MARCH 4 — Malaysia is a signatory to the United Nations Convention Against Corruption (UNCAC). The UNCAC is an international instrument to address the scourge of corruption at the global level.
The adoption of the UNCAC in 2003 sent a clear message that the international community was, and continues to be, determined to prevent and control corruption. It should warn the corrupt that betrayal of the public trust will no longer be tolerated.
The UNCAC is the international community’s affirmation of the importance of core values such as honesty, respect for the rule of law, accountability and transparency in promoting development and making the world a better place for all.
A landmark instrument, the UNCAC introduces a comprehensive set of standards, measures and rules that all countries can apply in order to strengthen their legal and regulatory regimes to fight corruption. It calls for preventive measures and the criminalisation of the most prevalent forms of corruption in both public and private sectors.
This year is the 20th anniversary of the coming into force of the UNCAC.
The UNCAC is in 8 Chapters (I – VIII). Chapter III is on Criminalization and Law Enforcement. The Chapter recognises the importance of having a means by which to deter and punish corruption.
The Chapter requires States to “adopt such legislative and other measures as may be necessary to establish as criminal offences” of bribery of national and foreign public officials and officials of public international organisations and to “consider adopting such legislative and other measures as may be necessary to establish as a criminal offence” such offences as illicit enrichment.
On the offence of illicit enrichment, Article 20 states as follow:
“Subject to its constitution and the fundamental principles of its legal system, each State Party shall consider adopting such legislative and other measures as may be necessary to establish as a criminal offence, when committed intentionally, illicit enrichment, that is, a significant increase in the assets of a public official that he or she cannot reasonably explain in relation to his or her lawful income.”
Even though Article 20 recommends that member States criminalise illicit enrichment, some – including Malaysia – have yet to specifically legislate on the matter.
The Malaysian Anti-Corruption Commission display cash in diverse currencies amounting to RM170 million, 16kg in gold bullions, luxury watches, and various pieces of jewellery obtained during a recent seizure during a news conference in Putrajaya. — Picture by Choo Choy May
Despite the term “illicit enrichment” being referred to in Article 20 as a “significant increase in the assets of a public official that he or she cannot reasonably explain in relation to his or her lawful income”, there is “no unanimous applied definition of illicit enrichment”.
As such, based on his research on the laws around the world, Andrew Dornbierer offers the following definition:
“The act of illicit enrichment can be broadly defined as the enjoyment of an amount of wealth that is not justified through reference to lawful income”. (Dornbierer, A., 2021. Illicit Enrichment: A Guide to Laws Targeting Unexplained Wealth. Basel: Basel Institute on Governance. Available at: https://learn.baselgovernance.org/pluginfile.php/51644/mod_resource/content/8/Illicit_Enrichment_Main-Text-PDF-pages.pdf)
The phrase ‘not justified through reference to lawful income’ refers to an absence of evidence that demonstrates the legitimate or non-criminal sources from which the enjoyed wealth was derived (such as salaries, profits from legitimate businesses, pension payments, inheritances, gifts or even loans from banks).
Dornbierer offers a simple example:
If an individual worked as a public tax assessor from 2010 to 2020 and earned a cumulative total salary of $400,000 during this period, but instead was found to possess $4,000,000 in his bank account at the end of this period, then if it is not possible for the individual to demonstrate that the additional $3,600,000 was derived from other existing sources of legitimate income during this time (such as a loan from a bank, earnings from a side business, or the receipt of inheritance) then under an illicit enrichment law, the court may presume that this unjustifiable increase in wealth has not been derived from lawful sources and will impose a relevant sanction, even if no evidence of underlying or separate criminal activity is presented to the court.
Simply put, illicit enrichment is wealth that is not lawful income in the absence of evidence that shows otherwise.
Dornbierer’s book offers a comprehensive guide to illicit enrichment laws and their application to target unexplained wealth.
What is unexplained wealth?
It refers to valuable assets belonging to officials – or others in positions of power and influence – that are clearly incommensurate with their publicly-declared earnings or known business interests. (See Organized Crime and Corruption Reporting Project (OCCRP), “What is ‘unexplained wealth’?”)
The term can be explained in a very simple mathematical formula:
Unexplained wealth = Total wealth less lawfully acquired wealth
Thus, a person whose total wealth is RM5 million, and whose lawfully acquired wealth is RM2 million, can be said to have unexplained wealth of RM3 million.
The law on unexplained wealth places the burden on the individual, rather than the enforcement authority, to prove how he or she has accumulated his or her wealth. He or she is to produce evidence to verify the sources of the wealth, failing which the property may be recoverable by civil forfeiture.
A court order known as Unexplained Wealth Order (UWO) under the law allows enforcement authorities to confiscate assets without ever having to prove that the property was obtained from criminal activity.
According to Dornbierer, both terms – illicit enrichment and unexplained wealth – are currently being used interchangeably to refer to the exact same, or an incredibly similar, set of circumstances.
Any law on illicit enrichment and unexplained wealth is unsurprisingly controversial.
Some scholars view the law as critical to combat corruption and other crimes and the recovery of assets while others view it as a violation of common legal principles.
But Dornbierer notes the effectiveness of the law in the following words:
“[T]here is no doubt that [the] laws have remarkable potential in the field of asset recovery. Following the successful application of these types of laws in a number of jurisdictions, it is no surprise that an increasing number of countries are turning to these mechanisms to target corruption and criminality in general, and recover proceeds of crime.”
Malaysia may yet to count as one of those increasing numbers of countries. But the Pakatan Harapan (PH) government in 2019 – to its credit – did consider introducing such legislation as recommended by Article 20 UNCAC.
Then Finance Minister Lim Guan Eng said that measures like UWOs would enable the government to seize “extraordinary assets” owned by individuals, especially politicians.
Given recent media reports of the Malaysian Anti-Corruption Commission seizing of up to RM170 million worth of cash and other valuable items as part of its probe in an ongoing corruption investigation involving hundreds of millions of ringgit in government funds, Malaysia should seriously consider “adopting such legislative and other measures as may be necessary to establish as a criminal offence” (Article 20) the offence of illicit enrichment and introducing legislation on unexplained wealth.
Such measures should affirm Malaysia’s commitment to improving its Corruption Perceptions Index (CPI) ranking after it could only manage to retain a score of 50 to stay 57th globally in 2024.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
