COUNTRY REPORT ON
CURRENT SITUATION OF CORRUPTION AND
MONEY LAUNDERING IN MALAYSIA
Respondents
 Corruption : Malaysia Anti-Corruption Commission
 Money Laundering : Central Bank of Malaysia
Prevalence Of Corruption
 Moderate and widespread among the public sectors
 Slightly lower than previous years
 CPI does not fairly reflects the reality of corruption
2011 : score 4.3 / rank 60
2012 : score 49 / rank 54
 GII does not fairly reflects the reality of corruption
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
Pattern Of Corruption
 Unpredictable
 Occur equally in public and private entities
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
Petty Corruption
 Prevalence : moderate
 Most likely involve rank and file employees
Grand Corruption
 Prevalence : Low
 Most likely people involved : specific business
interest and / or political group
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
Main Cause Of Corruption
(1) To become rich as quick as possible
(2) Unclear rules and loopholes for manipulation
(3) Culture, customs and habits of giving bribes to get things done
(4) Complicated and cumbersome administrative procedures
(5) Low salary levels
(6) Rapid population and economic growth
(7) Lack of financial rules and procedures
(8) Absence, weakness or failure in regulatory and legal system to
combat corruption
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
Answer : Strongly agree
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
Corruption’s Proceed
 Mostly used to ;
(1)
(2)
(3)
(4)
(5)
Acquire assets
Invest in real estate
Bank deposits
Leisure, social activities
Stock investment
Enforcement by Anti-Corruption Agency
 In terms of monitoring, priority is always essential
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
Current Situation of Money Laundering
 Manageable level
 Partially disagree : ML tends to increase in recent years
 Partly agree : ML tends to be more sophisticated
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
Pattern of Money Laundering
 Most common method of ML
1).
2).
3).
4).
5).
6).
Cash transaction
Money exchange
Remittance
Through financial institutions
Casino
Real estate
• Environment favorable for ML
- International economic integrating
- Use of cash and illegal money transfer
Offences Associated With Money Laundering
 Embezzlement
 Corruption
 Drugs
Amount of monetary involved : More than USD100M
Root Cause of Money Laundering
 Avoiding prosecution
 Become legitimate
 Evade taxes
 Hide illegal accumulated wealth
 Increase profit
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
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.
Thank You