MALAYSIANEW AND EMERGING FORMS OF CORRUPTION AND THE
EFFECTIVE COUNTERMEASURES
Yuhafiz Bin Mohd Salleh *I. INTRODUCTION AND EMERGING CORRUPTION
New threats of crime including corruption are evolving rapidly at the same pace of the newtechnology. This crime is progressing intensively, and the modus operandi have also changed.
Therefore, as law enforcement in anti-corruption, we need to buff up on our methods andinvestigation skill to overcome such threats.
Corruption happens everywhere and involves multiple levels of society. From politicians
misusing public funds to government officials involved in bribes in exchange for services,
corruption can happen anytime, anywhere and behind closed doors. Furthermore, the rewards
can be in different kinds of assets, not only in cash or properties but in bonds, shares and evenin bitcoins. The same scenario is happening in the private sector where people at all levels arealso involved in soliciting, accepting of bribes and misuse of power. The higher the position,
the bigger the cash cows flooding in and the higher the value of the bribe taken!
The cost of corruption exceeds its monetary value in that it infringes your rights and therule of law. Corruption has devastating socio-economic impacts for a country and certainly has
a big political impact. Corruption is one of the causes for the people being denied the expected
service delivery access, uneven distribution of wealth and leakages of the nation's resourcesand government funds.
Sharing the experience of MACC in investigation of the 1MDB case, the investigator
detected that the money was transferred to numerous accounts in various countries before it
ended up in the suspect’s account in Malaysia. This is a classical case where the crime-scheme
was very well organized using forged documents and shadow companies. The shadow
company was purposely formed using the same name as the genuine company. The suspectholds multiple strategic posts in Government, and the government-linked company misuses its
power and position to collude with well-known businessman to syphon the money out ofMalaysia. The money trail showed that the money ended up in the suspect’s bank account, andthe company now struggles with a very high debt. With good collaboration and cooperationfrom the countries, MACC managed to complete the investigation and the suspect was chargedin Court. The suspect was found guilty and sentenced to 12 years’ imprisonment and a fine of
MYR210 million.
Corruption is an inherited crime. It has happened for ages and has caused the fall ofcivilizations. Before such collapse, the crime only involves “petty corruption” and does not
involve cross-border links, syndicated crime or multiple transactions through bank institutions.
Based on my experience, the current ways of crime are well-organized and difficult toinvestigate. Enforcement agencies will face a very tough task to penetrate such schemes. The
current scenario of the corruption case involved syndicated/organized crime, cross-border*Chief Senior Assistant Commissioner, Malaysian Anti-Corruption Commission, Malaysia.

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transactions, proxy/shadow companies and hid behind political funds, inexperienced judges,
weak political will, weakness of law and weakness of investigation techniques.
II. EFFECTIVE COUNTERMEASURES
A. Enforcement Technique/Model
The objective of an investigation is to collect the evidence and ensure it is admissible incourts. It is important for the enforcement agencies to have an efficient technique/model ofinvestigation. Weak techniques or strategies of investigation may result in failure, and thesuspect will avoid conviction. To meet the investigation’s objectives, the Malaysian AntiCorruption Commission (MACC) implemented Intelligence Based Investigation (IBI) andManaging Team Based Investigation as techniques in investigation.
IBI was used in the pre-operation stage to collect all the relevant information like general
information of the suspect or witness, companies’ details, list of assets ownership and modus
operandi (MO). This information will be useful to the investigation team. While MTI 1 is usedin the operation and post-operation stage. Its focus is on management of the case, which
involves the planning and monitoring of the investigation process, determining the action to betaken and identifying the witnesses and evidence. MTI ensures the positive outcome of theinvestigation and shortens the investigation period through tight monitoring and optimizationof manpower.
In addition, MACC also emphasizes asset tracing to identify the proceeds owned illegally,such as by means of corruption or as a result from any other crime. All the illegal proceeds will
be forfeited. The tracing of assets is done during the pre-operation stage using multiple sources
like banking institutions, land offices, local authorities and other relevant authorities.
B. Law Reform
Strict laws are required to combat corruption and increase integrity among society. The
corruption law in Malaysia has undergone a process of change and amendment. The
culmination of these changes was the 2009 passage by the House of Representatives and Senateof the Malaysian Anti-Corruption Act 2009 (MACC Act 2009). This act enhanced the AntiCorruption Act 1997 (ACA 1997), which led to the establishment of MACC, formation of theindependent panel as a check and balance mechanism and amendments to some less-clear partsof the previous act.
In 2018, MACC Act 2009 again underwent changes when section 17A (corporate liability)
and section 41A (admissibility of documentary evidence) were added. The aim of section 17Ais to foster the growth of a business environment that is free of corruption and to encourage allcommercial organizations to take reasonable and proportionate measures to ensure theirbusiness does not participate in corrupt activities for their advantage or benefit. Meanwhile,
Section 41A provides that any document obtained by the Malaysian Anti-Corruption
Commission shall be admissible in evidence in any proceedings under the principal Act,notwithstanding anything to the contrary in any other written law. This provision appears wide
enough to include illegally obtained documents and privileged documents.
The issue of witness intimidation has been brought up by many countries many years ago.
Witness-protection assistance is important to help protect the witness from any threats which
1

See MACC’s Guidelines on MTI.

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might be made by persons whom the witness might testify against. Threat or intimidation to
the witness can take place in many ways. Therefore, the protection assistance should be able toovercome each and every threat so as to effectively shield the witness from intimidation. Theintroduction of the Witness Protection Act in Malaysia could be regarded as one approach
adopted by the government to overcome the above problem. The Witness Protection Act 2009
took effect on 15 April 2010. This ensured that witnesses could properly testify, without being
fearful of the accused or any party. Hence, the law aims to avoid cases in which prosecution
fails when no witness is daring enough to come forward because he or she feels threatened.
Furthermore, in 2010, the Whistleblower Act 2010 was enforced in Malaysia. This act is tocombat corruption and other wrongdoings by encouraging and facilitating disclosures ofimproper conduct in the public and private sectors, to protect persons making those disclosuresfrom detrimental action, to provide for the matters disclosed to be investigated and dealt withand to provide for other matters connected therewith. The effectiveness of this act, has boosted
the confidence level of the public and resulted in an increase of the amount of corruption
information provided to the MACC.
C. Special Law on Beneficial Ownership (BO)A beneficial owner is an individual or natural person who ultimately owns or controls anentity. In Malaysia, business entities play an important role in economic growth. However, thelegal structure of this business such as Sdn Bhd, or Limited Liability Partnership, is susceptible
to being misused for carrying out illicit activities such as money-laundering, terrorism
financing, corruption and others. The individuals that hide behind such businesses employ
devious means to avoid their identities from being detected.
The Companies Commission of Malaysia (SSM) is the Registrar issuing the Guidelines
Reporting Framework for Beneficial Ownership of Legal Persons, which came into effect on
1 March 2020 and established a transitional period of 1 March 2020 to 31 December 2020.
During the transitional period, entities need to obtain, keep and update the beneficial ownership
information at the entity level. After the transition period, they are required to obtain, keep andupdate the beneficial ownership information and inform the Registrar. However, as of now, theperiod has been extended to a later date to be determined by the Registrar to coincide with theenforcement date of the proposed Companies (Amendment) Bill and Limited Liability
Partnerships (Amendment) Bill.
D. Special Law on Anti-Jump Party
On 9 December 2020, Datuk Seri Akhbar Sattar, former President of Transparency
International Malaysia (TI Malaysia), stated that “Malaysia should enact an Anti-Party
Hopping law to overcome the ‘political pandemic’ in the country.” He said the rather regularcases of party-hopping among elected representatives at both Parliament and State Legislative
Assembly levels should no longer be allowed to persist as they undermined the stability of thegovernment. Apart from this, such party-hopping would also lead to corrupt practices. Whenthey hop from one party to another, it could also lead to the collapse of a ruling government,
and they do this because they are paid to do so.
Many Malaysians seem to agree with the above statement, and they believe that the act ofhopping from one party to another party was influenced or inspired by something valuable likemoney (huge sums), positions or projects. The act of hopping by politicians (dubbed as “frogs”)
is considered as betraying the trust given by the voters and as being selfish. Money is a major

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incentive for elected representatives to party hop. Though hard to prove, money is certainly a
big reason why Malaysia is experiencing political instability.
Malaysia needs a law to stop this unethical behaviour, and history was made in Malaysia
on 4 October 2022, after the King consented to the enforcement of the anti-hopping law, which
entered into force on 5 October 2022. The law, Constitution (Amendment) (No. 3) Act 2022
will be enforced against any Members of Parliament who switch parties.
E. Special Law on Political Funding
Political funding, or political financing, refers to how political parties or politicians raisemoney for election campaigns and other activities. A political funding law regulates howparties and politicians receive and use money by ensuring disclosure of the source of funds anddonations as well as the amounts received. Proponents of the law argue that it is essential forholding political parties and politicians accountable, ensuring transparency over funds andpreventing misappropriation, bribery, fraud or abuse of power where funding is concerned.
Former President of Transparency International Malaysia Datuk Seri Akhbar Sattar also
pointed out that a law on political funding to check and balance the risks of corruption among
politicians that had long been debated about should be enacted without further delay. Such law
would be an effective means to curb abuse of power, corruption, breach of trust anduncontrolled political funding.
On 19 May 2022, the Malaysian Prime Minister announced that Special Cabinet Committee
on Anti-Corruption had agreed in principle to a political funding bill, adding that the proposal
would be discussed in the Cabinet before further engagement with political parties. The Law
Minister announced that the bill on political funding will be tabled in the House ofRepresentatives and is hoped to be passed before the 15th General Election.
F. The Judiciary
On August 2022, the Special Committee on Corruption (a committee formed under theMACC Act 2009) proposed the creation of the Anti-Corruption Court as an enhancement tothe existing Special Session Court of Corruption. Currently, there are 18 Special Session Courtsin Malaysia. There is a need for an Anti-Corruption Court, or a court on corruption to beestablished specifically, from (the level of) the Sessions Court, the High Court, the Court ofAppeal and the Federal Court, with judges who are experts and who are not changed
periodically. This is to ensure the country has expertise, as well as the precision to run a court
specifically to handle corruption cases.
Currently, trials related to corruption are considered ordinary trials, without any priority
accorded to them. The establishment of the Anti-Corruption Court (High Court, Court ofAppeal and Federal Court) will speed up the trials and help to reduce the number of pendingcases. The appointment of experienced judges is expected to uphold justice, transparency andintegrity, and they should not be easily compromised. Ridiculous excuses and requests topostpone scheduled proceedings would be rejected. Justice delayed is justice denied! This
proposal was in the attention of the Government of Malaysia. I hope the Malaysian Government
will give due attention to this and not delay its implementation.
G. Government Administration
In 2018, an asset declaration portal administered by MACC was launched whereby thegovernment agreed that all Ministers and Deputy Ministers would be required to declare theirassets. Further, this policy was enhanced by the current Prime Minister of Malaysia on 19- 102 - 102 -MALAYSIA
September 2022, whereby it was announced that Members of Government Linked Companies(GLCs), Members of Linked Investment Companies (GLICs) and Judiciary Members arerequired to declare their assets to MACC as well. However, these are still being researched by
MACC and to be presented later.
H. Governance, Integrity and Anti-Corruption Centre (GIACC)
GIACC formed on 1 June 2018. GIACC’s objectives are to plan, coordinate and monitor
the implementation of the policies about anti-corruption and good governance initiatives. Thecoalition has created the institutions and pathways, and articulated the objectives and norms
that warrant documentation and assessment. GIACC reports directly into the Prime Minister’sOffice, which underscores its commitment to all efforts to strengthen governance in Malaysia
post GE14.
GIACC also launched the National Anti-Corruption Plan (NACP) on 29 January 2019 tocreate a corrupt-free nation through specific goals which are the Accountability and Credibilityof Judiciary, Prosecution and Law Enforcement Agencies, Efficiency and Responsiveness in
Public Service Delivery, and Integrity in Business. The NACP aims at establishing practicaltargets based on the initiatives to address national issues of corruption, integrity andgovernance to be undertaken during the next five years.
I. Curbing the Cartel
Elite corruption is the most difficult to combat because of the power at the disposal of theelite unless there is a major political upheaval. Based on the corruption trend in Malaysia overthe last five years (2013-2018), 2 the public sector has been the most vulnerable to corruption.
Compared to the vulnerability rate of 17.06 per cent in the private sector, the public sector
showed a more alarming rate of 63.30 per cent. It was discovered that such a high vulnerability
to corruption in the public sector stemmed from weak governance in its procurement practices,
legal enforcement agencies and administration. This fact was further substantiated by theMACC’s statistics. The agency found that between 2015 and 2018, a total of 30 top civil
servants had been arrested for corruption charges. Their involvement does not only cause losses
in the public funds, but more crucially it questions the public sector’s integrity in ensuring thecountry’s security and prosperity.
Recently, however, a new style of crime has been developing widely, which is corruption
by cartel. A group of crime perpetrators are working together to get contracts from thegovernment by manipulating their quotation and price submitted during the tender process ofthe government contract. When the selected contractor are chosen, pricing are manipulated,
services provided are minimal and sometimes the jobs are not performed at all. MACC’sprevention section managed to overcome this issue by advising government on short-term andlong-term remedies. Although it shall never eliminate these cartel issues, it helps government
offices to control and restrain further the losses to the value of government contracts.
Integrity pledges have also been introduced for public and private offices in Malaysia. Thisis a pledge taken by the leader of the office leading the whole staff, including officers and evenboard members, to give their oaths to refrain from taking bribes or becoming engaged incorruption within the office. To date, there are 1,828 agencies that have taken the oath.

2

Statistics from MACC’s records.

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III. CONCLUSION
It is apparent that corruption not only ruins the corruptors, but it can go beyond to ruin theentire country. Malaysia has come under the spotlight for being involved in mega scandals.
These scandals have seen billions of ringgit being syphoned off from the country. Syndicatedcases involved high-level corruption and lack of governance on funds amounting to millionsof ringgit affected multiple countries. The adverse effects of corruption on countries’ economic
development are widely acknowledged. Such large-scale corruption will also affect the overallpublic confidence, which will shake the confidence of investors, reduce the productivity ofpublic expenditures, distort the allocation of resources and, thus, lower the economic growthof countries. Therefore, to combat corruption in full force, government plays a critical role inensuring resources (e.g., human resource and financial) as well as access to these resources are
made available to all the relevant stakeholders to undertake the various initiatives. We at theMACC do hope that the responsibility in achieving Malaysia as a corruption-free country is
not only on us solely but on other public and private agencies as well. In the end, the benefits
will be shared by all.

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