Move to plug loopholes on ‘illicit fund outflow’

By Tanu Pandey

PETALING JAYA: The special government task force to check illicit outflow of funds from the country is planning to become a formal body with central management of material seized during raids, according to Attorney-General Abdul Gani Patail.

The task force is also likely to commission a study on the veracity of a report issued by Global Financial Integrity (GFI) which said about RM880 billion was taken out of the country illegally between 2001 and 2010.

Gani said the government and Bank Negara Malaysia (BNM) disagree with the number stated by GFI, saying that 80% of funds listed as illegal outflow is a result of trade mispricing.

BNM has said that the report did not consider various discrepancies in trade statistics and that the outflow estimates are overstated.

“It is important to note that estimates highlighted in its reports are essentially ‘unrecorded financial flows’, which are not necessarily synonymous with ‘illicit financial flows’,” BNM had said in a March 1 statement.

Gani said the GFI has offered to do a study for Malaysia on illicit fund flow to help plug the loopholes to tackle it.

“I told them [GFI], I will consider it carefully to engage them to make a study. For the next six months we will see how we can deal with this issue. If we cannot, we can engage them.”

He said as it is, Malaysia has the suspicious transaction reporting and currency transaction report in place which makes it difficult to take illicit funds out of the country.

He said the task force on illicit outflows that was set up last year is drafting laws and regulations to become institutionalised.

The task force, Gani said, takes a percentage of the revenue derived from seizures and uses it to fund the organisation.

If all goes well for the task force, it could be an institution soon after the general election, he said.

The body comprises the AG’s Chambers, Royal Customs, police, Malaysian Anti-Corruption Commission (MACC), Inland Revenue Board, Immigration Department and BNM.

The special task force also plans to develop a national intelligence database to share information and provide the necessary advice to the public.

This content is provided by FMT content partner The Malaysian Reserve.