investigation on March 22, 2013, fourmonths after he was detained by Napoles at her unit at the Pacific Plaza Towers in Fort
Bonifacio. Initially centering on Napoles' involvement in the 2004 Fertilizer Fund scam, thegovernment investigation on Luy's testimony has since expanded to cover Napoles'
involvement in a wider scam involving the misuse of PDAF funds from 2003 to 2013. 37
Then came the 16 August 2013 Commission on Audit 38 report detailing the results of athree-year investigation into the use of legislators' PDAF and other discretionary funds during
the last three years of the Arroyo administration. The report not only affirmed the Inquirer's
findings, but also pointed to more legislators being privy to misuse of their PDAF funds. 39
Described as the “mother of all scams,” this case involves Napoles, a private individual,
who established numerous foundations and NGOs and misused these entities as conduits toillegally siphon government funds. She collaborated with lawmakers and agreed on a plan tomisappropriate/embezzle funds from the Priority Development Assistance Fund (PDAF) of
lawmakers under the guise of implementing projects which turned out to be fictitious. The
scam’s modus operandi was that lawmakers would submit a list of projects to the Department
of Budget and Management (DBM) 40 for the issuance of the corresponding Special
36

Priority Development Assistance Fund (PDAF, popularly called "pork barrel"), a lump-sum discretionary fundgranted to each member of Congress for spending on priority development projects of the Philippine
government, mostly on the local level.
37
Carvajal, Nancy C. (July 12, 2013). "NBI probes P10-B scam". Philippine Daily Inquirer (Philippine Daily
Inquirer, Inc.) (last accessed on 6 October 2015).
38
COA SAO Report 2012-03, available at <http://www.gov.ph/directory/commission-on-audit/9> last accessedon 06 October 2015).
39
Id.
40
An executive body under the Office of the President of the Philippines. It is responsible for the sound and- 127 -

Allocation and Release Order (SARO). The list of projects indicated the Implementing
Agency (IA), project cost, designated non-government organizations (NGO) and/or
foundations established by Napoles as recipients of the fund. Thereafter, the lawmaker would
then endorse Napoles’ NGO/foundation to the IA to receive the funds and implement the
project. Thereafter, the IA, without competitive public bidding would award the project andenter into a Memorandum of Agreement (MOA) with the said NGO/foundation for the
supposed implementation of the project. In exchange for selecting one of Napoles’
NGO/foundation, the lawmaker received “kickbacks or commissions” from Napoles of about
40-60% of the cash value of the project. 41 In the initial report published by the Philippine
Daily Inquirer, 28 members of Congress (five senators and 23 representatives) were named
as participants in the PDAF scam. 42
Finally, in April 2014, the Office of the Ombudsman filed before the Sandiganbayan
three sets of “Information for Plunder” against Senators Enrile (docket number SB-14CRM0238), Revilla (SB-14CRM-0240) and Estrada (SB-14CRM-0239) and their co-accused—
Jessica Lucila “Gigi” Reyes (Enrile’s former chief of staff), Richard Cambe (Revilla’s chiefof staff), and Paulene Therese Mary C. Labayen (Estrada’s deputy chief of staff); Napoles,
her fugitive brother, John Ronald Lim, and her driver-bodyguard John Raymund de Asis.
These nine individuals constitute the first batch to be formally charged by the Ombudsman
since the Department of Justice and the National Bureau of Investigation filed plundercharges against them and 29 other people in 2013. 43
The three senators 44 and Napoles, the alleged brains behind the pork barrel scam, andfive other people allegedly stockpiled a combined total of P581 million in kickbacks throughthe diversion of pork barrel funds to bogus foundations from 2004 to 2012.
To expedite the trial, the Ombudsman formed three four-member teams to handle theprosecution of the nine accused. The Ombudsman based its conclusions on the paper trail
arising from either the Special Allotment Release Order (SARO), or each Implementing
Agency (IA)/NGO tandem, if one SARO was split and coursed through different agencies,
regardless of the number of projects. The panel also cited the sworn statements of whistleblower Benhur-Luy and his co-witnesses, Marina Sula and Merlina Sunas, detailing thesequence of events, the Commission on Audit report on the PDAF disbursement, and the field
verification reports with sworn statements of local government officials and purported
beneficiaries of the supposed projects who turned out to be non-existent. 45
As of 1 July 2015, the Ombudsman has indicted at least 19 lawmakers and public
officials privy to the pork barrel scam. 46 A number of investigations are currently ongoing todetermine the extent of the PDAF scam. Senators Revilla and Estrada remain incarcerated injail along with their co-accused in the Plunder cases. Recently, the Supreme Court allowed
efficient use of government resources for national development and also as an instrument for the meeting of
national socio-economic and political development goals.
41
Supra note 36.
42
Carvajal, Nancy C, 28 solons linked to scam, available at <www.inquirer.net/> (accessed on 6 October 2015).
43
Gil Cabacungan and TJ Burgonio, Napoles, 5 others charged in P10B plunder of pork, available at<http://newsinfo.inquirer.net/609215/enrile-estrada-revilla-indicted> (last accessed on 6 October 2015).
44
Senator Juan Ponce Enrile, Senator Ramon Revilla Jr. and Senator Jinggoy Estrada.
45
Cabacungan Jr., Gil C., "Ombudsman forms special team to probe ghost pork projects, available at<http://newsinfo.inquirer.net/446483/ombudsman-forms-special-team-to-probe-ghost-pork-projects>(lastaccessed on 6 October 2015).
46<http://www.ombudsman.gov.ph/index.php?home=1&pressId=Njc4> (last accessed on 6 October 2015).

- 128 -

Senator Enrile to post bail based on humanitarian reasons. 47 Napoles is serving her sentenceof life imprisonment at the Correctional Institute for Women in Mandaluyong, Manila after
the court found her guilty of illegally detaining whistle-blower Benhur Luy. 48 Napoles also
currently faces 5 counts of plunder, 74 counts of graft and 14 counts of malversation before
the Sandiganbayan anti-graft court.
The pork barrel saga showcases the anti-corruption campaign of the Philippine
government as a system comparable to a three-legged stool. The first leg was the exposé ofthe massive theft and swindling of billions of pesos of pork barrel funds, through the audit
reports of the Commission on Audit, the testimony of whistle-blowers, and the vigilant
campaign and clamour of the media and the public for a complete halt to the appropriations
and release of the congressional pork barrel. The Inquirer’s initial expose of the P10-billion
pork barrel scam was the first bomb. The filing of charges in court is the vital second leg. The
third leg, which completes the system’s solid foundations, is the trial and possible convictionof the accused in the Sandiganbayan, the nation’s graft court. 49
The instigation of official action on the pork barrel scam following the whistle-blowers’
actions is testimony to the power of public–private mobilizations and campaigns. 50
V.

RECOMMENDATION

Paragraph 2(a) of Article 12 of the United Nations Convention against Corruption
highlights the importance of promoting cooperation between law enforcement agencies andprivate entities. The purpose of the provision is to support effective identification anddetection of irregularities which could be indicative of corrupt conduct. 51
For the government sector to erase private-sector cynicism and encourage businesses/organizations to cooperate, it must enforce incentive mechanisms for the private sector,
provide for internal reporting of corruption and effective whistle-blower laws, provide
mechanisms and procedures used by law enforcement to strengthen cooperation with theprivate sector, including outreach, points of contact and confidential reporting lines, and fully
enforce anti-corruption laws that should culminate in the prosecution of hi-profile
perpetrators.” 52 Moreover, to mobilize a national movement against corruption, public–
private partnerships at the grassroots level should also be explored.

47

RosetteAdel,SupremeCourt's
decisiontogrant
Enrile'sbail,availableat<http://www.philstar.com/headlines/2015/08/20/1490224/full-text-supreme-courts-decision-grant-enriles-bail>(last accessed on 6 October 2015).
48
Ira Pedrasa, Napoles sentenced to life in prison, available at <http://www.abscbnnews.com/nation/04/14/15/napoles-sentenced-life-prison> (last accessed on 06 October 2015).
49
Yen Makabenta, Major breakthrough in anti-corruption campaign, April 2, 2014, available at<http://www.manilatimes.net/major-breakthrough-in-anti-corruption-campaign/87167/> (last accessed on 6
October 2015).
50
Garry Rodan, The Politics of Accountability in Southeast Asia: The Dominance of Moral Ideologies (2014).
51
The Philippines is a signatory to UNCAC, which was ratified in 2006 by the Philippine Senate.
52
Underscored by Guest Lecturer Adam Lurie, Senior Counsel to the Assistant Attorney General at the Criminal
Division of the United States Department of Justice during the 4th Installment of the Ombudsman Integrity
Lecture Asian Development Bank, 27 February 2014 as cited in www.rappler.com (1 March 2014).

- 129 -

A.

Adoption of Strong Whistle-Blower Laws that Align with Current International
Conventions and Bilateral Commitments
The risk of corruption is significantly heightened in environments where the reportingof wrongdoing is not supported or protected. Public and private sector employees have access
to up-to-date information concerning their workplaces’ practices, and are usually the first torecognize wrongdoing. 53
However, those who report wrongdoing may be subject to retaliation, such as
intimidation, harassment, dismissal or violence by their fellow colleagues or superiors. In
many countries, whistle-blowing is even associated with treachery or spying.
Whistle-blower protection is therefore essential to encourage the reporting of
misconduct, fraud and corruption. Giving whistle-blowers an effective protection andsecurity mechanism supports an open organizational culture where employees are not only
aware of how to report but also have confidence in the reporting procedures. It also helps
businesses prevent and detect bribery in commercial transactions. “The protection of bothpublic and private sector whistleblowers from retaliation for reporting in good faith suspected
acts of corruption is therefore integral to efforts to combat corruption, safeguard integrity,
enhance accountability, and support a clean business environment.” 54
There is currently no express obligation conferred by any statute requiring the public towhistle-blow when they encounter corrupt practices in the Philippines.
Presidential Decree No. 749 55 provides immunity for “givers of bribes [and] theiraccomplices in bribery and other graft cases against public officers”. While the title seems to
be limited to bribe givers, the decree covers “any person who voluntarily gives information”
about the commission of bribery under the RPC and violations of “other laws, rules andregulations punishing acts of graft, corruption and other forms of official abuse” (section 1).
Particular conditions must be established under the decree before immunity will be granted.
Moreover, the Ombudsman has the power to grant “immunity from criminal
prosecution to any person whose testimony or whose possession [of] evidence may benecessary to determine the truth in any hearing, inquiry or proceeding, in the furtherance of[the Ombudsman’s] constitutional functions and statutory objectives.” 56 General immunity
laws are also available such as the discharge of an accused to be a state witness under theRules of Court 57 and the Witness Protection Program (Republic Act No. 6981). 58
It is noteworthy to mention that a pending legislative measure seeking to strengthen RA
6981 (Senate Bill 2860 of March 2012) has been favourably recommended by the Senate
Committees on Justice and Human Rights, and Finance. 59 A counterpart bill in the lower
house, House Bill No. 2922, is also pending for congressional deliberation. The said bills,
however, have not been passed into law.
53

United Nations Office on Drugs and Crime, UN Anti-Corruption Toolkit, 3rd Edition, Vienna, 2004, p. 67.
Whistleblower protection: encouraging reporting, available at <http://www.oecd.org/cleangovbiz/toolkit/
50042935.pdf> last accessed on 5 October 2015.
55
PD No. 749 (1975).
56
The Ombudsman Act of 1989, Section 17.
57
Philippine Revised Rules of Court, Rule 119, Section 17.
58
An Act Providing for a Witness Protection, Security and Benefit Program and for Other purposes, Section 3.
59<http://www.senate.gov.ph/lis/bill_res.aspx?congress=15&q=SBN-2860>.
54- 130 -

The proposed bills titled as “Whistleblower Protection, Security and Benefit Act”
provide financial rewards for whistle-blowers. Upon admission into the programme, if thecase is susceptible of pecuniary estimation, such as plunder, forfeiture of ill-gotten wealth,bribery, malversation, and damage or injury to the government, the reward is P200,000. Uponthe filing of the case with the Office of the Ombudsman, the cash reward amounts toP100,000 and another P100,000 upon the completion of the testimony of the whistle-blower.
For such cases, the whistle-blower shall be entitled to an additional reward of 10 percent of
the actual amount recovered by final judgement.
If the case is not susceptible of pecuniary estimation, the reward upon admission into
the programme is P100,000; P50,000 upon the filing of the case with the Office of the
Ombudsman; and P50,000 upon completion of the testimony of the whistle-blower.
Under the substitute whistle-blowers’ bill, apart from having secure housing facilities
and relocation, the state witnesses shall be allowed to change their personal identity, which
may include physiological appearance or change of name.
Before a person is provided protection as a whistle-blower or informant for the state, heshall first execute a Memorandum of Agreement (MOA) which shall set forth his/her
responsibilities. Substantial breach of the MOA shall be a ground for the termination of theprotection provided under the Act.
If ultimately enacted and adequately implemented, this legislation protecting whistleblowers can become one of the most effective tools to support Philippine public and private
anti-corruption initiatives. 60
B.

Full Enforcement of Anti-Corruption Laws that Should Culminate in the
Successful Prosecution of the Offenders
Corruption becomes more widespread when government lacks sincerity to act onreported corruption. This is true in the public as well as in the private sector. 61 The present
legislative framework for fighting corruption is complicated and is not effectively enforcedby the weak and non-cooperative law enforcement agencies. 62 According to Marcelo, 63 “thejudicial structure is incomplete because of its inability to secure swift punishment for the
guilty.”A recent study by the Office of the Ombudsman cites that cases take 10.2 years on the
average in the Sandiganbayan, from the filing of information to the rendition of a decision.
Data from the PCIJ’s MoneyPolitics Online website shows that from 2010 to 2012, a total
1,132 cases were filed against public officials before the Sandiganbayan, 836 of which still
have a “pending” status. 64
60David Banisar, “Whistleblowing: International Standards and Developments” in Sandoval, I. (editor),
Corruption and Transparency: Debating the Frontiers between State, Market and Society, World Bank-Institutefor Social Research, UNAM, Washington, D.C. 2011.
61
Whistleblowing in the Philippines: Awareness, Attitudes and Structures, Asian Institute of Management(2006).
62
Ex-Ombudsman Marcelo: Corruption cases stagnating. February 5, 2014 · Posted in: Access toInformation, Civil Society, Freedom of Information, General, Governance, Human Rights, available at<http://pcij.org/blog/2014/02/05/ex-ombudsman-marcelo-corruption-cases-stagnating>.
63
Former Ombudsman.
64<http://moneypoliticstransparency.org/>.

- 131 -

Part of the response to this situation is the creation of independent and specialized
agencies to deal with corruption. The Philippines employs this system, with the Office of the
Ombudsman as an example.
A new system of handling cases may be also adapted, new investigators should be
recruited, the Freedom of Information bill 65 should be passed, and the president should
strengthen the oversight commissions and the judiciary in order to remove the hold of theelites on them.
Overall, the Philippine government should demonstrate political will to fight corruption
by fast-tracking high-profile cases and ensuring that grants of immunity do not create asituation of impunity. 66 The goal is to change the current perception of corruption in thePhilippines—from a “low-risk, high-reward” activity to a “high-risk, low-reward activity.” 67
C.

Provision of Adequate Incentive Mechanisms for the Private Sector
In particular, the Integrity Initiative, a major flagship project of the private sector, isenvisioned to lead to fundamental, long term and institutionalized reforms, and transform theway business is conducted and corruption is fought in the Philippines.68 The need to elevatethe initiative to a new level is imperative. The Aquino government should consider signing an
executive order that will require all private contractors to sign integrity pledges prior totransacting with the government. “It is important that the government get on board to provide
recognition to those compliant companies so that the latter would not feel that they are at acompetitive disadvantage if they’re competing against other companies who are not soconstrained in the way they do business.” 69
D.

Develop More Public–Private Partnerships at the Local Level
The challenge in the coming years is to ensure that it is not only a handful of private
sector organizations that actively participate in combating corruption. To reduce corruption, awidespread commitment by the private sector, regardless of size, industry, and location isessential. Hence, public–private anti-corruption initiatives at the local level should likewise
be explored and strengthened. If we are to engage people from all over the country andmobilize a national movement against corruption, joint initiatives should likewise start fromthe grassroots level. 70

65

The proposed Freedom of Information (FOI) Act aims to mandate the disclosure of public documents. The
proposed bill also outlines the exceptions for public disclosure and the procedures for accessing public
documents. On March 10, 2014, the Senate passed the FOI bill on third and final reading, with 22 affirmative
votes. On March 4, 2015, the bill was passed by the House Committee on Appropriations; as of this date, it isawaiting 2nd reading.
66
Robert Klitgaard, Ronald MacLean-Abaroa, and H. Lindsey Parris, Jr., Corrupt Cities (Oakland: ICS Press,
2000).
67
Vinay Bhargava, Country Director, Philippines, The World Bank, Combating Corruption in the Philippines,
available at <http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN019123.pdf> 9 (lastaccessed on 5 October 2015).
68
A
Call
for
Integrity,
Editorial,
Philippine
Daily
Inquirer,availableat<htttp://www.opinion.inquirer.net/37432/a-call-for-integrity> (last accessed on 7 October 2015).
69
Id.
70
<http://www.cipe.org/blog/2014/09/04/local-level-governance-in-the-philippines-and-nigeria/#.VhJH__
nvOM8>.

- 132 -

VI.

CONCLUSION

Corruption requires a multi-faceted approach, as well as short-term and long-term
approaches. 71 It also appears very clearly that an effective anti-corruption strategy must be
integrated and holistic. 72 Global experience suggests that efforts to combat systemic
corruption have to go beyond ad hoc, stand-alone reforms of the government since they are
unlikely to achieve much progress, at least in the short term. No matter how committed ourgovernment will be, still, the most effective anti-corruption programmes involve a coalitionof public and private stakeholders fostering institutional reforms that promote ethicalbusiness practice and good governance. 73
A national anti-corruption strategy needs to tackle many battle-fronts, and acknowledge
that a comprehensive programme to combat corruption will take many years to implement.
The government's commitment to fighting corruption and its emerging partnership should beanchored on a collaborative approach involving government, business, media, and NGOs. 74

71

BEN W. HEINEMAN, JR. & FRITZ HEIMANN, The Long War Against Corruption, 85 FOREIGN
AFFAIRS, 77 (2006).
72
Peter, Langseth, Prevention: An Effective Tool to Reduce Corruption (Paper presented at the ISPAC
conference on Responding to the Challenge of Corruption, 19 November 1999, Milan) available at<https://www.unodc.org/pdf/crime/gpacpublications/cicp2.pdf> (last accessed on 5 October 2015).
73
Kim Eric Bettcher and Boris Melnikov, Combating Corruption: A Private Sector Approach, January 2011,
available at www.cipe.org (last accessed on 6 October 2015).
74“World Bank, Combating Corruption in the Philippines: An Update,” available at<https://openknowledge.worldbank.org/handle/10986/15435> (last accessed on 6 October 2015).

- 133 -

APPENDIX AI.

PHILIPPINES, 1996-2013 AGGREGATE INDICATOR: CONTROL OF
CORRUPTION- 134 -

II. THE 2014/15 SWS SURVEY OF ENTERPRISES ON CORRUPTION:
RECORD-LOW 32% OF EXECUTIVES HAVE PERSONAL KNOWLEDGE OFCORRUPT TRANSACTION WITH GOVERNMENT IN THE LAST 3 MONTHS
A. Chart I- 135 -

B. Chart 2

C. Chart 3- 136 -

D. Chart 4

E. Chart 5- 137 -

APPENDIX B

I.

2013-2014 GLOBAL COMPETITIVENESS REPORT- 138 -

APPENDIX CI.

CORRUPTION PERCEPTIONS INDEX RESULTS: TABLE AND RANKINGSThe Corruption Perceptions Index ranks countries and territories based on how corrupt their
public sector is perceived to be. A country or territory’s score indicates the perceived level of
public sector corruption on a scale of 0 (highly corrupt) to 100 (very clean). A country or
territory's rank indicates its position relative to the other countries and territories in the index.
This year's index includes 175 countries and territories. Click on the column headings to sort theresults, or use the drop-down menu to view results by region. Note that N/A means a country
was not included in the index during a particular year.
Rank
1
2
3
4
5
5
7
8
9
10
11
12
12
14
15
15
17
17
17
17
21
21
23
24
25
26
26
26
29
30
31
31
31
31
35

Country
Denmark
New ZealandFinlandSwedenNorwaySwitzerland
Singapore
Netherlands
Luxembourg
CanadaAustralia
Germany
IcelandUnited Kingdom
BelgiumJapan
BarbadosHong Kong
IrelandUnited States
Chile
Uruguay
Austria
BahamasUnited Arab Emirates
Estonia
FranceQatar
Saint Vincent and the Grenadines
BhutanBotswana
CyprusPortugal
Puerto Rico
Poland- 139 -

2014
92
91
89
87
86
86
84
83
82
81
80
79
79
78
76
76
74
74
74
74
73
73
72
71
70
69
69
69
67
65
63
63
63
63
61

2013
91
91
89
89
86
85
86
83
80
81
81
78
78
76
75
74
75
75
72
73
71
73
69
71
69
68
71
68
62
63
64
63
62
62
60

2012
90
90
90
88
85
86
87
84
80
84
85
79
82
74
75
74
76
77
69
73
72
72
69
71
68
64
71
68
62
63
65
66
63
63
58

Rank
35
37
37
39
39
39
42
43
43
43
43
47
47
47
50
50
50
53
54
55
55
55
55
55
55
61
61
63
64
64
64
67
67
69
69
69
69
69
69
69
76
76
78
79
80
80
80
80
80
85

Country
TaiwanIsraelSpain
Dominica
Lithuania
Slovenia
Cape Verde
Korea (South)
LatviaMalta
Seychelles
Costa Rica
Hungary
Mauritius
Georgia
Malaysia
Samoa
Czech Republic
Slovakia
BahrainJordanLesothoNamibia
RwandaSaudi Arabia
Croatia
Ghana
Cuba
Oman
The FYR of Macedonia
TurkeyKuwaitSouth Africa
BrazilBulgaria
GreeceItaly
Romania
SenegalSwazilandMontenegro
Sao Tome and Principe
SerbiaTunisia
Benin
Bosnia and Herzegovina
El Salvador
Mongolia
MoroccoBurkina Faso

2014
61
60
60
58
58
58
57
55
55
55
55
54
54
54
52
52
52
51
50
49
49
49
49
49
49
48
48
46
45
45
45
44
44
43
43
43
43
43
43
43
42
42
41
40
39
39
39
39
39
38

- 140 -

2013
61
61
59
58
57
57
58
55
53
56
54
53
54
52
49
50
#N/A
48
47
48
45
49
48
53
46
48
46
46
47
44
50
43
42
42
41
40
43
43
41
39
44
42
42
41
36
42
38
38
37
38

2012
61
60
65
58
54
61
60
56
49
57
52
54
55
57
52
49
#N/A
49
46
51
48
45
48
53
44
46
45
48
47
43
49
44
43
43
41
36
42
44
36
37
41
42
39
41
36
42
38
36
37
38

Rank
85
85
85
85
85
85
85
85
94
94
94
94
94
94
100
100
100
103
103
103
103
107
107
107
110
110
110
110
110
115
115
115
115
119
119
119
119
119
124
124
126
126
126
126
126
126
126
133
133
133

Country
India
Jamaica
Peru
Philippines
Sri Lanka
ThailandTrinidad and Tobago
ZambiaArmenia
Colombia
Egypt
Gabon
Liberia
PanamaAlgeria
China
Suriname
Bolivia
MexicoMoldova
Niger
Argentina
DjiboutiIndonesia
Albania
Ecuador
Ethiopia
KosovoMalawi
Côte d´Ivoire
Dominican Republic
Guatemala
Mali
BelarusMozambique
Sierra Leone
Tanzania
Vietnam
Guyana
Mauritania
Azerbaijan
GambiaHonduras
Kazakhstan
Nepal
Pakistan
Togo
Madagascar
Nicaragua
Timor-Leste

2014
38
38
38
38
38
38
38
38
37
37
37
37
37
37
36
36
36
35
35
35
35
34
34
34
33
33
33
33
33
32
32
32
32
31
31
31
31
31
30
30
29
29
29
29
29
29
29
28
28
28

- 141 -

2013
36
38
38
36
37
35
38
38
36
36
32
34
38
35
36
40
36
34
34
35
34
34
36
32
31
35
33
33
37
27
29
29
28
29
30
30
33
31
27
30
28
28
26
26
31
28
29
28
28
30

2012
36
38
38
34
40
37
39
37
34
36
32
35
41
38
34
39
37
34
34
36
33
35
36
32
33
32
33
34
37
29
32
33
34
31
31
31
35
31
28
31
27
34
28
28
27
27
30
32
29
33

Rank
136
136
136
136
136
136
142
142
142
145
145
145
145
145
150
150
152
152
154
154
156
156
156
159
159
161
161
161
161
161
166
166
166
169
170
171
172
173
174
174

Country
Cameroon
Iran
Kyrgyzstan
LebanonNigeria
RussiaComoros
UgandaUkraineBangladesh
GuineaKenya
Laos
Papua New Guinea
Central African Republic
Paraguay
Congo, Republic of
Tajikistan
Chad
Congo, Democratic Republic ofCambodia
MyanmarZimbabwe
BurundiSyria
AngolaGuinea-Bissau
Haiti
Venezuela
Yemen
Eritrea
Libya
Uzbekistan
Turkmenistan
Iraq
South Sudan
Afghanistan
Sudan
Korea (North)
Somalia- 142 -

2014
27
27
27
27
27
27
26
26
26
25
25
25
25
25
24
24
23
23
22
22
21
21
21
20
20
19
19
19
19
19
18
18
18
17
16
15
12
11
8
8

2013
25
25
24
28
25
28
28
26
25
27
24
27
26
25
25
24
22
22
19
22
20
21
21
21
17
23
19
19
20
18
20
15
17
17
16
14
8
11
8
8

2012
26
28
24
30
27
28
28
29
26
26
24
27
21
25
26
25
26
22
19
21
22
15
20
19
26
22
25
19
19
23
25
21
17
17
18
#N/A
8
13
8
8

APPENDIX DI.

STAR REPORT ON ERAP PLUNDER CASE

Joseph Ejercito Estrada
Case Control Number:
66
Description:
In September 2007, Joseph Estrada was convicted by the Philippine Sandiganbayan (anti-graft court) of the crime ofPlunder. According to an unofficial copy of the court decision obtained through the website of the Chan and Robles
law firm, Mr. Estrada was accused in an Amended Information filed on April 19, 2001 of having amassed, whileserving as President from 1998 to 2001, $87.3 million in unexplained wealth and that the funds were derived frombribes, kick-backs, and protection money collected from illegal gambling operators. The chief government witness
against him in the Plunder trial was Governor Luis "Chavit" Singson, his co-conspirator in the collection ofprotection money from illegal gambling operators. The court stated that some of the illegal proceeds had been
deposited in Mr. Estrada's Erap Muslim Youth Foundation and a bank account that Mr. Estrada opened in the falsename of "Jose Velarde." He was also convicted of having coerced two government agencies to purchase shares in agaming company owned by an associate and collecting commissions from the sale of the shares. In addition to asentence of life imprisonment, Mr. Estrada was ordered to forfeit his mansion and more than $15 million in assets,
including the illicit proceeds from the illegal gambling operators that had been transferred to the account of the Erap
Muslim Youth Foundation and the "Jose Velarde" account. One month after his conviction, President Arroyo
granted him a conditional pardon, but the Sandiganbayan's ruling on property and asset forfeiture remain in effect.
Type of Illicit activity involving Public Official :Abuse of Power, Bribes (kick-backs), Money Laundering
Impediments to investigation:
Fake Name ("Jose Velarde" bank account); Multiple Bank Accounts.
Most recent legal action against Public Official?:
Other legal action/ other prosecutions:Region:EAPCountry of Public Official:
Philippines
Jurisdiction(s) of legal action:
Philippines
Sources:
People of the Philippines v. Joseph Ejercito Estrada, et al. (Sandiganbayan, Criminal Case No. 26558, Sept. 12,2007) accessed at
http://www.chanrobles.com/cralawsandiganbayandecisionconvictionofestradaforplunder2007.html Malacanan
Palace (Manila), By the President of the Philippines, Pardon of Joseph Ejercito Estrada, Oct. 25, 2007, available at- 143 -

the website of the Philippine Office of the Press Secretary (obtained via the US Library of Congress, Directorate ofLegal Research)
Position of Public Official during scheme:
President
Is there a pending case or appeals?:
No
UNCAC Articles(s) Implicated:
Art. 15
Art. 19
Art. 23
Money laundering Implicated?:
Yes
Year scheme began:
1998- 144 -

APPENDIX E
15 WHISTLE-BLOWERS WITH LINKS TO JANET LIM NAPOLES GAVESWORN STATEMENTS TO THE NATIONAL BUREAU OF INVESTIGATION,
THE OMBUDSMAN AND THE SENATE BLUE RIBBON COMMITTEE.

I.

- 145 -

APPENDIX FI.
PRESIDENTIAL DECREE NO. 749 GRANTING IMMUNITY FROMPROSECUTION TO GIVERS OF BRIBES AND OTHER GIFTS AND TO THEIRACCOMPLICES IN BRIBERY AND OTHER GRAFT CASES AGAINST PUBLIC
OFFICERSWHEREAS, public office is a public trust: public officers are but servants of the people, whomthey must serve with utmost fidelity and integrity;
WHEREAS, it has heretofore been virtually impossible to secure the conviction and removal of
dishonest public servants owing to the lack of witnesses: the bribe or giftgivers being always reluctant totestify against the corrupt public officials and employees concerned for fear of being indicted andconvicted themselves of bribery and corruption;
WHEREAS, it is better by far and more socially desirable, as well as just, that the bribe or gift
giver be granted immunity from prosecution so that he may freely testify as to the official corruption, thanthat the official who receives the bribe or gift should be allowed to go free, insolently remaining in public
office, and continuing with his nefarious and corrupt practices, to the great detriment of the public service
and the public interest.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue ofthe powers in me vested by the Constitution, do hereby decree and order that:
Section 1. Any person who voluntarily gives information about any violation of Articles 210, 211
and 212 of the Revised Penal Code, Republic Act Numbered Three Thousand Nineteen, as amended:
Section 345 of the Internal Revenue Code and Section 3604 of the Tariff and Customs Code and otherprovisions of the said Codes penalizing abuse or dishonesty on the part of the public officials concerned;
and other laws, rules and regulations punishing acts of graft, corruption and other forms of official abuse;
and who willingly testifies against any public official or employee for such violation shall be exempt fromprosecution or punishment for the offense with reference to which his information and testimony were
given, and may plead or prove the giving of such information and testimony in bar of such prosecution:
Provided, that this immunity may be enjoyed even in cases where the information and testimony are given
against a person who is not a public official but who is a principal, or accomplice, or accessory in thecommission of any of the above-mentioned violations: Provided further, that this immunity may beenjoyed by such informant or witness notwithstanding that he offered or gave the bribe or gift to the
public official or is an accomplice for such gift or bribegiving; and Provided, finally, that the following
conditions concur:
1. The information must refer to consummated violations of any of the abovementioned
provisions of law, rules and regulations;2. The information and testimony are necessary for the conviction of the accused public officer; 3.
Such information and testimony are not yet in the possession of the State;
4. Such information and testimony can be corroborated on its material points; and- 146 -

5. The informant or witness has not been previously convicted of a crime involving moral
turpitude.
Section 2. The immunity granted hereunder shall not attach should it turn out subsequently thatthe information and/or testimony is false and malicious or made only for the purpose of harassing,molesting or in any way prejudicing the public officer denounced. In such a case, the public officer sodenounced shall be entitled to any action, civil administrative or criminal, against said informant or
witness: Provided, however, That such action may be commenced only after the dismissal of the caseagainst the denounced public officer after preliminary investigation or after the latter’s acquittal by acompetent court. The prescriptive periods for the various actions under the provisions of this section shallstart to run from the time such actions may be commenced as herein provided. (As amended by BP Blg.
242, approved Nov. 11, 1982.)
Section 3. All preliminary investigations conducted by a prosecuting fiscal, judge or committee,
and all proceedings undertaken in connection therewith, shall be strictly confidential or private in order toprotect the reputation of the official under investigation in the event that the report proves to be
unfounded or no prima facie case is established.
Section 4. All acts, decrees and rules and regulations inconsistent with the provisions of thisDecree are hereby repealed or modified accordingly. Section 5. This Decree shall take effect immediately.
DONE in the City of Manila, this 18th day of July, in the year of Our Lord, nineteen hundred andseventy-five.

- 147 -

APPENDIX GI.

REPUBLIC ACT NO. 6770

AN ACT PROVIDING FOR THE FUNCTIONAL AND STRUCTURAL ORGANIZATION OF
THE OFFICE OF THE OMBUDSMAN, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::
Section 1. Title. — This Act shall be known as "The Ombudsman Act of 1989".
Section 2. Declaration of Policy. — The State shall maintain honesty and integrity in the public service
and take positive and effective measures against graft and corruption.
Public office is a public trust. Public officers and employees must at all times be accountable to thepeople, serve them with utmost responsibility, integrity, loyalty, efficiency, act with patriotism and justiceand lead modest lives.
Section 3. Office of the Ombudsman. — The Office of the Ombudsman shall include the Office of theOverall Deputy, the Office of the Deputy for Luzon, the Office of the Deputy for the Visayas, the Officeof the Deputy for Mindanao, the Office of the Deputy for the Armed Forces, and the Office of the Special
Prosecutor. The President may appoint other Deputies as the necessity for it may arise, as recommended
by the Ombudsman.
Section 4. Appointment. — The Ombudsman and his Deputies, including the Special Prosecutor, shall be
appointed by the President from a list of at least twenty-one (21) nominees prepared by the Judicial and
Bar Council, and from a list of three (3) nominees for each vacancy thereafter, which shall be filled within
three (3) months after it occurs, each of which list shall be published in a newspaper of general circulation.
In the organization of the Office of the Ombudsman for filling up of positions therein, regional, culturalor ethnic considerations shall be taken into account to the end that the Office shall be as much as possible
representative of the regional, ethnic and cultural make-up of the Filipino nation.
Section 5. Qualifications. — The Ombudsman and his Deputies, including the Special Prosecutor, shallbe natural-born citizens of the Philippines, at least forty (40) years old, of recognized probity andindependence, members of the Philippine Bar, and must not have been candidates for any elective
national or local office in the immediately preceding election whether regular or special. The Ombudsman
must have, for ten (10) years or more, been a judge or engaged in the practice of law in the Philippines.
Section 6. Rank and Salary. — The Ombudsman and his Deputies shall have the same ranks, salaries
and privileges as the Chairman and members, respectively, of a Constitutional Commission. Their salaries
shall not be decreased during their term of office.
The members of the prosecution, investigation and legal staff of the Office of the Ombudsman shallreceive salaries which shall not be less than those given to comparable positions in any office in the
Government.
Section 7. Term of Office. — The Ombudsman and his Deputies, including the Special Prosecutor, shallserve for a term of seven (7) years without reappointment.

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Section 8. Removal; Filling of Vacancy. —(1) In accordance with the provisions of Article XI of the Constitution, the Ombudsman may beremoved from office on impeachment for, and conviction of, culpable violation of theConstitution, treason, bribery, graft and corruption, other high crimes, or betrayal of public trust.
(2) A Deputy or the Special Prosecutor, may be removed from office by the President for any of
the grounds provided for the removal of the Ombudsman, and after due process.
(3) In case of vacancy in the Office of the Ombudsman due to death, resignation, removal or
permanent disability of the incumbent Ombudsman, the Overall Deputy shall serve as Acting
Ombudsman in a concurrent capacity until a new Ombudsman shall have been appointed for a
full term.n case the Overall Deputy cannot assume the role of Acting Ombudsman, the President
may designate any of the Deputies, or the Special Prosecutor, as Acting Ombudsman.
(4) In case of temporary absence or disability of the Ombudsman, the Overall Deputy shallperform the duties of the Ombudsman until the Ombudsman returns or is able to perform his
duties.
Section 9. Prohibitions and Disqualifications. — The Ombudsman, his Deputies and the Special
Prosecutor shall not, during their tenure, hold any other office or employment. They shall not, during said
tenure, directly or indirectly practice any other profession, participate in any business, or be financiallyinterested in any contract with, or in any franchise, or special privilege granted by the Government or any
subdivision, agency or instrumentality thereof, including government-owned or controlled corporations or
their subsidiaries. They shall strictly avoid conflict of interest in the conduct of their office. They shall not
be qualified to run for any office in the election immediately following their cessation from office. They
shall not be allowed to appear or practice before the Ombudsman for two (2) years following theircessation from office.
No spouse or relative by consanguinity or affinity within the fourth civil degree and no law, business or
professional partner or associate of the Ombudsman, his Deputies or Special Prosecutor within one (1)year preceding the appointment may appear as counsel or agent on any matter pending before the Officeof the Ombudsman or transact business directly or indirectly therewith.
This disqualification shall apply during the tenure of the official concerned. This disqualification likewise
extends to the law, business or professional firm for the same period.
Section 10. Disclosure of Relationship. — It shall be the duty of the Ombudsman, his Deputies,
including the Special Prosecutor to make under oath, to the best of their knowledge and/or information, apublic disclosure of the identities of, and their relationship with the persons referred to in the preceding
section.
The disclosure shall be filed with the Office of the President and the Office of the Ombudsman before theappointee assumes office and every year thereafter. The disclosures made pursuant to this section shallform part of the public records and shall be available to any person or entity upon request.
Section 11. Structural Organization. — The authority and responsibility for the exercise of the mandateof the Office of the Ombudsman and for the discharge of its powers and functions shall be vested in the
Ombudsman, who shall have supervision and control of the said office.

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(1) The Office of the Ombudsman may organize such directorates for administration and allied
services as may be necessary for the effective discharge of its functions. Those appointed as
directors or heads shall have the rank and salary of line bureau directors.
(2) The Office of the Overall Deputy shall oversee and administer the operations of the different
offices under the Office of Ombudsman.t shall likewise perform such other functions and duties
assigned to it by the Ombudsman.
(3) The Office of the Special Prosecutor shall be composed of the Special Prosecutor and his
prosecution staff. The Office of the Special Prosecutor shall be an organic component of the
Office of the Ombudsman and shall be under the supervision and control of the Ombudsman.
(4) The Office of the Special Prosecutor shall, under the supervision and control and upon theauthority of the Ombudsman, have the following powers:(a) To conduct preliminary investigation and prosecute criminal cases within thejurisdiction of the Sandiganbayan;(b) To enter into plea bargaining agreements; and(c) To perform such other duties assigned to it by the Ombudsman.
The Special Prosecutor shall have the rank and salary of a Deputy Ombudsman.
(5) The position structure and staffing pattern of the Office of the Ombudsman, including the
Office of the Special Prosecutor, shall be approved and prescribed by the Ombudsman. The
Ombudsman shall appoint all officers and employees of the Office of the Ombudsman, including
those of the Office of the Special Prosecutor, in accordance with the Civil Service Law, rules andregulations.
Section 12. Official Stations. — The Ombudsman, the Overall Deputy, the Deputy for Luzon, and the
Deputy for the Armed Forces shall hold office in Metropolitan Manila; the Deputy for the Visayas, inCebu City; and the Deputy for Mindanao, in Davao City. The Ombudsman may transfer their stations
within their respective geographical regions, as public interest may require.
Section 13. Mandate. — The Ombudsman and his Deputies, as protectors of the people, shall act
promptly on complaints filed in any form or manner against officers or employees of the Government, orof any subdivision, agency or instrumentality thereof, including government-owned or controlled
corporations, and enforce their administrative, civil and criminal liability in every case where theevidence warrants in order to promote efficient service by the Government to the people.
Section 14. Restrictions. — No writ of injunction shall be issued by any court to delay an investigation
being conducted by the Ombudsman under this Act, unless there is a prima facie evidence that the subject
matter of the investigation is outside the jurisdiction of the Office of the Ombudsman.
No court shall hear any appeal or application for remedy against the decision or findings of the
Ombudsman, except the Supreme Court, on pure question of law.

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Section 15. Powers, Functions and Duties. — The Office of the Ombudsman shall have the following
powers, functions and duties:(1) Investigate and prosecute on its own or on complaint by any person, any act or omission of
any public officer or employee, office or agency, when such act or omission appears to be illegal,
unjust, improper or inefficient.t has primary jurisdiction over cases cognizable by the
Sandiganbayan and, in the exercise of this primary jurisdiction, it may take over, at any stage,
from any investigatory agency of Government, the investigation of such cases;(2) Direct, upon complaint or at its own instance, any officer or employee of the Government, orof any subdivision, agency or instrumentality thereof, as well as any government-owned orcontrolled corporations with original charter, to perform and expedite any act or duty required bylaw, or to stop, prevent, and correct any abuse or impropriety in the performance of duties;(3) Direct the officer concerned to take appropriate action against a public officer or employee at
fault or who neglect to perform an act or discharge a duty required by law, and recommend his
removal, suspension, demotion, fine, censure, or prosecution, and ensure compliance therewith;or enforce its disciplinary authority as provided in Section 21 of this Act: provided, that therefusal by any officer without just cause to comply with an order of the Ombudsman to remove,suspend, demote, fine, censure, or prosecute an officer or employee who is at fault or who
neglects to perform an act or discharge a duty required by law shall be a ground for disciplinary
action against said officer;(4) Direct the officer concerned, in any appropriate case, and subject to such limitations as it may
provide in its rules of procedure, to furnish it with copies of documents relating to contracts ortransactions entered into by his office involving the disbursement or use of public funds orproperties, and report any irregularity to the Commission on Audit for appropriate action;(5) Request any government agency for assistance and information necessary in the discharge of
its responsibilities, and to examine, if necessary, pertinent records and documents;(6) Publicize matters covered by its investigation of the matters mentioned in paragraphs (1), (2),(3) and (4) hereof, when circumstances so warrant and with due prudence: provided, that the
Ombudsman under its rules and regulations may determine what cases may not be made public:
provided, further, that any publicity issued by the Ombudsman shall be balanced, fair and true;(7) Determine the causes of inefficiency, red tape, mismanagement, fraud, and corruption in the
Government, and make recommendations for their elimination and the observance of highstandards of ethics and efficiency;(8) Administer oaths, issue subpoena and subpoena duces tecum, and take testimony in any
investigation or inquiry, including the power to examine and have access to bank accounts andrecords;(9) Punish for contempt in accordance with the Rules of Court and under the same procedure andwith the same penalties provided therein;(10) Delegate to the Deputies, or its investigators or representatives such authority or duty as shallensure the effective exercise or performance of the powers, functions, and duties herein or
hereinafter provided;- 151 -

(11) Investigate and initiate the proper action for the recovery of ill-gotten and/or unexplained
wealth amassed after February 25, 1986 and the prosecution of the parties involved therein.
The Ombudsman shall give priority to complaints filed against high ranking government officials and/or
those occupying supervisory positions, complaints involving grave offenses as well as complaints
involving large sums of money and/or properties.
Section 16. Applicability. — The provisions of this Act shall apply to all kinds of malfeasance,
misfeasance, and non-feasance that have been committed by any officer or employee as mentioned in
Section 13 hereof, during his tenure of office.
Section 17. Immunities. — In all hearings, inquiries, and proceedings of the Ombudsman, including
preliminary investigations of offenses, nor person subpoenaed to testify as a witness shall be excusedfrom attending and testifying or from producing books, papers, correspondence, memoranda and/or otherrecords on the ground that the testimony or evidence, documentary or otherwise, required of him, may
tend to incriminate him or subject him to prosecution: provided, that no person shall be prosecuted
criminally for or on account of any matter concerning which he is compelled, after having claimed theprivilege against self-incrimination, to testify and produce evidence, documentary or otherwise.
Under such terms and conditions as it may determine, taking into account the pertinent provisions of theRules of Court, the Ombudsman may grant immunity from criminal prosecution to any person whose
testimony or whose possession and production of documents or other evidence may be necessary to
determine the truth in any hearing, inquiry or proceeding being conducted by the Ombudsman or under its
authority, in the performance or in the furtherance of its constitutional functions and statutory objectives.
The immunity granted under this and the immediately preceding paragraph shall not exempt the witness
from criminal prosecution for perjury or false testimony nor shall he be exempt from demotion or removalfrom office.
Any refusal to appear or testify pursuant to the foregoing provisions shall be subject to punishment forcontempt and removal of the immunity from criminal prosecution.
Section 18. Rules of Procedure. —(1) The Office of the Ombudsman shall promulgate its rules of procedure for the effective
exercise or performance of its powers, functions, and duties.
(2) The rules of procedure shall include a provision whereby the Rules of Court are madesuppletory.
(3) The rules shall take effect after fifteen (15) days following the completion of their publicationin the Official Gazette or in three (3) newspapers of general circulation in the Philippines, one ofwhich is printed in the national language.
Section 19. Administrative Complaints. — The Ombudsman shall act on all complaints relating, but notlimited to acts or omissions which:(1) Are contrary to law or regulation;(2) Are unreasonable, unfair, oppressive or discriminatory;- 152 -

(3) Are inconsistent with the general course of an agency's functions, though in accordance withlaw;
(4) Proceed from a mistake of law or an arbitrary ascertainment of facts;(5) Are in the exercise of discretionary powers but for an improper purpose; or(6) Are otherwise irregular, immoral or devoid of justification.
Section 20. Exceptions. — The Office of the Ombudsman may not conduct the necessary investigation of
any administrative act or omission complained of if it believes that:(1) The complainant has an adequate remedy in another judicial or quasi-judicial body;(2) The complaint pertains to a matter outside the jurisdiction of the Office of the Ombudsman;(3) The complaint is trivial, frivolous, vexatious or made in bad faith;(4) The complainant has no sufficient personal interest in the subject matter of the grievance; or(5) The complaint was filed after one (1) year from the occurrence of the act or omission
complained of.
Section 21. Official Subject to Disciplinary Authority; Exceptions. — The Office of the Ombudsman
shall have disciplinary authority over all elective and appointive officials of the Government and its
subdivisions, instrumentalities and agencies, including Members of the Cabinet, local government,
government-owned or controlled corporations and their subsidiaries, except over officials who may beremoved only by impeachment or over Members of Congress, and the Judiciary.
Section 22. Investigatory Power. — The Office of the Ombudsman shall have the power to investigate
any serious misconduct in office allegedly committed by officials removable by impeachment, for the
purpose of filing a verified complaint for impeachment, if warranted.
In all cases of conspiracy between an officer or employee of the government and a private person, theOmbudsman and his Deputies shall have jurisdiction to include such private person in the investigationand proceed against such private person as the evidence may warrant. The officer or employee and theprivate person shall be tried jointly and shall be subject to the same penalties and liabilities.
Section 23. Formal Investigation. —(1) Administrative investigations conducted by the Office of the Ombudsman shall be inaccordance with its rules of procedure and consistent with due process.
(2) At its option, the Office of the Ombudsman may refer certain complaints to the proper
disciplinary authority for the institution of appropriate administrative proceedings against erring
public officers or employees, which shall be determined within the period prescribed in the civil
service law. Any delay without just cause in acting on any referral made by the Office of the
Ombudsman shall be a ground for administrative action against the officers or employees to- 153 -

whom such referrals are addressed and shall constitute a graft offense punishable by a fine of notexceeding Five thousand pesos (P5,000.00).
(3) In any investigation under this Act the Ombudsman may: (a) enter and inspect the premises ofany office, agency, commission or tribunal; (b) examine and have access to any book, record, file,
document or paper; and (c) hold private hearings with both the complaining individual and theofficial concerned.
Section 24. Preventives Suspension. — The Ombudsman or his Deputy may preventively suspend any
officer or employee under his authority pending an investigation, if in his judgment the evidence of guilt
is strong, and (a) the charge against such officer or employee involves dishonesty, oppression or grave
misconduct or neglect in the performance of duty; (b) the charges would warrant removal from theservice; or (c) the respondent's continued stay in office may prejudice the case filed against him.
The preventive suspension shall continue until the case is terminated by the Office of the Ombudsman but
not more than six (6) months, without pay, except when the delay in the disposition of the case by the
Office of the Ombudsman is due to the fault, negligence or petition of the respondent, in which case theperiod of such delay shall not be counted in computing the period of suspension herein provided.
Section 25. Penalties. —(1) In administrative proceedings under Presidential Decree No. 807, the penalties and rules
provided therein shall be applied.
(2) In other administrative proceedings, the penalty ranging from suspension without pay for one(1) year to dismissal with forfeiture of benefits or a fine ranging from Five thousand pesos(P5,000.00) to twice the amount malversed, illegally taken or lost, or both at the discretion of the
Ombudsman, taking into consideration circumstances that mitigate or aggravate the liability ofthe officer or employee found guilty of the complaint or charges.
Section 26. Inquiries. —(1) The Office of the Ombudsman shall inquire into acts or omissions of a public officer,
employee, office or agency which, from the reports or complaints it has received, theOmbudsman or his Deputies consider to be:(a) contrary to law or regulation;(b) unreasonable, unfair, oppressive, irregular or inconsistent with the general course of
the operations and functions of a public officer, employee, office or agency;(c) an error in the application or interpretation of law, rules or regulations, or a gross or
palpable error in the appreciation of facts;(d) based on improper motives or corrupt considerations;(e) unclear or inadequately explained when reasons should have been revealed; or(f) inefficient performed or otherwise objectionable.

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(2) The Officer of the Ombudsman shall receive complaints from any source in whatever form
concerning an official act or omission.t shall act on the complaint immediately and if it finds thesame entirely baseless, it shall dismiss the same and inform the complainant of such dismissal
citing the reasons therefor. If it finds a reasonable ground to investigate further, it shall first
furnish the respondent public officer or employee with a summary of the complaint and require
him to submit a written answer within seventy-two (72) hours from receipt thereof. If the answer
is found satisfactory, it shall dismiss the case.
(3) When the complaint consists in delay or refusal to perform a duty required by law, or whenurgent action is necessary to protect or preserve the rights of the complainant, the Office of the
Ombudsman shall take steps or measures and issue such orders directing the officer, employee,
office or agency concerned to:(a) expedite the performance of duty;(b) cease or desist from the performance of a prejudicial act;(c) correct the omission;(d) explain fully the administrative act in question; or(e) take any other steps as may be necessary under the circumstances to protect andpreserve the rights of the complainant.
(4) Any delay or refusal to comply with the referral or directive of the Ombudsman or any of his
Deputies, shall constitute a ground for administrative disciplinary action against the officer or
employee to whom it was addressed.
Section 27. Effectivity and Finality of Decisions. — (1) All provisionary orders of the Office of the
Ombudsman are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman must be
filed within five (5) days after receipt of written notice and shall be entertained only on any of thefollowing grounds:(1) New evidence has been discovered which materially affects the order, directive or decision;(2) Errors of law or irregularities have been committed prejudicial to the interest of the movant.
The motion for reconsideration shall be resolved within three (3) days from filing: provided, that
only one motion for reconsideration shall be entertained.
Findings of fact by the Officer of the Ombudsman when supported by substantial evidence are conclusive.
Any order, directive or decision imposing the penalty of public censure or reprimand, suspension of not
more than one (1) month's salary shall be final and unappealable.
In all administrative disciplinary cases, orders, directives, or decisions of the Office of the Ombudsman
may be appealed to the Supreme Court by filing a petition for certiorari within ten (10) days from receiptof the written notice of the order, directive or decision or denial of the motion for reconsideration inaccordance with Rule 45 of the Rules of Court.

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The above rules may be amended or modified by the Office of the Ombudsman as the interest of justice
may require.
Section 28. Investigation in Municipalities, Cities and Provinces. — The Office of the Ombudsman may
establish offices in municipalities, cities and provinces outside Metropolitan Manila, under the immediate
supervision of the Deputies for Luzon, Visayas and Mindanao, where necessary as determined by the
Ombudsman. The investigation of complaints may be assigned to the regional or sectoral deputy
concerned or to a special investigator who shall proceed in accordance with the rules or special
instructions or directives of the Office of the Ombudsman. Pending investigation the deputy or
investigator may issue orders and provisional remedies which are immediately executory subject toreview by the Ombudsman. Within three (3) days after concluding the investigation, the deputy or
investigator shall transmit, together with the entire records of the case, his report and conclusions to the
Office of the Ombudsman. Within five (5) days after receipt of said report, the Ombudsman shall render
the appropriate order, directive or decision.
Section 29. Change of Unjust Laws. — If the Ombudsman believes that a law or regulation is unfair or
unjust, he shall recommend to the President and to Congress the necessary changes therein or the repeal
thereof.
Section 30. Transmittal/Publication of Decision. — In every case where the Ombudsman has reached adecision, conclusion or recommendation adverse to a public official or agency, he shall transmit his
decision, conclusion, recommendation or suggestion to the head of the department, agency or
instrumentality, or of the province, city or municipality concerned for such immediate action as may benecessary. When transmitting his adverse decision, conclusion or recommendation, he shall, unlessexcused by the agency or official affected, include the substance of any statement the public agency orofficial may have made to him by way of explaining past difficulties with or present rejection of the
Ombudsman's proposals.
Section 31. Designation of Investigators and Prosecutors. — The Ombudsman may utilize the personnelof his office and/or designate or deputize any fiscal, state prosecutor or lawyer in the government service
to act as special investigator or prosecutor to assist in the investigation and prosecution of certain cases.
Those designated or deputized to assist him herein provided shall be under his supervision and control.
The Ombudsman and his investigators and prosecutors, whether regular members of his staff ordesignated by him as herein provided, shall have authority to administer oaths, to issue subpoena andsubpoena duces tecum, to summon and compel witnesses to appear and testify under oath before themand/or bring books, documents and other things under their control, and to secure the attendance orpresence of any absent or recalcitrant witness through application before the Sandiganbayan or before any
inferior or superior court having jurisdiction of the place where the witness or evidence is found.
Section 32. Rights and Duties of Witness. —(1) A person required by the Ombudsman to provide the information shall be paid the same fees
and travel allowances as are extended to witnesses whose attendance has been required in the trial
courts. Upon request of the witness, the Ombudsman shall also furnish him such security for his
person and his family as may be warranted by the circumstances. For this purpose, theOmbudsman may, at its expense, call upon any police or constabulary unit to provide the said
security.

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(2) A person who, with or without service or compulsory process, provides oral or documentary
information requested by the Ombudsman shall be accorded the same privileges and immunities
as are extended to witnesses in the courts, and shall likewise be entitled to the assistance ofcounsel while being questioned.
(3) If a person refuses to respond to the Ombudsman's or his Deputy's subpoena, or refuses to be
examined, or engages in obstructive conduct, the Ombudsman or his Deputy shall issue an orderdirecting the person to appear before him to show cause why he should not be punished forcontempt. The contempt proceedings shall be conducted pursuant to the provisions of the Rulesof Court.
Section 33. Duty to Render Assistance to the Office of the Ombudsman. — Any officer or employee ofany department, bureau or office, subdivision, agency or instrumentality of the Government, including
government-owned or controlled corporations and local governments, when required by the Ombudsman,
his Deputy or the Special Prosecutor shall render assistance to the Office of the Ombudsman.
Section 34. Annual Report. — The Office of the Ombudsman shall render an annual report of its
activities and performance to the President and to Congress to be submitted within thirty (30) days fromthe start of the regular session of Congress.
Section 35. Malicious Prosecution. — Any person who, actuated by malice or gross bad faith, files acompletely unwarranted or false complaint against any government official or employee shall be subject
to a penalty of one (1) month and one (1) day to six (6) months imprisonment and a fine not exceeding
Five thousand pesos (P5,000.00).
Section 36. Penalties for Obstruction. — Any person who willfully obstructs or hinders the proper
exercise of the functions of the Office of the Ombudsman or who willfully misleads or attempts tomislead the Ombudsman, his Deputies and the Special Prosecutor in replying to their inquiries shall bepunished by a fine of not exceeding Five thousand pesos (P5,000.00).
Section 37. Franking Privilege. — All official mail matters and telegrams of the Ombudsman addressedfor delivery within the Philippines shall be received, transmitted, and delivered free of charge: provided,that such mail matters when addressed to private persons or nongovernment offices shall not exceed one
hundred and twenty (120) grams. All mail matters and telegrams sent through government telegraphfacilities containing complaints to the Office of the Ombudsman shall be transmitted free of charge,
provided that the telegram shall contain not more than one hundred fifty (150) words.
Section 38. Fiscal Autonomy. — The Office of the Ombudsman shall enjoy fiscal autonomy.
Appropriations for the Office of the Ombudsman may not be reduced below the amount appropriated forthe previous years and, after approval, shall be automatically and regularly released.
Section 39. Appropriations. — The appropriation for the Office of the Special Prosecutor in the current
General Appropriations Act is hereby transferred to the Office of the Ombudsman. Thereafter, such sums
as may be necessary shall be included in the annual General Appropriations Act.
Section 40. Separability Clause. — If any provision of this Act is held unconstitutional, other provisions
not affected thereby shall remain valid and binding.

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Section 41. Repealing Clause. — All laws, presidential decrees, letters of instructions, executive orders,rules and regulations insofar as they are inconsistent with this Act, are hereby repealed or amended as thecase may be.
Section 42. Effectivity. — This Act shall take effect after fifteen (15) days following its publication in the
Official Gazette or in three (3) newspapers of general circulation in the Philippines.
Approved: November 17, 1989.

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ANNEX HI.
SECTION 17 AND 18 OF RULE 119, REVISED RULES OF CRIMINALPROCEDURE
Section 17. Discharge of accused to be state witness. — When two or more persons are jointly charged
with the commission of any offense, upon motion of the prosecution before resting its case, the court may
direct one or more of the accused to be discharged with their consent so that they may be witnesses for thestate when, after requiring the prosecution to present evidence and the sworn statement of each proposed
state witness at a hearing in support of the discharge, the court is satisfied that:(a) There is absolute necessity for the testimony of the accused whose discharge is requested;(b) The is no other direct evidence available for the proper prosecution of the offense committed,
except the testimony of said accused;(c) The testimony of said accused can be substantially corroborated in its material points;(d) Said accused does not appear to be the most guilty; and(e) Said accused has not at any time been convicted of any offense involving moral turpitude.
Evidence adduced in support of the discharge shall automatically form part of the trial. If the court denies
the motion for discharge of the accused as state witness, his sworn statement shall be inadmissible inevidence. (9a)Section 18. Discharge of accused operates as acquittal. — The order indicated in the preceding section
shall amount to an acquittal of the discharged accused and shall be a bar to future prosecution for thesame offense, unless the accused fails or refuses to testify against his co-accused in accordance with hissworn statement constituting the basis for the discharge.

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APPENDIX I
I.

RA 6981- WITNESS PROTECTION ACT

Section 3. Admission into the Program- Any person who has witnessed or has knowledge orinformation on the commission of a crime and has testified or is testifying or about to testify before any
judicial or quasi-judicial body, or before any investigating authority, may be admitted into the Program:
Provided, That: a) the offense in which his testimony will be used is a grave felony as defined under the
Revised Penal Code, or its equivalent under special laws; b) his testimony can be substantiallycorroborated in its material points; c) he or any member of his family within the second civil degree of
consanguinity or affinity is subjected to threats to his life or bodily injury or there is a likelihood that hewill be killed, forced, intimidated, harassed or corrupted to prevent him from testifying, or to testify
falsely, or evasively, because or on account of his testimony; and d) he is not a law enforcement officer,
even if he would be testifying against the other law enforcement officers. In such a case, only theimmediate members of his family may avail themselves of the protection provided for under this Act. If
the Department, after examination of said applicant and other relevant facts, is convinced that therequirements of this Act and its implementing rules and regulations have been complied with, it shalladmit said applicant to the Program, require said witness to execute a sworn statement detailing his
knowledge or information on the commission of the crime, and thereafter issue the proper certification.
For purposes of this Act, any such person admitted to the Program shall be known as the Witness.
Section 8. Rights and Benefits- The witness shall have the following rights and benefits:(a) To have a secure housing facility until he has testified or until the threat, intimidation orharassment disappears or is reduced to a manageable or tolerable level. When the circumstances warrant,
the Witness shall be entitled to relocation and/or change of personal identity at the expense of theProgram. This right may be extended to any member of the family of the Witness within the second civil
degree of consanguinity or affinity.
(b) The Department shall, whenever practicable, assist the Witness in obtaining a means of livelihood.
The Witness relocated pursuant to this Act shall be entitled to a financial assistance from the Program forhis support and that of his family in such amount and for such duration as the Department shall determine.
(c) In no case shall the Witness be removed from or demoted in work because or on account of hisabsences due to his attendance before any judicial or quasi-judicial body or investigating authority,
including legislative investigations in aid of legislation, in going thereto and in coming there from:
Provided, That his employer is notified through a certification issued by the Department, within a periodof thirty (30) days from the date when the Witness last reported for work: Provided, further, That in thecase of prolonged transfer or permanent relocation, the employer shall have the option to remove the
Witness from employment after securing clearance from the Department upon the recommendation of the
Department of Labor and Employment. Any Witness who failed to report for work because of witness
duty shall be paid his equivalent salaries or wages corresponding to the number of days of absenceoccasioned by the Program. For purposes of this Act, any fraction of a day shall constitute a full day
salary or wage. This provision shall be applicable to both government and private employees.
(d) To be provided with reasonable travelling expenses and subsistence allowance by the Program insuch amount as the Department may determine for his attendance in the court, body or authority where his
testimony is required, as well as conferences and interviews with prosecutors or investigating officers.

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(e) To be provided with free medical treatment, hospitalization and medicines for any injury orillness incurred or suffered by him because of witness duty in any private or public hospital, clinic, or atany such institution at the expense of the Program.
(f) If a Witness is killed, because of his participation in the Program, his heirs shall be entitled to aburial benefit of not less than Ten thousand pesos (P10,000.00) from the Program exclusive of any othersimilar benefits he may be entitled to under other existing laws. (g) In case of death or permanent
incapacity, his minor or dependent children shall be entitled to free education, from primary to college
level in any state, or private school, college or university as may be determined by the Department, aslong as they shall have qualified thereto.
II. DOJ RULES ON WITNESS PROTECTION PROGRAM
Who can be admitted into the Program?
1. Any person who has knowledge of or information on the commission of a crime and has testified oris testifying or is willing to testify. 2. A witness in a congressional investigation, upon therecommendation of the legislative committee where his testimony is needed and with the approval of the
Senate President or the Speaker of the House of Representatives, as the case may be. 3. A witness who
participated in the commission of a crime and who desires to be a State witness. 4. An accused who isdischarged from an information or criminal complaint by the court in order that he may be a State witness.
What benefits may a witness under the Program receive?
The benefits include the following:□ Security protection and escort services.
□ Immunity from criminal prosecution and not to be subjected to any penalty or forfeiture for any
transaction, matter or thing concerning his compelled testimony or books, documents or writings
produced. □ Secure housing facility.
□ Assistance in obtaining a means of livelihood.
□ Reasonable traveling expenses and subsistence allowance while acting as a witness.
□ Free medical treatment, hospitalization and medicine for any injury or illness incurred or suffered
while acting as a witness. □ Burial benefits of not less than Ten Thousand pesos (P10,000.00) if thewitness is killed because of his participation in the Program.
□ Free education from primary to college level for the minor or dependent children of a witness who diesor is permanently incapacitated.
□ Non-removal or demotion in work because of absences due to his being a witness and payment of fullsalary or wage while acting as witness.

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APPENDIX JI.

SALIENT POINTS OF PROPOSED WHISTLEBLOWER’S LAW□ An organic Witness Protection, Security and Benefit Program (WPSBP) security unit shall be created
to provide security and protective services.
□ “Whistleblower” shall refer to an informant or any person who has personal knowledge or access todata of any information or event involving improper conduct by a public officer and/or a public body.
□Whistleblowers or informants, whether from the public or private sector, shall be entitled to thebenefits under this Act, provided, that all the following requisites concur:-The disclosure is voluntary, in writing and under oath;-The disclosure relates to acts constituting improper conduct by public officers and/or public bodies; and-The information to be disclosed is admissible in evidence.
□ Except insofar as allowed by this Act, during and after the disclosure, and throughout and after any
proceeding taken thereafter, a whistleblower or an informant is entitled toabsolute confidentiality as to:-His identity;-The subject matter of his disclosure; and,-The person to whom such disclosure was made.
□A whistleblower, informant or any person who has made a disclosure under this Act shall have, as
defense in any other inquiry or proceeding, the absolute privilege with respect to the subject matter ofhis/her disclosure or information given to the proper authorities.
□A whistleblower, informant, or a person who has made or is believed or suspected to have made a
disclosure under this Act is not liable to disciplinary action for making said disclosure. When determined
to be necessary and appropriate, a whistleblower or informant, even if the disclosure is made inconfidence, shall be entitled to personal security. Should, at anytime the identity of the informant be
revealed, or his anonymity compromised, the whistleblower or informant shall, in addition to the otherbenefits under this Act, and when warranted, be entitled to the benefits of R.A. No. 6891.
□ The Senate of the Philippines or the House of Representatives, as the case may be, shall provide for aseparate "Witness Protection, Security and Benefit Program" for their resource persons and/or witnesses.
□ Before a person is provided protection under this Act, he shall first execute a Memorandum of
Agreement (MOA) which shall set forth his responsibilities, including not to enter into an amicablesettlement through the execution of an affidavit of desistance.
□ Substantial breach of the MOA may be a ground for criminal action.

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□ When the circumstances warrant, the witness shall be entitled to relocation and/or change of personal
identity at the expense of the program. This right may be extended to any member of the family of thewitness within the second civil degree of consanguinity or affinity who is under threat.
□ Upon request of the program the TESDA and/or DepEd shall provide vocational training to qualified
witnesses to encourage them to be self-sufficient in preparation for their reintegration to mainstream
society. The Department of Labor and Employment (DOLE) and/or Overseas Workers Welfare
Administration (OWWA) shall likewise render assistance for the placement and employment of covered
witnesses locally and abroad.
□ In extremely meritorious cases, to be determined by the Secretary of Justice and upon request of thewitness, he may be relocated abroad.
□ The coverage of a witness under the program shall be one of the circumstances under which theperpetuation of the testimony of a witness shall be allowed in addition to those provided for in Rule 24 in
relation to Rule 134 of the Revised Rules of the Court of the Philippines.

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MUTUAL LEGAL ASSISTANCE
AND RECOVERY OF PROCEEDS OF CORRUPTION
Tomas Ken D. Romaquin, Jr. *I. INTERNATIONAL COOPERATION IN TRACING, IDENTIFYING, FREEZING,SEIZING AND CONFISCATING PROCEEDS OF CORRUPTION
Requests for legal assistance, including assistance for recovery of proceeds ofcorruption, to the Republic of the Philippines must be submitted to the Office of the Chief
State Counsel of the Department of Justice. The Office of the Chief State Counsel directly
takes charge of assisting the requesting State and executing the request if the same is basedon a treaty.
An example of a treaty to which the Republic of the Philippines is a party is the Treaty
on Mutual Legal Assistance in Criminal Matters signed on the 29th day of November 2004
by the governments of Brunei Darussalam, the Kingdom of Cambodia, the Republic ofIndonesia, the Lao People’s Democratic Republic, Malaysia, the Republic of the Philippines,
the Republic of Singapore and the Socialist Republic of Vietnam.
Under said Treaty, the Republic of the Philippines, among others, shall, subject to its
domestic laws, endeavour to locate, trace, restrain, freeze, seize, forfeit or confiscate property
derived from the commission of an offence and instrumentalities of crime from which suchassistance can be given, provided that the Requesting State provides all information which
the Republic of the Philippines considers necessary. 1
As the Requested Party, the Republic of the Philippines, pursuant to said treaty, has theduty to: (i) promptly carry out requests for assistance; (ii) carry out the request in the manner
specified by the Requesting State; (iii) make all necessary arrangements, if requested to do so,for the representation of the Requesting State in the country in any criminal proceedings
arising out of a request for assistance and shall otherwise represent the interests of theRequesting State; and (iv) respond as soon as possible to reasonable inquiries by the
Requesting State concerning progress toward execution of the request. The manner of
execution of the foregoing duties is subject to the laws and practices of the Republic of thePhilippines. 2
In the absence of a treaty, requests by a foreign states for legal assistance in therecovery of proceeds of corruption are referred by the Office of the Chief State Counsel to theAnti-Money Laundering Council. The Anti-Money Laundering Council is the financial
intelligence unit of the Republic of the Philippines tasked to implement the Anti-Money
Laundering Act. The Anti-Money Laundering Act 3 was passed to prevent the Republic of
the Philippines from becoming a haven for money laundering and, among others, establish*

Senior Assistant City Prosecutor, Office of the City Prosecutor, Muntinlupa City, National Prosecution Service,
Department of Justice, Philippines.
1
Article 22, Treaty on Mutual Legal Assistance in Criminal Matters signed on 29 November 2004.
2
Ibid., Article 7.
3
Republic Act No. 9160.

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procedures for international cooperation and assistance in the apprehension and prosecutionof persons involved in money laundering. Money laundering, under the Philippine concept,
is any act or series or combination of acts whereby proceeds of an unlawful activity, whether
in cash, property or other assets, are converted, concealed or disguised to make them appear
to have originated from legitimate sources. 4
The Anti-Money Laundering Council may execute a request for assistance from aforeign state by: (i) tracking down, freezing, restraining and seizing assets alleged to beproceeds of any unlawful activity under the procedures laid down in the Anti-Money
Laundering Act; (ii) providing the foreign state with needed information within theprocedures laid down in said Act; and (iii) applying for an order of forfeiture of any monetary
instrument or property in the court. The court, however, shall not issue an order of forfeitureunless the application is accompanied by an authenticated copy of the order of a court in therequesting state ordering the forfeiture of said monetary instrument or property of a person
who has been convicted of a money laundering offence in the requesting state, and acertification or an affidavit of a competent officer of the requesting state stating that theconviction and the order of forfeiture are final and that no further appeal lies in respect ofeither. 5
A document is authenticated if the same is signed or certified by a judge, magistrate orequivalent officer in or of the requesting state, and authenticated by the oath or affirmation ofa witness or sealed with an official or public seal of a minister, secretary of state, or officer inor of the government of the requesting state, or of the person administering the government or
a department of the requesting territory, protectorate or colony. The certificate ofauthentication may also be made by a secretary of the embassy or legation, consul general,
consul, vice consul, consular agent or any officer in the foreign service of the Philippines
stationed in the foreign state in which the record is kept, and authenticated by the seal of his
office. 6
A request for mutual assistance from a foreign state must: (i) confirm that an
investigation or prosecution is being conducted in respect of a money launderer named
therein or that he or she has been convicted of any money laundering offence; (ii) state theground on which any person is being investigated or prosecuted for money laundering or thedetails of his or her conviction; (iii) give sufficient particulars as to the identity of said
person; (iv) give particulars sufficient to identify any covered institution believed to have any
information, documents, materials or objects which may be of assistance to the investigationand prosecution; (v) ask a covered institution to produce any information, documents,
materials, or objects which may be of assistance to the investigation or prosecution; (vi)specify the manner in which and to whom said information, documents, materials or objects
obtained pursuant to said request are to be produced; (vii) give all the particulars necessary
for the issuance by the court in the requested state of the writs, orders, or processes needed by
the requesting state; and (viii) contain such other information as may assist in the executionof the request. 7
The Anti-Money Laundering Council, however, may deny a request for assistance
where the action sought by the request contravenes any provision of the Constitution or the4

Bangko Sentral ng Pilipinas Briefer on the Anti-Money Laundering Act of 2001.
Section 13 (b), Republic Act No. 9160, as amended.
6
Section 13 (f), Republic Act No. 9160, as amended.
7
Section 13 (e), Republic Act No. 9160, as amended.
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execution of the request is likely to prejudice the national interest of the Republic of thePhilippines, unless there is a treaty between the Republic of the Philippines and therequesting state relating to the provision of assistance in relation to money laundering
offences. 8
The Anti-Money Laundering Council has likewise been granted authority to make arequest to any foreign state for assistance in: (i) tracking down, freezing, restraining andseizing assets alleged to be proceeds of any unlawful activity; (ii) obtaining information thatit needs relating to any covered transaction, money laundering offence or any other matterdirectly or indirectly related thereto; (iii) to the extent allowed by the law of the foreign state,applying to the proper court for an order to enter any premises belonging to or in thepossession or control of any or all persons named therein and/or to remove any documents,
materials or objects named in said request. 9
II.

IDENTIFYING, TRACING, FREEZING, SEIZING AND CONFISCATINGPROCEEDS OF CORRUPTION

Public officers and employees 10 of the Republic of the Philippines are required tosubmit, upon assumption of office and every year thereafter, a true, detailed and sworn
statement of assets and liabilities, including a statement of the amounts and sources ofincome, the amounts of personal and family expenses and the amount of income taxes paid
for the preceding calendar year. 11 Through this measure, any unwarranted increase in income
can be easily monitored and evaluated.
Whenever any public officer or employee has acquired during incumbency an amountof property which is manifestly out of proportion to such public officer's or employee's salaryand to other lawful income and the income from legitimately acquired property, said property
shall be presumed prima facie to have been unlawfully acquired and may thus, be forfeited. 12
Hence, a former high ranking military officer of the Republic of the Philippines, withthe rank of Lieutenant General, was indicted for, among others, violation of the Anti-Graft
and Corrupt Practices Act for having acquired during his incumbency an amount of property
which is manifestly out of proportion to his salary as a military officer. The accusations
against him are, among others: (i) he declared in his Statement of Assets, Liabilities and Net
Worth that as of 31 December 2003, he had assets in the total amount of P3,848,003 incontrast to his declared assets in his 1982 Statement of Assets, Liabilities and Net Worth thatamounted to only P105,000; and (ii) further investigation revealed that he and his family had
other properties and bank accounts not declared in his Statement of Assets, Liabilities and
Net Worth amounting to at least P54,001,217. As the Lieutenant General’s main source of8Section 13 (d), Republic Act No. 9160, as amended.
Section 13 (3), Republic Act No. 9160, as amended.
10
All elective and appointive officials and employees, permanent or temporary, whether in the career or noncareer service, including military and police personnel, whether or not they receive compensation, regardless ofamount, from the national government, local governments, and all other instrumentalities, agencies or branchesof the Republic of the Philippines, including government owned or controlled corporations, and theirsubsidiaries.
11
Section 17, Article XI of the 1987 Constitution; Section 8 of Republic Act No. 6713 (Code of Conduct andEthical Standards for Public Officials and Employees) and Section 7 of Republic Act No. 3019 (Anti-Graft and
Corrupt Practices Act).
12
Section 2, Republic Act No. 1379.
9- 166 -

income was his salary as an officer of the Armed Forces of the Philippines, and given his
wife and children’s lack of any other sources of income, the Office of the Ombudsman 13
declared the assets registered in the Lieutenant General’s name, as well as those in his wife’s
and children’s names, to be illegally obtained and unexplained wealth. 14 The cases filed
against the Lieutenant General and other members of his family are still in court.
The Office of the Ombudsman likewise found the former head of the Large Taxpayer’s
Document Processing and Quality Assurance Division of the Bureau of Internal Revenue —after examination of her Statement of Assets, Liabilities and Net Worth, among others — tohave illegally acquired and accumulated properties and investments, as well as incurred
expenses and liabilities, grossly disproportionate to her income and earning capacity as agovernment employee. When computed, her total unexplained wealth amounted toapproximately P10,891,009, which was the difference between her 1986 to 2004 accumulated
wealth of P13,144,599.71 and P2,253,590.60, which was her total lawful income for that
period. 15
There was also a Deputy Chief of Staff for Comptrollership of the Armed Forces of thePhilippines, with the rank of Major General, whose properties became the subject offorfeiture proceedings on the ground that, during his incumbency as a soldier and public
officer, he acquired huge amounts of money and properties manifestly out of proportion tohis salary as such public officer and his other lawful income. 16 Among the accusations
against him was his failure to declare all his existing assets in his sworn Statement of Assets,
Liabilities and Net Worth. 17 In June 2015, the United States of America turned over to the
Republic of the Philippines US$1,384,940.28, more or less, or around P61,000,000,000,
representing the amount of some of the assets of the Major General seized from the U.S.
The use of the sworn Statement of Assets, Liabilities and Net Worth is apparently asimple yet practical tool to initially identify and trace proceeds of corruption that may
thereafter be seized and forfeited. However, the same is only effective if a particular public
officer or employee is already under investigation inasmuch as copies of Statement of Assets,
Liabilities and Net Worth need to be manually and physically retrieved from the office where
the public officer or employee under investigation is assigned before the same could be
examined and evaluated. Normally, the Statement of Assets, Liabilities and Net Worth of apublic officer or employee will only be thoroughly examined if he or she is underinvestigation. There is no system yet that would automatically alert concerned government
agencies of any suspicious increase in the net worth of a public officer or employee or any
untruthful entry in his or her Statement of Assets, Liabilities and Net Worth.
In any event, proceeds of corruption that have been concealed, placed or transferred in
a complicated scheme may still be identified, traced, frozen, seized and confiscated throughthe Anti-Money Laundering Council which has the power to: (i) requireandreceivecovered or suspicious transaction reports from covered institutions; (ii) issue orders addressedto the appropriate Supervising Authority or covered institution to determine the true identityof the owner of any monetary instrument or property subject to a covered transaction or
13

The office in the Republic of the Philippines charged with the duty to investigate and prosecute government
officials accused of crimes, such as graft and corruption.
14
G.R. No. 176944, March 6, 2013.
15
G.R. No. 179261, April 18, 2008.
16
G.R. No. 165835, June 22, 2005.
17
G.R. No. 198554, July 30, 2012.

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suspicious transaction report or request for assistance from a foreign state, or believed by theCouncil, on the basis of substantial evidence, to be, in whole or in part, proceeds of an
unlawful activity; (iii) institute civil forfeiture proceedings and all other remedial
proceedings; 18 (iv) cause the filing of complaints with the Department of Justice or the
Ombudsman for the prosecution of money laundering offences; (v) investigate suspicioustransactions and covered transactions deemed suspicious after an investigation, money
laundering activities, and other violations of the Anti-Money Laundering Act; (vi) apply, 19 ex
parte, for the freezing of any monetary instrument or property alleged to be laundered,proceeds from, or instrumentalities used in or intended for use in any unlawful activity; (vii)
implement such measures as may be necessary and justified to counteract money laundering;(viii) receive and take action in respect of, any request from foreign states for assistance intheir own anti-money laundering operations; (ix) enlist the assistance of any branch,department, bureau, office, agency or instrumentality of the government, including
government-owned and controlled corporations, in undertaking any and all anti-money
laundering operations, which may include the use of its personnel, facilities and resources forthe more resolute prevention, detection and investigation of money laundering offences andprosecution of offenders; (x) impose administrative sanctions for the violation of laws, rules,
regulations and orders and resolutions issued pursuant thereto; and (xi) require 20 thesubmission of reports on all real estate transactions involving an amount in excess of five
hundred thousand pesos (P500,000.00) within fifteen (15) days from the date of registrationof the transaction, as well as to submit copies of relevant documents of all real estatetransactions. 21
In conclusion, the Republic of the Philippines recognizes that proceeds of corruption
provide criminals with incentives and means to continue their illegal activities. Unless seized,
these proceeds will ultimately destabilize governments and undermine financial systems.
Indeed, new means should be developed on how to effectively seize these proceeds to finally
eradicate corruption. The Republic of the Philippines has already started to take steps not toallow itself to become a haven for the corrupt.

18

Through the Office of the Solicitor General.
Before the Court of Appeals.
20
The Land Registration Authority and all its Registries of Deeds.
21
Section 7, Republic Act No. 9160.
19- 168 -

MUTUAL LEGAL ASSISTANCE ANDRECOVERY OF PROCEEDS OF CORRUPTION IN THAILAND
Phoosit Tiravanichpong *I.

INTRODUCTION

The world in the 21st century is the world of globalization. Increasing varioustransportation infrastructures makes easy ways to do business transnationally. However, it also
makes easier ways for criminals to move their wealth across borders. It is difficult for law
enforcement agencies to find proceeds of crime because the proceeds will often be out of theagency’s jurisdiction. Therefore, international cooperation is needed in order to fight against
these modern crimes, including corruption. The objective of this work is to prevent the criminals
from making a profit from their corruption. 1
II.

STEPS OF RECOVERING AND RETURNING PROCEEDS OF CORRUPTION 2

1. Tracing and identifying proceeds of crime — exchanging information among crossborder authorities is needed to identify the trail of the asset or money. Useful information may bebank records or witness statements.
2. Freezing or seizing — when the asset is located, it needs to be preserved for possible
forfeiture. A restraining or freezing order of law enforcement or judicial authorities may benecessary, subject to the laws of each domestic jurisdiction.
3. Judicial processing for making confiscation orders.
4. After confiscation, the asset may be returned to the victim or requesting State.
The tool which is normally used within the asset recovery process when it touches upon theinternational characters is known as mutual legal assistance (MLA). But the domestication of therequest from state to state is needed under the domestic law concerned. The matter of how to
enforce MLA requests in Thailand will be talked about below.

*

Provincial Public Prosecutor, Thanyaburi Provincial Public Prosecutor Office, Office of the Attorney General of
Thailand.
1
Pereira, Pedro Gomes, “Mutual Legal Assistance and Asset Recovery,” The Sixth Regional Seminar on Good
Governance for Southeast Asian Countries, Tokyo: UNAFEI, 2013, p. 28-29
2
ASEAN Handbook on International Legal Cooperation in Trafficking in Persons Cases, Jakarta: the ASEAN
Secretariat, 2010, p. 92-97.

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III. INTERNATIONAL COOPERATION IN THAILAND
There are two main channels of international cooperation:
1.

Informal Channels
Informal channels facilitate the provision of informal assistance from one law enforcement
agency to another. Assistance is conducted bilaterally agency to agency, through the Interpol
cooperation mechanism, and networks among anti-corruption agencies. Most of this channel isfor obtaining information from foreign agencies to collect preliminary data, providing publicrecords, such as company documents, locating persons, etc. It is much faster than using formal
channels because requests and responses are sent directly.
Under the Counter Corruption Act (No.3) B.E. 2558 (2015), the National Anti-Corruption
Commission of Thailand (NACC) has power to provide informal assistance to any foreignauthorities in the field of fighting against corruption. 3 Therefore, in July 2015, NACC
established the Thailand Anti-Corruption Coordination Center (TACC) which acts as the Stolen
Asset Recovery (StAR) and INTERPOL Global Focal Point on Asset Recovery and as theInternational Center for Asset Recovery (ICAR), in compliance with a Memorandum ofUnderstanding between the Basel Institute on Governance and the NACC.
2.

Formal Channels (MLA)
Under the Act on Mutual Legal Assistance in Criminal Matters, B.E. 2535 (1992) (MLA
Act), Thailand can provide both on treaty-based and non-treaty-based Mutual Legal Assistance(MLA) to foreign countries. Assistance may be granted even if no treaty exists between Thailand
and the requesting state, provided that such state commits to assist Thailand in a reciprocal
manner upon the request. In this case, the request should be submitted through diplomaticchannels.
However, if the request for assistance was sent from the State parties of Thailand’sbilateral or multilateral treaty, commitment of reciprocity and submission through diplomaticchannels will be waived. Moreover, the request shall be made directly to the Attorney General,
as the Central Authority of Mutual Legal Assistance as prescribed by the law.
Thailand has bilateral MLA treaties with 14 countries. In addition, Thailand ratified theUnited Nations Convention against Corruption in 2011 and ratified the Treaty on Mutual Legal
Assistance in Criminal Matters among liked-minded ASEAN Member Countries (ASEAN
MLAT) in 2012.
IV.

TYPES OF ASSISTANCE UNDER THE MLA ACT

In order to recover proceeds of crimes, some kinds of assistance provided by the MLA Act,
1992 can be useful:3

Article 19 (14/1) of the Counter Corruption Act (No.3) B.E. 2558 (2015).

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1. Identifying or tracing proceeds, including taking statements of persons or gathering
evidence located in Thailand 4 or providing documents or information in the possession of any
State agency5 or located person 6.
2. Asset forfeiture by freezing, or seizing, and, finally confiscating proceeds of crime. 7
However, the assistance will be provided under the following conditions:

Assistance requested should be conviction based;Assets should be related to the crime;The freezing, seizing or confiscation order from the court is needed 8;Asset sharing is not regulated in the MLA Act 1992.

To correct these challenges, the Office of the Attorney General and the Ministry of Justicepropose to revise the MLA Act. Under the new law, a non-conviction-based forfeiture measure
and asset sharing could be implemented. However, the draft law is still under the parliament’s
consideration.
V.

ASSET RECOVERY CASE

A.

Facts of the Case
In 1992, a talented financial investment expert called “Mr. R” started a relationship with
Mr. K., a CEO of a famous commercial bank in Thailand. Firstly, Mr. R was Mr. K’s private
financial advisor and, later on, Mr. K appointed Mr. R to be his bank’s advisor in 1995. At thattime, Mr. R recommended the bank to grow in a new business market by giving a loan toinvestors who want to take over weak companies. After restructuring and the business could be
run normally, the investors would sell the company and the loan would be paid off in full to thebank. The bank expected to earn a lot of fees from this business.
Mr. R established 60 small companies by nominating his driver to be the fake owner.
These companies were alleged to acquire other business. Actually, they did not do any businessand their assets were too low to be a guarantee of the loan. He requested Mr. K to approve
massive loans to his “paper companies.” Mr. K gave him a loan directly without doing financial
scrutiny. After that Mr. R siphoned the funds, around 300 million dollars, into his various
overseas accounts, mostly in Switzerland. He also gave cheap loans to various politicians andpublic officials in several countries.

4

Article 15 of the Act on Mutual Legal Assistance in Criminal Matters, B.E. 2535 (1992).
Article 18 of the Act on Mutual Legal Assistance in Criminal Matters, B.E. 2535 (1992).
6
Article 30 of the Act on Mutual Legal Assistance in Criminal Matters, B.E. 2535 (1992).
7
Article 32 of the Act on Mutual Legal Assistance in Criminal Matters, B.E. 2535 (1992).
8
Article 33 of the Act on Mutual Legal Assistance in Criminal Matters, B.E. 2535 (1992).
5- 171 -

The bank collapsed in 1996 and the central bank of Thailand took it over. Mr. R fled to
Prague, Zurich, and resided in Canada. He never came back to Thailand.
B.

The Case
Thai authorities investigated the case and found that Mr. R, Mr. K and others embezzled
2.2 billion dollars which was a criminal offence under the Stock Exchange Commission Act.
Thai authorities requested Canada to extradite him. Mr. R fought against the extradition for 13
years. Finally, the Canadian court decided to extradite him back to Thailand in 2009. The court
found Mr. R guilty and sentenced him to 10 years’ imprisonment and a fine of 41 million dollars.
C.

Recovery of Assets
The central bank of Thailand and office of the Attorney General followed Mr. R money’s
trail to Guernsey Island (near the United Kingdom) and froze Mr. R’s land which was valued
around 6.4 million dollars. They also found some assets in the United Kingdom valued at around4 million dollars and they froze them, too. The assets in Switzerland were valued at around 54
million dollars, were frozen and, later on, the central bank sued Mr. R and won the civil case.
After that, they executed the judgement and the money was returned to Thailand to cure thedamages that Mr. R had caused.

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PUBLIC–PRIVATE PARTNERSHIP ON
PREVENTION AND SUPPRESSION OF CORRUPTION
Worachai Phatcharawalai *I. NACC COUNTERPARTS
Cooperation from all sectors of society plays an important role to decrease corruption.
For an advantage in prevention and suppression of corruption, the ONACC operates its duties
with great support in many aspects from private counterparts. The project, called the “TrueFriend” project, recruits its participants who are well-behaved and honest persons from theprivate sector. The purposes of this project are to:• compliment and give encouragement• reinforce the value of honesty in local areas• magnify the outcome of ideas and good practice in reinforcing the value of honesty• coordinate in giving support and assistance to the ONACC• create synergy with the ONACC to counter corruption, to encourage award receivers
to take part in solving problems and developing their communities
A.

Recruiting Procedures
The NACC has appointed a sub-committee responsible for recruiting 760 provincial
participants by selecting 10 participants for each province; the qualifications of allparticipants are established by conditions and terms.
B.

Benefits of Counterparts
1. NACC provincial counterparts will coordinate and promote activities, raiseawareness in morality, ethics and honesty among the youth, government officials, private
workers, etc.
2. Conduct information gathering on outstanding honest persons of their community.
3. Publicizing roles and duties of counterparts to relevant organizations such as schools,
universities etc.
4. Organizing activities that aim to unite all counterparts all over the country; moreover,exchanging information on experienced problems and idea sharing.

*

Senior Inquiry Officer, Office of the National Anti-Corruption, Thailand.

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II. ACTIVITIES ON CORPORATE GOVERNANCE AND ANTI-CORRUPTIONWITH THE THAI BANK ASSOCIATIONThis project is cooperation between the NACC and Thai Bank Association to educate
students on good governance. The project raises awareness on doing business with integrity
and complying with good governance and corporate governance principles, including theinitiation of an anti-corruption campaign. The NACC together with KrungThai Bank havelaunched activities relating to an anti-corruption scheme as follows:
1. The NACC accompanied by KrungThai Bank, Chulalongkorn University andThammasat University organized events to comprehend and invite students to participate in
an integrity business plan contest. This contest received very high attention, and over 50
teams from under graduate schools and 90 teams from secondary schools participated. The
best business plan from each level received the NACC’s President plate and 30,000 Baht as areward. Through this kind of project, students at all levels will realize how critical it is to run
a business with integrity.
2. Holding exhibitions for the purpose of encouraging the private sector to operate theirbusinesses conforming to corporate governance principles, ethics and corporate social
responsibility.
3. Establishing cooperation agreements with the private sector by entering into
Memoranda of Understanding (MoU) or other types of agreements. This agreement is forgedwith the intention of enhancing cooperation that conforms to corporate governance principles,
ethics and corporate social responsibility (CSR).
III. MECHANISM ON GOOD GOVERNANCE IN THE PRIVATE SECTOR, ITS
ACTIVITIES AND CORPORATE GOVERNANCE AWARD
In our modern world, leading companies draw their attention more to corporate social
responsibility (CSR) principles because they believe that doing business with those principles
will raise their production and service standards to another level. Moreover, Asia–Pacific
Economic Cooperation (APEC) has launched its “Code of conduct for business” to be
guidelines for APEC parties to regulate their private sectors. The key purpose of this code of
conduct is to emphasize the importance of corruption prevention measures and transform it
into National Anti-Corruption Strategy: CSR activities initiated by UN Global Compact, haveinvited the private sector to establish an agreement under four main themes, which are humanrights, labour, environment and anti-corruption. CSR activities mostly emphasize
responsibility for the environment, energy saving and education for the underprivileged. Only
small numbers of the entrepreneurs seriously promote the fight against corruption, although,in reality, corruption, both in the public and private sectors, is the fundamental and persistentproblem of the society. Corruption also causes other problems such as inequality of themembers of society, lack of discipline, decline of ethics and morality and the thought ofcaring only of their own interest not the public interest.
In order to take concrete and effective action, the NACC, the Chamber of Commerce
and the Committee of Good Governance have presented “Corporate Governance Awards” topraise and award the private sector especially for their transparency and accountability. The
award was presented to the best three entrepreneurs of each region of Thailand; north, east,- 174 -

northeast, south and central, who apply good governance in their businesses. This includes
information disclosure, transparency and verifiability. The award presentation, sponsored by
the NACC and the Provisional NACC, is held locally in each region. The presentation gains
overwhelming interest from the public. The Governor of the region, the President of the
Chamber of Commerce and the press are also invited to this event.

- 175 -

MUTUAL LEGAL ASSISTANCE AND ISSUES OF
ANTI-CORRUPTION AND ASSET RECOVERY THROUGHCORRUPTION CASES IN VIET NAM
Nguyen Hoanh Dat *Vu Van Giang †I.

INTRODUCTION

Anti-corruption and asset recovery are emerging as global issues, and this requires
countries to collaboratively work with each other and find out countermeasures forinternational cooperation in the field of criminal justice to deal with these plagues. This
report discusses the issue of mutual legal assistance in criminal matters (MLA) andanti-corruption and asset recovery through corruption cases in the Vietnamese context.
II.

MUTUAL LEGAL ASSISTANCE

A.

Background of MLA
MLA may be generally defined as a mechanism in which one country, upon a formal
request, provides another country with legal assistance for the purpose of investigation,prosecution, adjudication and execution of a criminal case. Legal grounds to conduct MLA
are relevant international agreements and domestic laws. In addition, in the absence of such
legislation, the principle of reciprocity can be used to seek legal assistance. The scope ofassistance often includes obtaining evidence, service of legal documents, summoning of
witnesses, victims etc., exchange of information, transfer of prosecution, extradition,
execution of judgements and execution of search-and-seizure orders related to illegallyacquired assets. There are certain requests for MLA that may be refused to be executed, suchas when requests do not satisfy the principle of dual criminality or requests would prejudice
the sovereignty, security, national interest or other essential interests of the Requested State.
MLA, as a formal legal basic, has to be implemented via a central authority of each country.
Requests for MLA made by competent authorities shall be submitted to the central authorityof the Requesting State before being sent to the central authority of the Requested Sate for
execution.
B.

MLA Legislation
The Vietnamese legislation on MLA consists of the 2003 Criminal Procedural Code, the2007 Law on Mutual Legal Assistance, MLA treaties between Viet Nam and foreigncountries.

*

Vice Head of Mutual Legal Assistance in Criminal Matters Division, Department for International Cooperationand Mutual Legal Assistance in Criminal Matters, Supreme People’s Procuracy of Viet Nam.
†
Prosecutor, Department for Public Prosecution and Supervision over Investigation of Position and Corrupt
Crime, Supreme People’s Procuracy of Viet Nam.

- 176 -

1.

The 2003 Criminal Procedural CodePart VIII of the 2003 Criminal Procedural Code provides for basic principles oninternational cooperation in criminal justice of Viet Nam’s judicial agencies. These principles
are described as follows:- International cooperation in criminal proceedings between procedure-conducting
agencies of Viet Nam and foreign authorities with corresponding competence shall be
implemented under the principles of respect for national independence, sovereignty andterritorial integrity, non-intervention in internal affairs of each other, equality and mutual
benefit, compliance with the Constitution of Viet Nam and fundamental principles ofinternational law.
International cooperation in criminal proceedings shall be carried out in conformity
with the international agreements to which Viet Nam has signed or acceded and the laws ofViet Nam.
- Where Viet Nam has not yet signed or acceded to relevant international agreements,
international cooperation in criminal proceedings shall be effected on the principle ofreciprocity but not in contravention of the laws of Viet Nam, international laws andinternational practices.
In relation to cooperation in MLA, provisions in the 2003 Criminal Procedural Codeindicate that when granting MLA to foreign countries, the competent Vietnamese judicial
authorities shall apply the provisions of relevant international agreements to which Viet Nam
has signed or acceded and the provisions of the 2003 Criminal Procedural Code. The
competent Vietnamese judicial authorities may refuse to execute foreign requests in one of
the following circumstances: (1) Requests fail to comply with the international agreements towhich Viet Nam has signed or acceded; (2) The execution of requests would impair thenational sovereignty, security or other essential interests of Viet Nam.
2.

The 2007 Law on Mutual Legal AssistanceThe 2007 Law on Mutual Legal Assistance, which was introduced in 2007 and cameinto force in 2008, marked a breakthrough in the development of Viet Nam’s MLA legal
framework. As a separate law governing the MLA field, it provides for principles,competence and procedures of executing legal assistance in civil and criminal matters,
extradition and transfer of prisoners between Viet Nam and foreign countries as well as
responsibilities of Viet Nam’s state agencies in MLA activities.

In terms of MLA in criminal matters, chapter III of the Law stipulates the scope ofassistance including the following matters:- Service of legal documents and other records concerning MLA in criminal matters;- Summoning of witnesses and experts;- Gathering and providing evidence;- Transfer of criminal proceedings;- Exchange of information; and- 177 -

- Other assistance.
The Law also envisages kinds of requests which are likely to be refused or postponed,such as:- Requests not in conformity with the obligation of Viet Nam under international
agreements to which Viet Nam is a party and the Vietnamese laws;- Requests would prejudice sovereignty, national security of Viet Nam;
- Requests relate to the prosecution of a person for an offence in respect of which theoffender has been finally convicted, acquitted or pardoned in Viet Nam;
- Requests relate to an offence that could be no longer prosecuted by reason of lapse oftime under the laws of Viet Nam;
- Requests relate to an act or omission that does not constitute an offence under thelaws of Viet Nam.
Concerning information that must be contained in an MLA request, the 2007 Law on
Mutual Legal Assistance provides that the MLA request must consist of the following:- The name and address of the office by which the request is made;sent;- The name and address of the requested office or its head office to which the request is- The name of the person and his/her permanent residence or office address, the officialname and address of an entity or organization or its head office to whom or which the request
relates;- A description of the assistance sought, the purpose of the request, the nature andrelevant facts of the case, the provision and punishment of the applicable laws, the progressof the investigation, prosecution or court proceedings and the time limit within which therequest should be executed.
In addition to the above information, the letter of request for assistance may include
additional information:- The identity, nationality and domicile of the person [the accused] to whom the caserelates or the other who knows information sought that is related to the said case;- Matters for which an interrogation is sought, a list of questions posed and, in cases ofa request for the obtaining of evidence, a description of documents, records or items ofevidence rendered and, if necessary, a description and identify of the person who is required
to render such documents, records or items of evidence;- The nature of tasks, a list of questions and requirements for the summoned witness orexpert;- 178 -

- In case of a request for search, seizure, tracing or confiscation of proceeds and/or
instrumentalities of crime, a description of searched property and premises, the grounds tobelieve that the proceeds and/or instrumentalities of crime exist within the Requested Party
and are possibly under the jurisdiction of the Requesting Party and the enforcement of orders
or judgements of the court to which the request relates;- Measures applicable to the request that would likely result in locating or seizing
proceeds and/or instrumentalities of crime;- Requirements or procedures that the Requesting Party wishes to be followed tofacilitate the execution of the request, including forms or manners in which information,evidence, documents or items are provided;- The degree of confidentiality required and the reasons thereof;- The purpose, intended date and schedule of the trip if competent officers of theRequesting Party wish to travel to the territory of the Requested Party for the purpose of theexecution of the request;- The criminal judgement or order of a court and other documents, articles of evidence
or information necessary for the execution of the request.
If the Requested Party considers that the information contained in the letter of request is
not sufficient to enable the request to be dealt with under this Treaty, it shall request
additional information in writing and set a specific date on which such additional informationis received;
The request shall be made in writing. However, in urgent cases and permitted by the
Requested Party, it may be made in another form but shall be promptly confirmed in writing
thereafter.
The letter of request and its supporting document shall be in the language of theRequesting Party and accompanied by a translation into the language of the Requested Partyor another language acceptable to the Requested Party.
It is worth mentioning that, according to the 2007 Law on Mutual Legal Assistance, theSupreme People’s Procuracy of Viet Nam (SPP) is the Central Authority for mutual legal
assistance. The Department for International Cooperation and Mutual Legal Assistance in
Criminal Matters (ICD) of the SPP is directly in charge of handling MLA requests.
III. ANTI-CORRUPTION AND ASSET RECOVERY THROUGH CORRUPTIONCASES IN VIET NAM
A.

Relevant Legislation
The Vietnamese Penal Code stipulates corruption-related offences in its Chapter XXI –Part A, including 7 offences from Article 278 to Article 284, specifically:- 179 -

- Offence of embezzlement (Article 278);- Offence of bribery (Article 279);- Offence of abusing power or position to appropriate property (Article 280);- Offence of taking advantage of power or position while executing the State’s duties(Article 281);- Offence of abusing power while executing the State’s duties (Article 282);- Offence of taking advantage of power or position to put influence on another to seek
benefits (Article 283);- Offence of making false statements of forgeries in the State’s business (Article 284);
Punishments applied to these offences range from definite terms of imprisonment to life
imprisonment and the death penalty. The sentenced person can have additional punishments
imposed such as pecuniary penalties, prohibition of holding positions for limited periods, andpartly or wholly confiscating property.
B.

Asset Recovery in the Fight against Corruption Crime
Corruption is conduct by those who have positions or power to intentionallyappropriate property or benefit from illicit enrichment. It also causes extreme consequencesand damages to the politics, economy and society. According to the definition in the
Vietnamese Penal Code, “corruption is a conduct by those who use position or power tocommit violations when executing the State’s duties to gain benefits.” Therefore, in order toeffectively prevent and suppress corruption, apart from prosecuting the offender, there need
to be measures to (1) recover property derived from corrupt acts, (2) remedy consequences
caused by corrupt acts and (3) efficiently combat conduct of enrichment or money laundering.
Of such measures, it is believed that asset recovery and confiscation are clearly strong anddrastic means, heavily impacting the motivation and intentions of corrupt offenders. In
addition to the prosecution of corrupt acts, tracing, restraining, seizing and confiscatingproceeds of corruption can stop those who are intent on committing corrupt acts fromthinking about doing such things. If one is aware that any proceeds of corrupt crime shall berecovered, he/she is much more likely to lose the intention or motivation to commit corrupt
acts. If corruption is mainly imposed with punishment, the corrupt person can accept suchpunishment to, in return, enjoy the asset obtained from his/her corrupt acts, which shouldhave been confiscated by the State. This argument is to emphasize that asset recovery is
undoubtedly an effective measure to combat corruption.
C.

Measures to Recover Proceeds of Corruption According to Vietnamese Legislation
Fully aware of the importance of asset recovery in the fight against corruption, Viet
Nam has made relevant legislation to deal with proceeds of crime in general as well as
corrupt property in particular. The Vietnamese criminal procedural legislation stipulates
sufficient provisions to trace, seize, restrain and freeze proceeds of crime for the purpose oflater confiscation. Among these provisions, Article 70-71 of the 2005 Law on
Anti-Corruption set out general provisions to deal with proceeds of corrupt crime,
particularly cross-border cases, including penal, administrative, civil and economic measures,
particularly aiming at high-profile cases. Currently in Viet Nam, besides these provisions,- 180 -

there is no separate law governing proceeds of crime.
D.

The Penal Code
Generally, legal measures and schemes to deal with proceeds of crime are stipulated in
the Penal Code, the Criminal Procedural Code, the Civil Code and other relevant legislation.
The Penal Code is most relevant as setting out penal measures to deal with, recover andconfiscate proceeds of crime, including corrupt property. Article 28 of this Code provides for(1) pecuniary penalty as either main or additional punishment and (2) confiscation of assets.
More specifically, Article 30 of the Code states that pecuniary penalty as main punishment
shall be applied to corrupt and drug offences or other ones. The offender shall be also subject
to asset confiscation or pecuniary penalty as additional punishment. These penal measures arealso set out as punishments for certain offences such as embezzlement or bribery; accordingly,
those who commit these offences can be imposed with pecuniary penalty or confiscation ofassets.
In addition to the above measures as punishment, Article 41 of the Penal Codestipulates judicial measures; accordingly, confiscation shall be applied to instrumentalities ofcrime, property or money having criminal origin. These measures have no punishable nature
but are included in criminal judgements by the court and are ones which aim at proceeds ofcorrupt crime. The nature of these judicial measures is that in corruption cases, the offendershall not only be imposed with sentences such as definite terms or life of imprisonment but
also any proceeds of crime shall be either confiscated or returned to the bona fide parties.
What is more, Article 41 of the Penal Code provides that the offender can be forced to makecompensation or restore the harm caused by criminal acts, including corrupt ones.
E.

The Criminal Procedural CodeIn order to enforce the above provisions in the Penal Code, the Criminal Procedural
Code (Article 65) states that the investigation agency, the prosecutors’ office and the court
shall take procedural measures not only to prove criminal conduct but also to identify
proceeds of crime for later asset recovery. Also, the Criminal Procedural Code set out specificschemes to seize objects/documents and restrain or freeze assets for the purpose ofconfiscation.
IV.

ACHIEVEMENTS OF ASSET RECOVERYThe current status of the fight against corruption shows that corruption has massive
economic and social consequences, driving a number of state-owned enterprises into
bankruptcy. For high-profile cases only, the amount of proceeds of corrupt crime can be
estimated at thousands of billions of VND, leading investing projects and business operations
to decrease. Corrupt acts can often be breaching the State’s economic regulations to obtain
illegal assets or benefits and create economic consequences for state-owned enterprises. An
example of this is the case of ALC II Company, a subsidiary of Agribank. The accused of thiscase embezzled 79 billion of VND and caused 390 billion of VND in damages to the State.
However, the amount of asset recovery is inadequate when compared to these figures.
Nevertheless, in recent years, the court prefers to apply more confiscating and compensating
measures over corrupt cases. This implies that asset recovery will be a drastic means tocombat corruption crime in the time to come.

- 181 -

V.

CHALLENGES OF ASSET RECOVERY- The number of corruption cases discovered and treated do not reflect the actual
situation of corruption crime;- The amount of proceeds of corruption crime traced and identified does not reflect
actual size;- There are few traces of proceeds of corruption crime as they can be laundered;- Time consuming investigation, lack of resources and technical facilities;- Difficulty in making information of property of officials accessible to the public andtracing property transactions;- Rulings of the court unable to be fully enforced.
VI.

POSSIBLE CAUSES- It is often difficult to detect and investigate corrupt acts, particularly acts ofembezzlement and bribery. The offenders can be state officials who hold certain positions andpower and are capable of engaging in criminal acts and concealing proceeds of crime.
Furthermore, in Viet Nam, there is a gap in the legislation to control cash flows, economictransactions and incomes.
- Proceeds of corruption crime can be turned into lawful assets through money
laundering forms, including investing in business, stock markets and even gambling, etc. This
leads to vast amounts of assets not being recovered.
- The offender accepts punishment and is not willing to cooperate with judicial
authorities to return the assets.
- Mutual legal assistance channels do not work (no results of assistance aboard);
difficulty in determining true values of assets, particularly shares, real estate, etc.
- Late actions taken to restrain and freeze proceeds of crime, which results indisposition.
- Lack of capacity of law enforcement officers, who are not experienced in financial
and banking areas, economic investment and construction, which are needed to trace
proceeds of crime.
- Asset recovery-related judgements by the court are sometimes not clear, consequently
causing difficulty to be enforced.
- Weak legal framework as relevant provisions in the Penal Code and the Criminal
Procedural Code are insufficient and obscure, which makes it difficult for law enforcement
agencies to deal with proceeds of corruption crime.

- 182 -

VII. SOME SOLUTIONS TO ENHANCE EFFECTIVENESS OF THE FIGHT
AGAINST CORRUPTION CRIME AND ASSET RECOVERY
In order to facilitate the fight against corruption as well as asset recovery, the following
solutions can be taken into consideration:- Economic policies and anti-corruption strategies must be improved to deal withcurrent challenges of asset recovery and relevant provisions of the 2013 Constitution are
required to be enacted;- Assets of state officials must be properly listed in accordance with the 2005 Law on
anti-corruption, aiming at the adequate control of the state officials’ lawful incomes. This canbe an effective measure to trace proceeds of corrupt crime;- Strengthening power and competence of law enforcement agencies by amending
relevant legislation; improving relevant legislation such as the law on anti-money laundering,
the law on auditing, the law on inspection, etc.;- Enhancing the function of supervision of the National Assembly and facilitating theability of the people to supervise the operation of the state agencies;- The Penal Code should be reviewed in the way that asset recovery measures play aneffective role to confiscate corrupt assets, together with punishable measures;- The Criminal Procedural Code should be reviewed; accordingly, some new provisions
are recommended such as the role of the prosecutors’ office in dealing with early crime
reports, freezing measures applied to bank accounts, etc.;- Improving provisions on evaluating the true values of proceeds of crime. The
financial experts will play more important roles in criminal procedure to extract the amountof proceeds of crime from mixed assets.
- Improving capacity of law enforcement officers. They need to be trained withspecialized knowledge in financial, banking, stock market areas, etc. to deal with proceeds ofcrime.
- Enhancing international judicial cooperation including mutual legal assistanceactivities, expecting this channel to be more and more effective in asset recovery.
VIII. PRIVATE AND PUBLIC COOPERATION IN ANTI-CORRUPTION
It is obvious that private enterprises are increasingly taking part in the prevention andsuppression of corruption. They make a huge contribution to economic development and use
public services the most; therefore, they are the most vulnerable to corrupt acts. Private
enterprises play the role of “supplier” while state officials play the role of “demander” in acertain corruption affairs. Thus, one of way to prevent a corrupt act from occurring is
minimizing “the supplier”. In fact, private enterprises have in recent years been victims of- 183 -

corrupt acts. However, they themselves have problems that tend to make bribery the way to
win the business and breach the law to gain benefit, which may negatively impact on faircompetition.
The link between private enterprises and corrupt acts and its consequences is clear; thus,
the fight against corruption worldwide must take the role of the private sector into account.
This is also indicated in relevant international legal instruments, including UNCAC.
Nevertheless, public–private partnership in the fight against corruption has just beenaddressed in recent years in Viet Nam. This is because both the Vietnamese conception andlegislation tend to consider corruption as a matter only occurring in the public sector. Aware
that ignoring the private sector may fail in the fight against corruption, Viet Nam has changed
its way of thinking, and new progress has made as the National Assembly is now discussing a
draft amendment of the 1999 Penal Code; accordingly, corrupt acts can be understood to
occur in both the public and private sectors and be committed by both those who are state
officials and those who work in the private sector. Additionally, Viet Nam has made great
efforts to improve the transparency of state agencies which often deal with applications andissue permissions to private enterprises. This is clearly an efficient approach to prevent
corrupt acts from occurring in public–private relationships.

- 184 -

NINTH REGIONAL SEMINAR ON GOOD GOVERNANCE
PARTICIPANTS, VISITNG EXPERTS & ORGANIZERS

A. International Participants
Name
Ms. Zailinawati HASSAN

Title and Organization
Assistant Special Investigator
Investigation Section, Anti-Corruption Bureau
BruneiMs. Dk Norfaziah PG HAJI ABAS Assistant Special Investigator
Investigation Section, Anti-Corruption Bureau
BruneiMr. KU Khemlin
Deputy Director General of Judicial Development
Ministry of JusticeCambodia
Ms. SENG Lina
Official
Anti-Corruption Unit
Cambodia
Mr. Raymond Ali
Head of Special Crimes Section
Tangerang District Prosecutor's Office
Indonesia
Mr. Banu Laksmana
Prosecutor
Asset Recovery Center of the Attorney General's Office
Indonesia
Mr. Afief Yulian Miftah
Repression Area
Corruption Eradication Commission
Indonesia
Mr. Sibounzom BOUNLOM
Chief of Criminal Inspection Division
The Office of Middle Region People's Prosecutor
Laos
Mr. Phongsavanh PHOMMAHAXAY Deputy of Investigation Division
Investigation Corruption Department, Government Inspection
Authority
Laos
Dato' Umar Saifuddin Bin JAAFAR Senior Federal Counsel
Malaysian Anti Corruption Commission
Malaysia
Dato' Abdul Razak Bin MUSA
Deputy Head of Prosecution Division (Policy)
Prosecution Division, Attorney General’s Chambers of
Malaysia
Ms. Khin Cho OHN
Deputy Director General
Prosecution Department of the Union Attorney General
MyanmarMr. Moe Thant Zin
Director
Crime Branch, Bureau of Special Investigation
MyanmarMs. Rowena Alvarez DEL ROSARIO Graft Investigation and Prosecution Officer II
Office of the Overall Deputy Ombudsman
Philippines- 185 -

Name
Title and Organization
Mr. Tomas Ken D. ROMAQUIN, Jr Senior Assistant City Prosecutor
Office of the City Prosecutor, Muntinlupa City, Philippines,
National Prosecution Service, Department of Justice
Philippines
Mr. Phoosit TIRAVANICHPONG
Provincial Public Prosecutor
Thanyaburi Provincial Public Prosecution Office, Office of
the Attorney General
ThailandMr. Worachai PHATCHARAWALAI Senior Inquiry Officer
Office of the National Anti-Corruption
ThailandMr. Vu Van Giang

Prosecutor
Department for Prosecution and Supervision over theInvestigation of Corrupt and Position Crime (Department 5)
under Supreme People’s Procuracy

Mr. NGUYEN Hoanh Dat

Viet Nam
Vice Head of Mutual Legal Assistance Division
Department for International Cooperation and Mutual Legal
Assistance in Criminal Matters (Department 13) underSupreme People’s Procuracy

B. Visiting Experts
Name
Mr. Tony KWOK Man-wai

Viet Nam
Title and Organization
International Anti-Corruption Specialist
Former Deputy Commissioner of Hong Kong Independent
Commission Against Corruption
Hong Kong

C. Speakers and Organizers: Indonesia
Name
Ms. Laksmi Indriyah

Mr. Adnan Pandu Praja
Ms. Mahayu Dian Suryandari
Mr. Nurtjahyadi

Title and Organization
Acting Head of Legal and International Relations Bureau
Attorney General's OfficeVice Commissioner
Corruption Eradication Commission
Prosecutor
Attorney General's Office
Cooperation Specialist
Corruption Eradication Commission

D. Organizers: UNAFEI
NameMr. MORINAGA, Taro

Mr. MORIYA, Kazuhiko
Mr. YUKAWA, Tsuyoshi
Mr. Thomas L. SCHMID

Deputy Director
UNAFEI
Professor
UNAFEI
Professor
UNAFEI
Linguistic Adviser
UNAFEI- 186 -

Title and Organization

Ninth Regional Seminar on Good Governance for Southeast Asian Countries“Current Challenges and Best Practices in the Investigation, Prosecution and Prevention of
Corruption Cases – Sharing Experiences and Learning from Actual Cases“

SCHEDULE
23-26 November 2015
JW Marriott Hotel Jakarta
Hosts:
United Nations Asia and Far East Institutefor the Prevention of Crime and the Treatment of Offenders (UNAFEI) ,Attorney General’s Office of the Republic of Indonesia (AGO)
Corruption Eradication Commission (KPK)
Monday, 23 November
PM
Registration
19.00-21:00:
Reception hosted by UNAFEI(room “Sapphire 1” on Level 3 of JW Marriott Hotel, Jakarta)
Tuesday, 24 November
09.00-09.45:
Opening Ceremony – room “Sapphire 1”
Opening Address by Ms. Laksmi Indriyah, Acting Head of Legal andInternational Relations Bureau, AGO
Address by Mr. Adnan Pandu Praja, Vice Commissioner, KPK
Special Address by Mr. HONSEI, Kozo, Minister (Deputy Chief ofMission), Embassy of Japan in Indonesia
Address by Mr. YAMASHITA,Terutoshi, Director, UNAFEI
Group Photo session
09.45-10.15:
Keynote Address by Mr. MORINAGA, Taro, Deputy Director,
UNAFEI
10.15-10.45:
Keynote Address by Mr. Adnan Pandu Praja, Vice Commissioner,
KPK
10.45-11.00:
Coffee/Tea Break
11.00-12.00:
Special Presentation 1 by Mr. Tony Kwok Man-wai, Anti-Corruption
Consultant and former Deputy Commissioner of the Hong Kong
Independent Commission Against Corruption (ICAC)
12.00-13.30:
Lunch – room “Sapphire 1”
13.30-14.30:
Special Presentation 2 by Mr. Tony Kwok Man-wai
14.30-15:10:
Country Presentation (Brunei)
15.10-15.30:
Coffee/Tea Break
15.30-16.10:
Country Presentation (Cambodia)
16.10-16.50:
Country Presentation (Indonesia)- 187 -

Wednesday, 25 November
09.00-09.40:
Country Presentation (Laos)
09.40-10.20:
Country Presentation (Malaysia)
10.20-10.40:
Coffee/Tea Break
10.40-11.20:
Country Presentation (Myanmar)
11.20-12.00:
Country Presentation (Philippines)
12.00-13.30:
Lunch – room “Sapphire 1”
13.30-14.10:
Country Presentation (Japan)
14:10-14:50
Country Presentation (Thailand)
14.50-15.10:
Coffee/Tea Break
15.10-15.50:
Country Presentation (Vietnam)
19.00Reception hosted by AGO and KPK
Thursday, 26 November
09.00-10.30:
Chairman’s Summary & Discussion
10.30-10:45:
Coffee/Tea Break
10.45-11:00:
Closing Ceremony
Closing Address by AGO
Address by Mr. MORINAGA, Taro, Deputy Director, UNAFEI
Presentation of Certificates
11.00-12.30:
Farewell Lunch – room “Sapphire 1”
PM
Side event
End of the Seminar- 188 -

APPENDIX___________________________________________________________
PHOTOGRAPHS
Commemorative PhotographOpening Address by Mr. Adnan Pandu Praja, KPK
Opening Address by Ms. Laksmi Indriyah, AGO
Video Message from Director Yamashita, UNAFEI
Keynote Address by Deputy Director Morinaga, UNAFEI
Visiting Expert’s Presentation by Mr. Tony Kwok Man-wai
Presentation by the Delegation from Malaysia
Closing Remarks by Mr. Muhammad Yusfidli Adhyaksana, AGO___________________________________________________________

UNAFEI- 189 -

Commemorative PhotographOpening Address by Mr. Adnan Pandu Praja, KPK- 190 -

Opening Address by Ms. Laksmi Indriyah, AGO

Video Message from Director Yamashita, UNAFEI- 191 -

Keynote Address by Deputy Director Morinaga, UNAFEI

Visiting Expert’s Presentation by Mr. Tony Kwok Man-wai- 192 -

Presentation by the Delegation from Malaysia

Closing Remarks by Mr. Muhammad Yusfidli Adhyaksana, AGO- 193 -