KUALA LUMPUR — July 3, 2019: Imagine this, the government has informed you that it intends to confiscate a certain sum of your company’s monies even though it has yet to find your company guilty of any crime.
What made things even more odd was that you were the one who needed to prove that the said money was obtained in good faith. Essentially, the burden of proof falls on the accused, not the accuser.
This is exactly what happened to popular fabric retailer Jakel Trading, which became one of 41 respondents of the Malaysian Anti-Corruption Commission’s (MACC) civil forfeiture suits in relation to the 1Malaysia Development Berhad controversy.
The suit, done in accordance with the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities (Amla) 2001, aimed to recover RM270 million suspected of being laundered by former prime minister Datuk Seri Najib Razak.
A day after the MACC announced the suits, Jakel denied of having any connection with the 1MDB controversy, explaining that the proceeds it gained from doing business with Najib’s office was professionally obtained.
“All our sales are properly invoiced and payments are accepted likewise. We are not in a position to question the source of the said funds. Any issue of money laundering is totally beyond our knowledge,” read Jakel statement on June 22.
While MACC chief commissioner Latheefa Koya replied that Jakel can file an affidavit to essentially counter the suit, the tangle does beg the question as on what should business entities do to avoid a civil forfeiture suit.
Such a poser was forwarded legal expert Professor Datuk Salleh Buang, who in his column in a local daily last year remarked that Amla is an extremely powerful legislation due to its guilty-until-proven nature which contradicted the cardinal doctrine of innocent until proven guilty.
“If it is possible, at the time when the funds are about to be given to you, ask for an undertaking or a declaration by the donor that the funds are in no way illegally obtained from any activity covered by Amla.
“Having said that, I doubt the donor will entertain your request, but still it’s not harm in trying. If they are genuine bona fide donations, they should have no difficulty in making such declarations,” said Salleh.
A criminal defense lawyer who spoke to The Mole on condition of anonymity also echoed Salleh’s view, adding that being subjected to such a suit is not a conviction and that one will not be convicted and have their assets confiscated if one can justify the legitimacy of the transaction.
“Ensure that you have enough documentation to show that the businesses you have dealt with are legitimate. Movement of money derived from a legitimate source, and untainted by any criminal elements, is not money-laundering,” said the lawyer.
That being said, a research article published in the Procedia Economics and Finance journal in 2015 -which was 14 years after Amla was passed by the government- states that the law has made it difficult for property owners to prove the legality of their assets.
Led by Universiti Teknologi Mara’s Dr Normah Omar, who was recently recognised as one of the most influential women in Islamic finance, the team of academics who did the study wrote that Amla’s non-conviction based confiscation was the most serious encroachment of private property rights.
“The standard of proof in civil confiscation does not seem to be in favour of the property owners. The standard of proof in a criminal proceeding is guilty beyond reasonable doubt. This high standard exists to protect the rights of innocent individuals.
“However, innocent property owners enjoy no such protection, which mean that criminals seem to have more rights than innocent property owners when it comes to this type of confiscation.
“It is also unfortunate for property owners that under civil confiscation, law enforcement agencies could benefit directly from the confiscation actions of the property. If owners do not fight and the government wins by default, law enforcement agencies are more likely to engage in it,” read the article.