THE LATEST REGIONAL TRENDS IN CORRUPTION AND EFFECTIVE
COUNTERMEASURES BY CRIMINAL JUSTICE AUTHORITIESMohamad Zamri Bin Zainul Abidin *I.

INTRODUCTION

As we all know, crime is evolving and so do the corruption trends. Traditionally, corruption
refers to moral impurity, but the concept of corruption has changed over time and varies acrosscultures and different jurisdictions. Corruption is a phenomenon that can occur in any country inthe world. No matter whether the country is poor or prosperous, democratic or authoritarian, bigor small, it cannot avoid corruption. Corruption is one such problem that has been prevalent inour country for ages. Dishonesty of the people in power and bribery at various levels is whatleads to corruption. What people do not realize is that their attempts at small personal gains are
greatly affecting the country's economic and social development.
Forms of corruption vary but include bribery, extortion, cronyism, nepotism, parochialism,
patronage, influence peddling, graft, and embezzlement. Corruption may facilitate criminal
enterprise such as drug trafficking, money laundering, and human trafficking, though it is not
restricted to these activities.
The Malaysian Anti-Corruption Commission (MACC) is one of the anti-corruption agencies
in the world that is venturing to combat corruption. What I am going to share here is more thanmost people know: how we receive information, conduct investigations and case projects andthe end results. Corruption trends are evolving, people are more educated, smarter and, with thehelp of the new technologies, it is even easier to engage in corruption. To keep abreast with it,
we need to stay ahead of the criminals.
II. PRACTICAL ASPECTS OF INVESTIGATING THE NATURE OF CORRUPTION
While great information can be received from whistle-blowers, corruption often goesunchallenged when people do not speak out about it. Witness accounts offer invaluable insights
into corruption and are powerful tools in the fight against it. From exposing multi-million-dollar
financial frauds to dangerous medical practices, whistle-blowers play a crucial role in saving
resources and even lives.
But in some countries, blowing the whistle can carry high personal risk — particularly when
there is little legal protection against dismissal, humiliation or even physical abuse. Controls on
information, libel and defamation laws, and inadequate investigation of whistle-blowers' claims
can all deter people from speaking out.
*

Deputy Commissioner, Malaysian Anti-Corruption Commission, Malaysia.

- 29 -

Whistle-blowers are less likely to report workplace misconduct when their employers do notprovide clear internal reporting channels. And in some settings, whistle-blowing carries
connotations of betrayal rather than being seen as a benefit to the public. Ultimately, societies,institutions and citizens lose out when there is no one willing to cry foul in the face of corruption.
The Whistleblower Protection Act 2010 was passed by Parliament in June 2010 and brought
into force on 15 December 2010. The law was enacted to combat corruption and otherwrongdoing by encouraging and facilitating disclosures of improper conduct in the public andprivate sectors, to protect persons making those disclosures from detrimental action, to provide
for the matter disclosed to be investigated and to provide remedies connected therewith. The
objective of this act is to give protection to the whistle-blower in the form of confidentiality of
their information, immunity from civil and criminal action and protection from detrimental
action being taken against them.
The Whistleblower Protection Act 2010 provides protection to whistle-blowers who
voluntarily come forward to report or reveal information on corruption activities. This Act also
encourages the public from all sectors to disclose corruption related activities. The identity of thewhistle-blower and the information provided are kept confidential from any party. Whistleblowers are also given immunity from any civil, criminal or disciplinary action due to revealing
the act of corruption.
The law covers any member of the public and private sectors who discloses wrongdoing,such as abuse of authority, violation of laws and ethical standards, danger to public health orsafety, gross waste, illegality and mismanagement. The disclosure should be made in "goodfaith" based on "honest and reasonable grounds at the material time" without necessitating hard
evidence from the whistle-blower. The duty of gathering evidence will be tasked to theinvestigation unit of the enforcement agencies to ensure that the whistleblower is notcompromised. However, whistleblowers can provide evidence if it is legally available throughthe course of their work.
Disclosure of confidential information is punishable by fine not exceeding RM 50,000 or
imprisonment for a term not exceeding ten years or both. A whistle-blower will not be subject toany civil action or criminal liability, and no administrative process can be taken against thewhistle-blower for making disclosure of improper conduct. Under the act, no person shall take
detrimental action against any whistle-blower or person related to or associated with the whistleblower in reprisal for a disclosure of improper conduct.
III. POWERFUL INFORMATION OF THE WHISTLEBLOWER
A. OPS B2'OPS B2', is a project-based investigation under the Special Taskforce (STF), Attorney
General Chambers (AGC) and being reported directly to the ex-AG and monitored by the MACC
Chief Commissioner and his Deputy (Operations).

- 30 -

This case had started in 2012, and information about the case was derived from the whistleblower regarding the abuse of facilities in Port Klang Free Zone (PKFZ) by organized syndicates
involving smuggling of some high-risk items such as alcohol and cigarettes. Furthermore, there
is also information from the public which revealed that the syndicates were involved directly inthe smuggling activities in PKFZ by bringing in items such as alcohol and non-taxable cigarettes
into the Malaysian market. Thus, the STF with MACC have come together in comprehensiveplanning to ensure and implement this task as a project-based case using "Intelligence &Analysis Based Investigation (IABI)". In this case, thorough covert operations had been done fora period of more than 1 year. The purpose of the covert operations is to ensure the modus
operandi and smuggling activities are clearly shown.
Instead of covert operations, we have also ventured into data analysis. We have derived thedata from the PKFZ system which is ZBI (Import) and ZB2 (Export) and Malaysian Customs
which is Kl, K2 and K8 forms from the 'target' companies themselves, showing that from 2011 to2014 there were losses of customs duties in the amount of MYR 2 billion. Bank data (suspects
personal and company accounts), CTR, STR and ITIS from Bank Negara Malaysia also played abig role in this analysis. All were merged together in order for us to obtain the most accurate
indicative decisions before the operations launch.
We have also initiated our 'Undercover Officer' (UCO) programme as value added to dataanalysis. Two officers were planted as general workers in PKFZ and were tasked to monitor themovement of the transport and containers in and out from the warehouse in PKFZ. Livemonitoring was also captured through CCTV from our bogus warehouse and the use of technicaldevices such as vehicle movement GPS (trackers) and cameras.
This operation involved almost 150 MACC personnel from a few states and divisions inMACC including the Prosecution Division.
The major operations launched on 3 September 2014. There was also involvement from theRoyal Malaysian Police (RMP), Bukit Aman Special Branch. It was a collaborative operation
launched together called 'Op Sting'. RMP assisted MACC to stop all the suspects’ lorries(Alcohol loading) headed out from PKFZ. RMP also assisted by interrogating the suspects on thesmuggling issues and corrupt payments to the customs officials.
The operations lasted for a month after the launch date. It later followed Ops B2 Phase 1,
Phase 2 and Phase 3. In the operation itself, there were 10 public persons being arrested and 34
customs officials remanded. Out of 10 arrested public persons, 6 of them were protected under
the Witness Protection Programme for 3 months.
Throughout the investigations, 32 senior customs officials and 1 public person were charged
under Section 17 a of the MACC Act 2009 and the Penal Code in Kuala Lumpur and Shah Alam
Sessions Court involving bribery of MYR 1,098,401 for 212 charges.
MACC managed to seize as cash in the amount of MYR 2,172,388.00, jewelry, 4 luxury
cars, 4 lorries, alcohol products valued at MYR 200,000.00 and froze the suspects’ bankaccounts with the value of MYR 18,132,337.00.

- 31 -

This is a parallel investigation of predicate offences under the MACC Act 2009 and Anti
Money Laundering offence of AMLATFPUAA 2001.
MACC is also proposing to Royal Malaysian Customs to enhance their ability in monitoringand handling the process of importing goods to the Free Trade Area (FTA) through the policy
review with the assistance from MACC Consultation and Inspections Divisions. This is toimprove the existing system and procedures and to avoid lack of monitoring in port and FTA.
B. OPS BS
At the end of 2014, MACC received information from another whistle-blower regarding
smuggling issues involving cigarettes, alcohol, cooking oil, diesel, petrol and human trafficking
in Sabah. This is due to corruption issues related to enforcement agencies there; as a result,
Malaysia lost billions of Ringgit in taxes avoided by the culprits.
Hence, the renamed STF called the AML Task Force instructed MACC to continue anothercovert operations analysis on smuggling in Sabah. Monitoring had been done in Sabah for about
8 months. 527 individual accounts and 361 company accounts were investigated throughout theperiods, which were later presented to the former Malaysian Attorney General, Tan Sri Gani
Patail. Then MACC was instructed to lead the operations under codename "OPS BS".
It was a joint operation consisting of MACC, Inland Revenue Board (IRB), Royal MalaysianPolice (RMP), Royal Malaysian Customs (RMC), Companies Commission of Malaysia (CCM),
Ministry of Domestic Trade and Consumer Affairs Malaysia (IQDNKK), Central Bank ofMalaysia (BNM), Cyber Securities Malaysia (CSM) and Eastern Sabah Security Command(ESSCOM). Technically this major operation involved 400 personnel from all the participatingagencies. Almost the same analysis approach was used in this operation, such as the use of CTR,
STR and ITIS data, RMC data, IRB data and data from CCM. This data was combined to ensure
the right target would be raided on the operation day.
The operations launched on 15 May 2015 concurrently in some Districts throughout Sabah
which included LABUAN, KOTA KNABALU, KENINGAU, TAWAU, SANDAKAN,SEMPORNA. On the same day, the amount of the frozen accounts totaled MYR
559,486,123,000.00, involving 1,623 accounts of individuals and companies. 51 locations wereraided, and 3 people were arrested.
MACC seized cash for MYR 465,428.53, jewelry and other currencies worth more than
MYR 1 million. MACC Sabah (State office) opened an investigation specifically for corruption
payments to public officials.
RMC also managed to seize 20 containers containing alcohol products and 600 master casesof cigarettes and their transportation. The KPDNKK also seized 746,871.3 liters of diesel, diesel
smuggling goods with the approximate confiscated value of MYR 1,025,614.38. For thisoperation itself, the IRB managed to collect taxes of more than MYR 30 million.

- 32 -C. OPS BORION
Ops Borion involved one of the most high-ranked politicians in Sabah (Sabah's former Chief
Minister). In this case, MACC had applied various approaches in the method of investigation,
which was tailored from the quality information of the whistle-blower and informers, the use oftechnical informational data from the Financial Intelligence and Investigation Division (FIED) of
the Central Bank of Malaysia (formerly known as the Financial Investigation Unit (FIU)), covert
investigations, international joint operations and the biggest mass arrest in MACC history.
One of the most crucial roles of the FIED is to spearhead the National efforts in combating
money laundering and serious crime by providing value-added contributions to national andinternational supervisory and enforcement agencies, formulation and implementation of acomprehensive national anti-money-laundering regime and promoting awareness of money
laundering and terrorism financing issues.
The database supplied (CTR/STR/ITIS) was fully utilized in analysing and specifying thecase. Instead of being a Chief Minister (CM), he also held a position at the Foundation of Sabah
Trust Fund. From 2003 to 2009, he awarded 147 timber concessions to his 8 proxies through 28
companies, and the payment was directed to Singapore and Hong Kong. The corrupt payments
were later being paid by the contractors to one of his trusted proxy UBS AG accounts in Hong
Kong, which is the total amount of USD 47.6 million. There were three (3) accounts opened forthis purpose in 2006 and 2007. The proxy who is also a prominent lawyer in Sabah was tied by
the document called "Letter of Trust", and the deeds stated that this former CM was thebeneficiary of the said accounts.
In March 2008, the trusted proxy was instructed to transfer all the funds from UBS AG
Hong Kong to UBS AG Zurich. The transactions were discovered by JFIU Hong Kong in preSTR disclosure and were disallowed. This investigation was also being conducted by theIndependent Commission Against Corruption (ICAC) Hong Kong whereby they had made an"ex-parte application" in the High Court of Hong Kong involving the three accounts and thefunds stated. The applications were granted, and its last from 30 October 2008 and wascontinued twice until 21 October 2011.
MACC launched an operation in May 2010, and 8 proxies were arrested. The arrest wasconducted in Sabah, and the remand proceeding was conducted in Putrajaya. All of the proxies
were remanded for 7 to 11 days; all of them cooperated with MACC during the remand period.
On 5 November 2018, this former CM was charged in Kuala Lumpur Session Court for 35
corruption charges under Section I I(a) of the Anti-Corruption Act 1997 for receiving bribes
amounting to USD 63 million or MYR 243 million. The court allowed him to be released on bailfor MYR 2 million and both his passport and diplomatic passport were surrendered to the court.

- 33 -