1. CURRENT SITUATION OF CORRUPTION AND MONEY LAUNDERING IN MALAYSIA
COUNTRY REPORT ON
CURRENT SITUATION OF CORRUPTION AND MONEY LAUNDERING IN MALAYSIA

2. Respondents Corruption : Malaysia Anti-Corruption Commission
Money Laundering : Central Bank of Malaysia

3. Prevalence Of Corruption
Moderate and widespread among the public sectors
Slightly lower than previous years
CPI does not fairly reflects the reality of corruption
: score 4.3 / rank 60
2012 : score 49 / rank 54
GII does not fairly reflects the reality of corruption

4. Tolerant level Towards Corruption
The country’s population moderately intolerant towards corruption
Steps taken by the govt against corruption - strong
Corruption as one of the 6 National key Result Area
Enhance Enforcement agencies
Combat grand corruption
Transform Auditor General Reporting process; fast-tracking access to AG PA report (thrice yearly), Action Committee, Online dashboard, Putrajaya Inquisition
Enhance govt procurement process; myporecurement portal
Raise public support and enhance punlic education

5. Pattern Of Corruption Unpredictable
Occur equally in public and private entities

6. Types Of Corruption
Most prevalent : Petty, grand & corruption at enterprise level
Most common types(1-9): CBT, bribery, kickback, abuse of position, influence peddling, nepotism, embezzlement, extortion, forgery
Most corrupted sector(1-13) : Law enforcement, customs, state-owned enterprise, local govt, public service delivery, agriculture, environment, health, education, legislature, energy, judiciary, taxation
Greatest probability of corruption occurring at the government level : Procurement contracts, licensing, public fund disbursement procedures, electoral irregularities, revenues(taxes) collection

7. Petty Corruption Prevalence : moderate
Most likely involve rank and file employees

8. Grand Corruption Prevalence : Low
Most likely people involved : specific business interest and / or political group

9. Corruption At Budgeting Level
Corruption during bugdet formulation is primarily grand of political corruption : neither agree nor disagree
Unchecked and excessive executive discretion in budget process tends to create opportunities for political corruption : agree
Public Financial Management System weakness during budget formulation can increase the administrative corruption during budget execution : agree

10. Main Cause Of Corruption
To become rich as quick as possible
Unclear rules and loopholes for manipulation
Culture, customs and habits of giving bribes to get things done
Complicated and cumbersome administrative procedures
Low salary levels
Rapid population and economic growth
Lack of financial rules and procedures
Absence, weakness or failure in regulatory and legal system to combat corruption

11. Main Cause Of Corruption
“ Actually the main cause of grand corruption and petty corruption is derivrd from the patronage-client system” Answer : Strongly agree “ Weak accounting practices, including lack of timely financial management are conditions favorable for corruption

12. Consequences of Corruption
Damage done by corruption to the govt budget – Very serious
Damage done by corruption to the private sector
- Very serious
Damage done by corruption to the citizens
- Very serious

13. Corruption’s Proceed Mostly used to ; (1) Acquire assets
(2) Invest in real estate
(3) Bank deposits
(4) Leisure, social activities
(5) Stock investment

14. Enforcement by Anti-Corruption Agency
In terms of monitoring, priority is always essential

15. Management of Complaints
Complaints lodged with the agency is given highest priority
Recognize the role of whistle blower as extremely important
Whistle blowing a very effective avenue to lodge complaints of corruption

16. Current Situation of Money Laundering
Manageable level
Partially disagree : ML tends to increase in recent years
Partly agree : ML tends to be more sophisticated

17. Pattern of Money Laundering
Main pattern : Other
The common methods for ML include placement in banking system, using nominees of family members, setting up front companies and use cash transactions to conceal money trails
Segment having the highest risk of ML
(i) Money service business (2) Finance, banking
(3) Real estate

18. Pattern of Money Laundering
Most common method of ML
1). Cash transaction
2). Money exchange
3). Remittance
4). Through financial institutions
5). Casino
6). Real estate
Environment favorable for ML
- International economic integrating
- Use of cash and illegal money transfer

19. Offences Associated With Money Laundering
Embezzlement
Corruption
Drugs
Amount of monetary involved : More than USD100M

20. Root Cause of Money Laundering
Avoiding prosecution
Become legitimate
Evade taxes
Hide illegal accumulated wealth
Increase profit

21. Consequences of Money Laundering
Increase crime and corruption
Weakened financial institutions
Compromised economy and private sector
Negative impact on foreign investment
Reduce govt. tax revenue and weakened govt. control over the economy
ML caused serious but manageable economic and social consequences
Have serious impact on national security & national reputation

22. General Assessment of ML
With effective Anti-Money laundering/Counter Financing of Terrorism (AML/CFT) framework and countermeasures in place, money laundering in Malaysia is currently at manageable levels.

23. Thank You