Definitions of Corruption

Corruption

Something that is powerful, insidious, and destructive of human lives and institutions. It transcends those illegal, immoral and ignoble practices that we, people of the world, daily experience. - Underkuffler (2005: 13)

UNDP Definition of Corruption

Misuse of public power, office, or authority for private benefit— though bribery, extortion, influence peddling, nepotism, fraud, speed money, or embezzlement.

Transparency International UK - Bribery

Offering, promising, giving, accepting, or soliciting of an advantage as an inducement for an action that is illegal, unethical, or a breach of trust.

Transparency International UK - Active Bribery

Offering or giving bribes.

Transparency International UK - Passive Bribery

Soliciting or receiving bribes.

World Bank Definition of Corruption

The abuse of public office for private gain.

Malaysia Slang for Bribery - Duit Kopi

Another slang term used in Malaysia for bribery.

Indonesia Slang for Bribery - Pungli

A slang term in Indonesia, short for 'pungutan liar'.

United Kingdom Slang for Corruption - Sleaze

Dishonest and immoral acts by a public official.

Italy Slang for Corruption - Tangentopoli

Portrays corruption in the Italian political system exposed in the 90s.

France Slang for Corruption - Les Affaires

Means legal transactions in business.

Japan Slang for Corruption - Black Mist

Refers to a match-fixing scandal in Japan's professional baseball league between 1969 and 1971.

Uganda Slang for Corruption - Air Supply

Means payment is made even though goods are not supplied or services are not rendered.

Nigeria Slang for Corruption - 419

Refers to a legal provision for fraud in the Nigerian Criminal Code.

Forms of Corruption

Gifts, Bonuses, Services, Loan, Discount, Positions.

MACC Act of 2009 - Soliciting/Accepting Bribes

S16a & 17a.

MACC Act of 2009 - Offering/Giving Bribes

S16b & S17b.

MACC Act of 2009 - False Claims

S18.

MACC Act of 2009 - Abuse of Public Position

For gratification (S23).

MACC Prosecution Policy

MACC will protect those who lodge a report.

Penalties for Corruption Offenses

It is compulsory for the court to give imprisonment and fine sentence.

Maximum Imprisonment Sentence

20 years.

Fines for Corruption Offenses

5 times the value of bribe or the value of offence.

Minimum Fine for Non-Valued Gratification

No less than RM10,000.

Fine for Making False Claim

5 times the amount of false claim made.

Bribe

If the bribe is in the form of sexual service, the minimum amount of fine is RM10,000.

Seized

Asset is detained/seized for MACC's investigation process.

Forfeited

Ownership of the asset transferred from the original owner to another party.

Forfeiture Process

Forfeiture of properties is a complex and time-consuming process.

Gift

Based on the meaning under the Service Circular No. 3 of 1998, gifts include money, free fares, stocks, lottery tickets, travel conveniences, entertainment, club membership, any form of commission, hampers, jewelry, any item of value given or received by a public officer.

Bribe Criteria

Even though the gift value is RM10, if it is given by someone with whom the recipient has an official relationship and can influence the recipient's decision, it can be considered as a bribe.

Gift Acceptance

Gifts cannot be accepted from those with whom you have an official relationship.

Reasonable Gift Value

The form, rate and value of gifts must be commensurate to the purpose of the gift.

Imprisonment for Bribery

Sentence: 2 years of imprisonment or fine or both.

Money Laundering

The criminal gains proceeds from unlawful activities.

Unlawful Activities

Examples of unlawful activities include corruption, stealing, robbery, fraud, breach of trust, receipt of illegal deposit and such.

Money Laundering Transactions

Each transaction is a money laundering crime.

Integration

Illegal money and legal money are combined. Example: Illegal money that has been invested in a business yield profits.

Layering

Transfer or hide illegal money through legal transactions. Example: Illegal money is transferred from bank account to a legal business.

Placement

Placing illegal funds in several places. Example: depositing illegal money in several bank accounts.

Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (AMLATFAPUAA) 2001

A law in Malaysia aimed at detecting and preventing money laundering and the proceeds from unlawful activities.

Detect

To identify proceeds gained from unlawful activities.

Avoid

To prevent proceeds of unlawful activities from being hidden and stolen by criminals.

Retrieve

To seize proceeds of unlawful activities for the government.

Imprisonment for money laundering

Not exceeding 15 years plus a fine of 5 times the amount of money laundered or 5 million, whichever is higher.

White-Collar Crime

A crime committed by a person of respectability and high social status in the course of his occupation, which is financially motivated and does not involve violence.

Blue-Collar Crime

Crimes committed by the lower classes, causing injury and property damage, often violent in nature.

Impact of White-Collar Crimes

Causes losses to organizations and affects individuals, national security, the economy, and the environment.

Fraud Losses

Each year, businesses lose 5% due to fraud activities, with a total worldwide loss of $3.7 trillion.

Macau scams

A type of fraudulent phone scam where criminals impersonate officials or banks to trick victims into giving up personal banking information or transferring money.

Profile of a Fraudster

A majority of fraudsters are male (79%), aged 36-55 years old, with 65% being company employees.

Weakness in Internal Control

Identified as the main cause of fraud.

Precurment Fraud

47% of fraud cases are related to procurement fraud.

Fraud in Financial Reporting

22% of fraud cases are related to fraud in financial reporting.

Detection of Fraud

Mostly through reports, inspections like audits, and whistleblowers (43%).

Reasons for Committing Fraud

66% for personal gain, 27% due to capability, 13% due to organizational culture.

Organizational Culture

12% of fraud is committed to reach targets/get bonuses and hide losses.

Other Motives for Fraud

10% of fraud is committed for other motives, including loss of stakeholders' trust, publicity, and ratings.

Coincidence in Fraud Detection

14% of fraud is detected by coincidence.