KUALA LUMPUR, Feb 18 — Malaysia needs to carry out stricter banking checks for politically exposed persons while they are still in office if it is serious about curbing money laundering, former top graftbuster Tan Sri Dzulkifli Ahmad told Mingguan Malaysia in an interview published today.
The former Malaysian Anti-Corruption Commission (MACC) chief said the current system appears to have the order topsy-turvy, with checks on those still in office seemingly lax compared to those who have retired, as he had experienced.
“Before, I was the former director-general of MACC and I was categorised as a politically exposed person or PEP. It should be that when we are categorised as PEP, the checks made by banks or institutions need to be stricter because we are exposed to illegal elements,” Dzulkifli told the Sunday edition of Utusan Malaysia.
Relating his personal experience when he was the MACC chief, he said “there were even banks that came ‘running’ when department heads wanted to open an account”.
He said that the rules were clear that those who are categorised as PEP and in higher positions should be scrutinised as they were at greater risk of potentially committing financial crimes due to exposure, but the reality was different.
“Therefore, the conditions must be strict,” he was quoted as saying.
He added that the problem starts when an officer retires, but banking institutions still classify them as “PEPs” even though they no longer hold positions and they are subject to long financial background checks.
Dzulkifli said that while he has no problem with this, there should be a time frame in carrying out financial checks for those who have retired from office and want to open a new bank account.
“Two or three years, it’s okay. What if it’s for four or five years? It’s like we did something wrong. Our system is actually topsy-turvy,” he was quoted as saying.
He believes that currently each bank has the discretion on how long financial checks should take for those who want to open new accounts and suggested that Bank Negara Malaysia intervene and impose a time limit.
“The time has come, there is a need for BNM to give instructions to banks so that this PEP has a time limit. It’s different when I held another position after the end of my term as chief commissioner of an agency, in a government-related company.
“That’s different and it’s reasonable that the process be strict for PEPs,” he was quoted as saying.
At the same time, Dzulkifli said the MACC too needed to streamline its appointments processes to improve the quality of its enforcement and investigating officers.
“For example, how to understand accounts from an auditing point of view and at the same time they need to understand technology in order to facilitate investigations especially when it is necessary to investigate hundreds of accounts. This is what enforcement needs to improve,” he was quoted as saying.
He said anti-graft officers specialising in Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (AMLA) 2001 should have a financial background, but the current appointment process is based on promotion.
As an example, he said an officer from a different investigation field like narcotics or homicide might be transferred to the AMLA section to fill a vacancy despite having no prior knowledge of it.
“Not only that, AMLA has a seizure period of 12 months and the investigation must be within that period. So with the officer being new, and no background in the financial field, what about the results of the investigation?
“Not to mention offers from banking companies with lucrative salary offers and the demand for experienced government officials to fill vacancies in the private sector is high. So, this matter needs to be seen as a whole,” he was quoted as saying.
