Ex-judge of Bangladesh now living in Malaysia

Former judge Motahar Hossain, who acquitted BNP Senior Vice-chairman Tarique Rahman in a money laundering case in November, is now living in Malaysia, Anti-Corruption Commission has learnt.

Hossain, while serving as a judge of Special Judges' Court-3,acquitted Tarique, also elder son of BNP Chairperson Khaleda Zia, in a money laundering case involving Tk 20.41 crore.

The judge left country 53 days after delivering the judgement in the money laundering case, ACC officials told journalists today.

The information came to light while an ACC team launched preliminary investigation against the "discrepancies" in the wealth statement of the judge who retired 43 days after delivering the judgement.

The ACC team came to know about the judge's present abode scrutinising the travel documents of Hossain, sources in the anti-graft body said.

Hossain left Bangladesh for Malaysia on January 8, said Harun-ur-Rashid, deputy director of the ACC, who is leading the ACC team in the investigation that started on January 20.

Meanwhile, the ACC interrogated two stenographers of two separate Dhaka courts to get information on the judge's wealth, Pranab Kumar Bhattacharya, public relation officer of the ACC told reporters at his office today.

The staff are: Md Abul Hossain of Speedy Tribunal-4 and Nurul Islam Mollah of Special Judges Court in Dhaka.

During delivering judgement on November 17 last year, the judge sentenced Tarique's friend and business partner Giasuddin Al Mamun to seven years in prison and fined him Tk 40 crore in the same case.

"[Tarique] did not conceal any information of this transaction in his wealth statement submitted to the Anti-Corruption Commission on June 7, 2007. So, the charges against him could not be brought under the Money Laundering Prevention Act-2002. Therefore, he is acquitted," the judge told the court during the pronouncement of the judgement.

"As a special tribunal judge, Motahar dropped the charges against Tarique, elder son of BNP Chairperson Khaleda Zia, in the laundering of Tk 20.41 crore to Singapore. In the same case, he sentenced Tarique's friend and business partner Giasuddin Al Mamun to seven years in prison and fined him Tk 40 crore.

In the judgment, Motahar said Tarique spent a portion of Tk 20.41 crore from Mamun's
Singapore account and mentioned it in his wealth statement, so he could not be charged."

Guidelines on Prevention of Money Laundering and Terrorism Financing for Capital Market Intermediaries

Money Laundering Probe Against Malaysians Abroad A Daunting Task - MACC

KUALA LUMPUR, March 24 (Bernama) -- A money laundering probe against Malaysians abroad can seem a daunting task for the Malaysian Anti-Corruption Commission (MACC) as it has to prove the offence committed in the country involved.

Its chief commissioner, Tan Sri Abu Kassim Mohamed said cooperation would only be given if the suspected case could be proven not politically motivated.

He said although many countries including Malaysia adopted the United Nations Convention Against Corruption (UNCAC) that was aimed at strengthening international law enforcement and judicial cooperation, they in turn became constraints in making the cooperation worked.

"We can only get the cooperation of another country in investigating a suspected money laundering case after we can give an assurance that the alleged offence happened in that particular country. Otherwise, legal cooperation is not granted.

"Secondly, there will be no cooperation if the probe is suspected to have a political motive," he said at a briefing entitled "Is the MACC Credible?" organised by the Malaysian National News Agency (Bernama) here Monday.

He said there were countries which were willing to provide the information required while others made things difficult for MACC officers.

Abu Kassim said it was also difficult for the MACC to investigate corruption offences involving foreign nationals buying properties in Malaysia or Malaysians buying real estates abroad.

"We're bogged down by legislations. The general feeling is that when Malaysians buy properties overseas, they should be investigated. It's not true that we do not want to investigate them, but when it involved another country, technically it is difficult to pursue," he said.

He said in minimising the limitations when carrying out investigations abroad, maintaining rapport with international anti-corruption agencies was important.

"Internationally, we have good relations with anti-corruption agencies in many countries on informal basis, including countries that protect their confidentiality," he added.

-- BERNAMA

Tighten checks on politically exposed persons

Malaysians have witnessed series of anti-corruption and money laundering operations conducted by the Malaysian Anti-Corruption Commission (MACC). On Dec 26, 2013, the MACC confirmed that a senior police officer with the title ‘Datuk’ had his statement regarding a RM6 million money-laundering case taken. Shockingly, the senior police officer was merely one amongst some 60 policemen whowere  under investigation as they were suspected for collecting bribes from operators of illegal business in the capital city.

Next, on Jan 7, 2014, two diplomats attached to the Malaysian Embassy to the United States in Washington were investigated under the Anti Money Laundering and Anti-Terrorism Financing Act 2001 for making fraudulent claims more than two years ago. They are accused of making false travel and logistic claims amounting to US$126,000 (RM378,000) for their expenses at the APEC Summit in Hawaii in 2011.

Think-tank Political Studies for Change (KPRU) welcomes MACC’s seriousness and earnestness in tackling corruption, particularly through the channel of money-laundering. Nonetheless, KPRU notes that the determination of MACC would most likely be less fruitful one as it is not yet given prosecutorial powers.

Highlights of anti-money laundering amendments

In this regard, attention should be placed on the existing law in dealing with financial crimes with economic effects like money laundering. In Malaysia, the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 has been enforced since Jan 15, 2002 to curb any money laundering activities through provision of money laundering offences, measures to prevent money laundering and terrorism financing offences, as well as asset forfeiture.

On  Dec 4 2013, Anti-Money Laundering and Anti-Terrorism Financing (Amendment) Bill 2013 was brought to Parliament for the first reading. The bill, it is believed will be debated in the coming Parliament session in March. Prior to this, Bank Negara Malaysia (BNM) has proposed to amend the Act in order to further strengthening the financial system in Malaysia.

At the 5th International Conference on Financial Crime and Terrorism Financing (2013) on Oct 23, 2013, assistant governor of BNM, Abu Hassan Alshari Yahaya said that BNM has issued revised policies on anti-money laundering in September 2013. According to him, the integral component of the revised anti-money laundering policies is the introduction of an obligation for reporting institutions to adopt a risk-based approaching in identifying, assessing, and understanding the money laundering and terrorism financing risks of respective reporting institutions.

Proper assessment and understanding of the risks is said to be enabling reporting institutions to tailor an appropriate risk controls and establish proper policies and procedures to mitigate the risk. Moreover, the revised policies also focused on refining Customer Due Diligence (CDD) requirements to reflect the varied risk levels. The revised policies also aimed to address implementation issues faced by both the reporting institutions and the supervisors as well as to incorporate Financial Action Task Force (FATF) requirements under the revised standards.

In fact, there is replacement of Section 14′s ‘Report by reporting institutions’ and section 16′s ‘Customer due diligence’ in the Bill brought to Parliament, which respectively imposes on a reporting institution an obligation to promptly report to the competent authority any suspicious transaction, and a reporting institution is not allowed to open or maintain any suspicious accounts. Overall, it imposes more stringent enforcement and heavier penalties such as extended sentence of imprisonment against whoever involved in illicit activities, in particular money laundering and terrorist activities.

Keep an eye on politically exposed persons (PEP)

Notwithstanding, KPRU finds that the Anti-Money Laundering Act has somehow overlooked certain groups of people who are deemed to be “higher risk individuals”, especially “politically exposed persons” (PEP) like a prime minister and his family members, a chief minister/menteri besar and his family members, a minister and his family members and so on. Above all, by the virtue of their position and they influence that they may hold, a politically exposed persons generally presents a higher risk for potential involvement in bribery and corruption, which are intertwined with money laundering in the Malaysian context.

According to the Anti-Money Laundering Examination Manual of United States’ Bank Secrecy Act, being one of the reporting institutions, bank should take all reasonable steps to ensure that they do not knowingly or unwittingly assist in hiding or moving the proceeds of corruption by senior foreign political figures, their families, and their associates. Heavy fines would be imposed on those reporting institutions for conducting business with politically exposed person without following adequate and enhanced due diligence processes.

As an example, Riggs Bank – a Washington, DC based commercial bank – was fined US$25 milion in 2004 for failing to report suspicious transactions in Washington held by the government of Equatorial Guinea and by Saudi Arabian diplomats. In addition, Riggs Bank was also investigated as a recent US Senate report has revealed that Riggs executives attempted to help former Chilean dictator, Augusto Pinochet disguise his assets from federal prosecutors when Pinochet’s accounts were ordered frozen by court orders as he was under house arrest in London after being indicted in Spain in 1998 on charges of crimes against humanity. Pinochet’s accounts at Riggs Bank were forced to be closed due to pressure from the Office of the Comptroller of the Currency (OCC) in 2002.

In fact, the BNM Standard Guidelines on the Anti-Money Laundering Act (paragraph 5.10) does provide for enhanced due diligence measures for higher risk customers. As a minimum, the enhanced due diligence process involves obtaining more detailed information from the customer through publicly available information, particularly regarding the purpose of transaction and source of funds, and also to obtain approval from the senior management before establishing the business relationship with the customers. Apart from politically exposed persons, the other higher risk customers also comprised of high net worth individuals, non-resident customers, customers from locations known for their high rates of crime, as well as customers from countries or jurisdictions with inadequate anti-money laundering laws and regulations.

Despite of the existing guidelines, Malaysian have yet to see enhanced enforcement on this particular issue. What remains common is that: reporting institutions such as banks and other financial institutions, as well as non-financial businesses and professions consisted of lawyers, accountants, company secretaries and licensed casino are still remained vulnerable to money laundering activities and continued to be exploited to conceal the source of ill-gotten funds, especially the illegitimate wealth of those bigwig like politically exposed person. Crucially, when great power and authority have been bestowed to those ministers in terms of law enforcement, is it possible that the Anti-Money Laundering Act can be enforced justly without fear or favour by taking actions on politically exposed person?

In conclusion, given the amendment of the Anti-Money Laundering Act has imposed obligation to report on reporting institution and provided customer due diligence, the guidelines by BNM on anti-money laundering and anti-terrorism financing should be taken into serious consideration and to be fully applied and utilized in combating related illegal activities. Law enforcement agencies should really work hand in hand with MACC, essentially by keeping a close eye on bigwig like politically exposed person, as a mean to weed out graft effectively.

From: Think tank Political Studies for Change (KPRU)