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Tuesday, September 26, 2023

Criminal law reforms can aid recovery of ill-gotten gains from kleptocrats

 

Based on my years of experience as a lawyer and a senior judge, I have observed that lawmakers, especially in countries where the corruption index is high and ethical standards low, are more inclined to impose mandatory prison terms for white collar crimes and minor criminal offences.

Such inclinations point to a regressive system of law which deter investors. Modern societies, however, have rejected them in favour of more effective alternative punishments.

In fact, imprisonment is a colonial practice and was once restricted only to common law penal offences. In my view, it should not be invoked as a priority form of punishment under our constitution for offences introduced after Merdeka.

For example, any wrongful gain is a tort, which is a civil law wrong. It only becomes a crime through legislation. Attempting to legislate all torts into crimes with mandatory imprisonment as punishment is both harsh and repulsive under our constitutional framework.

In addition, imprisonment burdens taxpayers, causes the family of a wrongdoer to suffer social injustice, and, more often than not, is not conducive for the rehabilitation of offenders.

Imprisonment for corporate crimes is also unlikely to prevent the country from any ensuing financial loss and from economic ruin arising from the crime.

Corruption and the corrupt practices of past political leaders, if charged on the basis of selective prosecution or political persecution, may lead to political instability, and  result in divisions and mistrust in society. Some would suggest the country is already experiencing these effects.

Parliamentarians in countries well known for its rule of law as well as upholding human rights values are more focused on imposing alternative punishments to imprisonment.

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These include the confiscation of wrongfully gained assets, fines and community service. All of these are more effective deterrents, cost-effective and prevent overcrowding in prisons.

A truly Madani society should not resort to wanton, indiscriminate and mandatory imprisonment as its main form of punishment.

In countries which practice constitutional supremacy, it may be wrong for the legislature to oblige the judiciary to impose mandatory prison terms without giving judges the option of deciding on more appropriate sentences according to acceptable jurisprudential norms.

The time has come for Parliament to give preference to alternatives to imprisonment.

Save for violent crimes, security offences, drug trafficking offences and largescale financial fraud, there appears to be no real necessity to have mandatory imprisonment sentences.

That being the case, it was inspiring to read media reports saying that the Malaysian Anti-Corruption Commission (MACC) is proposing the introduction of Deferred Prosecution Agreements (DPAs) in a bid to recover stolen public funds from a wrongdoer more speedily.

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DPAs have some jurisprudential similarities with plea bargaining procedures under the Criminal Procedure Code (CPC) as well as the Discharge Not Amounting to an Acquittal (DNAA) procedure.

The significant impact of DPAs is that investigative agencies are given absolute discretion to deal with crime settlement outside the court system.

However, any step taken to oust the court and public on matters involving the settlement of crime is unconstitutional and may suggest an abuse of power on the part of the authorities. This is especially so in the current Malaysian context which is, unfortunately, littered with unethical practices.

Countries which have implemented the DPA or other similar practices, such as Australia, Canada, France, UK, US, and Singapore, have commendable high ethical standards and sit low on the corruption index.

In Malaysia, we cannot, honestly, pride ourselves as being of the same standard as these countries. Thus, the CPC must provide for DPAs to be subject to judicial and public scrutiny, with the courts having the final say.

Parliament should also consider giving MACC the power to seek leave of court to act as the “receiver and manager” of an accused to facilitate access to, and seize, wrongfully gained assets in the country and overseas.

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Such a concept is a well-established jurisprudence in civil cases and is flexible and commercially friendly. It can thus be modified to accommodate criminal cases, making it an effective tool to recover ill-gotten gains from kleptocrats and other wrongdoers.

Although some financial crimes may arguably warrant imprisonment, it is my view that the more robust approach that I am proposing would better compensate the state financially.

Such compensation need not be limited to recovery on an indemnity basis but can also be in the nature of a penalty through the confiscation of all property belonging to a wrongdoer. It can also provide for the surrender of his right to participate in business and his right to vote.

Parliament must prioritise asset recovery against persons who have caused wrongful loss.

In this respect, I have presented a paper in Vienna at the invitation of the Secretary of United Nations Commission on International Trade Law on civil asset tracing and recovery, providing a jurisprudentially acceptable and efficient methodology to recover assets from kleptocrats as well as all persons who have obtained financial gain by wrongful conduct, be it against private persons or public assets.

It is time our Parliament and related agencies study my proposal and methodology which is related to the objective of DPA.

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My views here must be seen as food for thought for the Malaysian public as well as stakeholders of justice.

Kudos to MACC for proposing the scheme for early recovery as opposed to focusing on imprisonment which has no social justice benefit in cases of financial crimes. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

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