Many times round Gennevarians would have seen these three often quoted words: Sustainability, AMLATFA and BAFIA. We all know them by heart, some even mumble it out during sleep. But to BNM, they treat these three as perhaps the most advanced cutting edge tool to shove off innovative entrepreneurs down the financial cliff.
Usually BNM is quite spot on when it comes to making a quick kill, but in GM’s case shoving is not enough because GM hardly budged. Thanks to all its fans and supporters. It is quite unprecedented really that we see so many supporters, who are supposedly the victims in the first place, rally steadfastly around the alleged perpetrator of the crime.
On the contrary, for once it is BNM’s turn to be left on the lurch (so to speak). They are now beginning to see their three cutting edge tools as no more than three humpty dumpty sitting on a high wall. Gennevians are shoving back hard and the politicians are feeling the heat. Maybe BNM perceived that their wall is on the brink of caving in and there goes their three humpty dumpty.
That is probably why the little napoleons in BNM decided to get tougher and dirtier.
Is that why we saw Datuk Khairun Aseh making a quick about turn, thus rendering his “Janji tidak ditepati” a potential political nightmare? Did we see BNM and UMNO striking a quick impromptu strategy this week? It is the classic strategy of divide and rule but then it can’t happen if they don’t first play out the typical role of bad cop, good cop. They must have laughed gleefully when BNM deliberately dropped the bomb shell by posting that horrifying update that sent every Gennevian shell shocked and squirming in pain. Then just as quickly the following day they cruelly hurled a “helping” hand by offering 8,000 potential victims a poisoned apple each. Eat it and your problem is solved, they said. We have very cunning adversaries indeed.
Let’s move on to more serious topic. Let’s consider what the three words mean, starting with the word “sustainability”. Sustainability in the general sense means the capacity to support, maintain or endure. Hence the word is widely use in fossil and green energy. If you don’t believe me, try bringing the word “sustainable” and the word “business” together and we see the phrase “sustainable business” and it flatly comes within the meaning I was talking about.
A sustainable business means a green business, that is an enterprise to be that has no negative impact on the global or local environment, community, society, or economy – a business that strives to meet the triple bottom line (abbreviated as TBL or 3BL, and also known as people, planet, profit or the three pillars). Tall big words but surely this is not what BNM expects out of GM.
So would I be wrong to say that “sustainable or sustainability” are words coined by over-zealous people or aka “little napoleons” in BNM, people who has the propensity to write or re-write their rules, regulations or even law as and when they so please and on any occasion they deem fit. Are they really thinking that they are game-changers? Is anyone in BNM or any minister care to explain “sustainability”? What is the benchmark? Need the business be sustainable for a day, a month, a year, a decade, a century or for all eternity?
Wouldn’t it be ridiculous for any authority to require a company to pass the “sustainability” test because to do so will mean some form of a statement from the company and if so, won’t such a statement be turned into some sort of guarantee to its customer? It is like saying “hey my business is sustainable – come buy from me”.
If my business turned unsustainable, am I to be caught by BNM? Will they just barge in and seize all I have and close my shop? Is that the intention of Parliament? Personally I don’t think so because this scenario leads to absurdity. Maybe that’s why Dr Mahathir called upon BNM to investigate first and not raid first. I fully agree because this kind of attitude is going to be bad for business, domestically and internationally.
Going on to the topic of AMLATFA, which is the acronym for the Anti-Money Laundering and Anti-Terrorism Act 2001. Section 4(1) is the catch all provision. It governs the law on offences relating to money laundering. Hence money laundering is not a stand-alone offence. Various offences derived from laws all over will be caught under this heading of “money laundering”. Offences within the meaning of money laundering is defined in the Second Schedule of AMLATFA.
Hence proceeds from corruption/bribery under the Anti-Corruption Act 1997; drugs from the Dangerous Drugs Act 1952; kidnapping; child trafficking; copyright infringement; smuggling and an entire host of statutes will all come under the dragnet of money laundering pursuant to section 4(1) of AMLATFA.
We see the inter-changeable references of AMLATFA and BAFIA when the media talks about possible charges which BNM can take against GM. That’s because offences under BAFIA is also caught within the meaning of money laundering under section 4(1) of AMLATFA. Reference to BAFIA will be made later on in this article. Let’s look at some of the more pertinent provisions affecting us (and of course GM) under AMLATFA.
MONEY LAUNDERING OFFENCES
Offence of money laundering.
Section 4 AMLATFA
(1) Any person who—
(a) engages in, or attempts to engage in; or
(b) abets the commission of, money laundering, commits an offence and shall on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both.
(2) A person may be convicted of an offence under subsection (1) irrespective of whether there is a conviction in respect of a serious offence or foreign serious offence or that a prosecution has been initiated for the commission of a serious offence or foreign serious offence.
Comment: Money laundering includes illegal deposit taking under section 25 BAFIA.
Section 44 AMLATFA:
(1) Subject to section 50, where an enforcement agency, having the power to enforce the law under which a serious offence is committed, has reasonable grounds to suspect that an offence under subsection 4(1) or a terrorism financing offence has been, is being or is about to be committed by any person, it may issue an order freezing any property of that person or any terrorist property, as the case may be, wherever the property may be, or in his possession, under his control or due from any source to him.
Comment: the enforcement agency in this case is BNM and they issued an order freezing the property of GM.
(2) An order under subsection (1) may include -(a) an order to direct that the property, or such part of the property as is specified in the order, is not to be disposed of, or otherwise dealt with, by any person, except in such manner and in such circumstances, if any, as are specified in the order; and(b) an order to authorise any of its officers to take custody and control of the property, or such part of the property as is specified in the order if the enforcement agency is satisfied that the circumstances so require.
Comment: this sub-section gives BNM the power to authorize its officers to seize GM’s gold and cash (in the office as well as bank accounts).
(3) The enforcement agency in making the order under subsection (1) may give directions to the person named or described in the order as to –
(a) the duration of the order;
(b) the disposal of that property, for the purpose of –
(i) determining any dispute as to the ownership of or other interest in the property or any part of it;
(ii) its proper administration during the period of the order;
(iii) the payment of debts incurred in good faith due to creditors prior to the order;
(iv) the payment of money to that person for the reasonable subsistence of that person and his family;
(v) the payment of the costs of that person to defend criminal proceedings against him; or
(c) the manner in which the property should be administered or dealt with.
(4) An order made under subsection (1) may direct that the person named or described in the order shall:
(a) be restrained, whether by himself or by his nominees, relatives, employees or agents, from selling, disposing of, charging, pledging, transferring or otherwise dealing with or dissipating his property;
(b) not remove from or send out of Malaysia any of his money or property; and
(c) not leave or be permitted to leave Malaysia and shall surrender any travel documents to the Director–General of Immigration within one week of the publication of the order.
(5) An order made under subsection (1) shall cease to have effect after ninety days from the date of the order, if the person against whom the order was made has not been charged with an offence under this Act or a terrorism financing offence, as the case may be.
Comment: It is important to note here that BNM’s order shall cease (meaning the expiry is mandatory) to have effect after 90 days of the order. The implication here is that if the order was dated 1st October 2012, then the order shall expire on 29th December 2012.
(6) An enforcement agency shall not be liable for any damages or cost arising directly or indirectly from the making of an order under this section unless it can be proved that the order under subsection (1) was not made in good faith.
Comment: this means BNM is not responsible for any damages or cost whether or not directly or indirectly as a consequence of the order UNLESS GM can prove that the order was not made in good faith.
Section 45 AMLATFA:
(1) In the course of an investigation into an offence under subsection 4(1) or a terrorism financing offence, an investigating officer may, upon obtaining approval from an investigating officer senior in rank to him, seize any movable property which he has reasonable grounds to suspect to be the subject–matter of such offence or evidence relating to such offence or to be terrorist property.
Comment: the IO (if he already obtained approval from a more senior officer than himself) may seize GM’s movable property (meaning gold and cash) which the IO suspects to be that coming from the offence (i.e. illegal deposit taking) or as evidence itself to the offence.
(2) A list of all movable property seized pursuant to subsection (1) and of the places in which they are respectively found shall be prepared by the investigating officer effecting the seizure and signed by him.
Comment: All things seized under this section must be itemized in a list an where the things is found must be stated down also and the IO who conducted the seizure will have to sign the list. (Note: I have some time ago mentioned this requirement to maintain a signed list. Therefore items seized cannot be simply disputed by either party, whether from BNM or GM).
(3) A copy of the list referred to in subsection (2) shall be served as soon as possible on the owner of such property or on the person from whom the property was seized.
Comment: A copy of the list must be served on GM asap.
(4) This section shall not apply to any movable property liable to seizure under subsection (2) which is in the possession, custody or control of a financial institution.
Section 46 AMLATFA:
(1) Where any movable property is seized under this Act, the seizure shall be effected by removing the movable property from the possession, custody or control of the person from whom it is seized and placing it under the custody of such person, and at such place, as the investigating officer may determine.
Comment: Here is the reason why we saw BNM officers carting away documents, computers, gold, cash, etc from GM’s office.
Section 54 AMLATFA:
(1) Where any property has been seized under this Act, and so long as such seizure remains in force, any dealing effected by any person or between any persons in respect of such property, except any dealing effected under this Act by an officer of a public body in his capacity as such officer, or otherwise by or on behalf of the Federal Government, or the Government of a State, or a local authority or other statutory authority, shall be null and void, and shall not be registered or otherwise be given effect to by any person or authority.
Comment: once the gold and cash are seized, there cannot be any more dealing of such property with any persons including GM’s customers. This status quo will remain so long as the seizure remains valid and in force.
(3) For so long as a seizure of any property under this Act remains in force, no action, suit or other proceedings of a civil nature shall be instituted, or if it is pending immediately before such seizure, be maintained or continued in any court or before any other authority in respect of the property which has been so seized, and no attachment, execution or other similar process shall be commenced, or if any such process is pending immediately before such seizure, be maintained or continued, in respect of such property on account of any claim, judgement or decree, regardless whether such claim was made, or such judgement or decree was given, before or after such seizure was effected, except at the instance of the Federal Government or the Government of a State, or at the instance of a local authority or other statutory authority, or except with the prior consent in writing of the Public Prosecutor.
Comment: as long as the seizure is still enforced, nobody can sue or take action under the civil court pertaining to such property and if any action has started before the seizure, the action will be maintained or continued (until judgment) but no execution or attachment (meaning “lelong” process) can take place, with the exception as stated.
Section 55 AMLATFA:
(1) Subject to section 61, in any prosecution for an offence under subsection 4(1) or a terrorism financing offence, the court shall make an order for the forfeiture of any property which is proved to be the subject–matter of the offence or to have been used in the commission of the offence or which is proved to be terrorist property where-
(a) the offence is proved against the accused; or
(b) the offence is not proved against the accused but the court is satisfied-
(i) that the accused is not the true and lawful owner of such property; and
(ii) that no other person is entitled to the property as a purchaser in good faith for valuable consideration.
Comment: For GM (and us) this is the worst case scenario. The court shall make an order to forfeit the gold and cash if (1) the gold and cash are proven to be the subject matter of “illegal deposit taking” or other illegal transaction; (2) the offence is proven against GM; or (3) if offence not proven against GM, it is found that GM is not the true and lawful owner of such property; and (4) no other person can prove that he is entitled to that property as a purchaser in good faith and having paid money for it.
Now this section is very dodgy because gold and money is kept by BNM. If BNM has proven its case in court and the judge has found GM guilty, the court can order all the gold and cash to be forfeited. The only exception against forfeiture is in the scenario whereby it is proven that the gold and cash does not belong to GM as the owner but it belongs to somebody else. The problem is the onus lies on GM’s buyers to prove that they are entitled to the gold and cash (as purchaser in good faith). Therefore the myth sounded out by the authorities as well as politicians that customers can do a third party claim based on reports on a first come first served may be baseless, confusing and not true.
Section 56 AMLATFA:
(1) Subject to section 61, where in respect of any property frozen or seized under this Act there is no prosecution or conviction for an offence under subsection 4(1) or a terrorism financing offence, the Public Prosecutor may, before the expiration of twelve months from the date of the freeze or seizure, apply to a judge of the High Court for an order of forfeiture of that property if he is satisfied that such property had been obtained as a result of or in connection with an offence under subsection 4(1) or a terrorism financing offence, as the case may be, or is terrorist property.
(2) The judge to whom an application is made under subsection (1) shall make an order for the forfeiture of the property if he is satisfied-
(a) that the property is the subject–matter of or was used in the commission of an offence under subsection 4(1) or a terrorism financing offence or is terrorist property; and
(b) that there is no purchaser in good faith for valuable consideration in respect of the property.
(3) Any property that has been seized and in respect of which no application is made under subsection (1) shall, at the expiration of twelve months from the date of its seizure, be released to the person from whom it was seized.
Comment: This section relates to the instance where the properties are frozen or seized but there is no prosecution or conviction of anybody. The Public Prosecutor (PP) may, before the expiry of 12 months from the date of the freeze or seizure, apply to the court to forfeit the properties if he is satisfied that the properties have been illegally obtained as a result of an offence under section 4(1). Note that the judge may go ahead and grant the order of forfeiture under the circumstances stated in (2) (a) and (b). However if at the expiration of the 12 months period, no application is made by the PP, the seized property will be released back to the accused (i.e. GM).
Section 57 AMLATFA:
Where the freeze, seizure or sale of any property has been effected under this Act, the validity of such freeze, seizure or sale, or other form of disposal of such property, or of any destruction of the property in accordance with the provisions of this Act, in consequence of such freeze, seizure or sale, shall not be affected by any objection to it relating to the manner in which the freeze, seizure or sale was effected, or the place at which it was effected, or the person from whom it was effected, or the person to whom any notice of the freeze, seizure or sale was given, or omitted to be given, or any failure to conform to any procedural provision of this Act or of any other written law in effecting the freeze, seizure or sale.
Comment: What it means here is that if the freeze, seizure or sale of any property is already done and carried out, the issue of validity of such action performed in accordance to this Act does not arise in almost all circumstances as stated.
Section 60 AMLATFA:
(1) Where property has been seized under this Act, an investigating officer other than the investigating officer who effected the seizure, may at any time before it is forfeited under this Act, release such property to such person as he determines to be lawfully entitled to the property if he is satisfied that such property is not liable to forfeiture under this Act or otherwise required for the purpose of any proceedings under the Act, or for the purpose of any prosecution under any other law, and in such event neither the officer effecting the seizure, nor the Federal Government, or any person acting on behalf of the Federal Government, shall be liable to any proceedings by any person if the seizure and release had been effected in good faith.
(2) The officer effecting any release of any property under subsection (1) shall make a record in writing in respect of such release, specifying in the record in detail the circumstances of, and the reason for, such release, and he shall send a copy of such record to the Public Prosecutor.
Comment: It is worthwhile to note this section which covers the situation where the IO (other than the person who effected the seizure) may anytime before the forfeiture of the property, release such property under the circumstances stated.
Section 61 AMLATFA:
(1) The provisions in this Part shall apply without prejudice to the rights of bona fide third parties.
(2) The court making the order of forfeiture under section 55 or the judge to whom an application is made under subsection 56(1) shall cause to be published a notice in the Gazette calling upon any third party who claims to have any interest in the property to attend before the court on the date specified in the notice to show cause as to why the property shall not be forfeited.
(3) A third party’s lack of good faith may be inferred, by the court or an enforcement agency, from the objective circumstances of the case.
(4) The court or enforcement agency shall return the property to the claimant when it is satisfied that—
(a) the claimant has a legitimate legal interest in the property;
(b) no participation, collusion or involvement with respect to the offence under subsection 4(1) or a terrorism financing offence which is the object of the proceedings can be imputed to the claimant;
(c) the claimant lacked knowledge and was not intentionally ignorant of the illegal use of the property, or if he had knowledge, did not freely consent to its illegal use;
(d) the claimant did not acquire any right in the property from a person proceeded against under circumstances that give rise to a reasonable inference that any right was transferred for the purpose of avoiding the eventual subsequent forfeiture of the property; and
(e) the claimant did all that could reasonably be expected to prevent the illegal use of the property.
Comment: this section relates to bona fide third party claims to the seized property. Note the difficulty in establishing a claim under this section. If I may point out here that contrary to what some officials and politicians said, claims under this section is not automatic and certainly is not based on first come first serve. A notice need to be published in a Gazette first whereupon it will call upon a third party to show cause as to why the property shall not be forfeited.
Section 62 AMLATFA:
Whenever property that is not required to be destroyed and that is not harmful to the public is forfeited under section 55 or 56, the court or an enforcement agency may, in accordance with the law—
(a) retain it for official use, or transfer it to the Federal Government; or
(b) sell it and transfer the proceeds from such sale to the Federal Government.
Comment: this provision relates to the circumstance where the seized property is forfeited and becomes literally government property.
Moving on now to BAFIA which stands for Banking and Financial Institutions Act 1989, some of the relevant provisions that may give more bite BNM if it decides to charge GM are:-
Section 2 BAFIA:
“Deposit” means a sum of money or any precious metal, or any precious stone, or any article which is comprised, in part or in whole, of any precious metal or precious stone, and any other article or thing as may be prescribed by the Minister, on the recommendation of the Bank, received, paid or delivered on terms-
(a) under which it will be repaid, with or without interest or at a premium or discount; or
(b) under which it is repayable, either wholly or in part, with any consideration in money or money’s worth, and such repayment being either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it, regardless whether the transaction is described as a loan, an advance, an investment, a saving, a sale or a sale and repurchase, but does not include money paid bona fide-
(A) by way of an advance or a part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services is not or are not in fact sold, hired or otherwise provided;
(B) by way of security for the performance of a contract or by way of security in respect of any loss which may result from the non-performance of a contract;
(C) without prejudice to paragraph (B), by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise; and
(D) in such other circumstances, or to or by such other person, as specified in the First Schedule.
Comment: any sum of money or precious metal, or precious stone, or any article prescribed by the Minister which are being dealt with upon the terms as stated in (a) and (b) will fall within the meaning of deposit taking and hence an offence under section 25.
Section 25 BAFIA
(1) No person shall receive, take, or accept deposits except under and in accordance with a valid licence granted under section 6 (4) to carry on banking, finance company, merchant banking or discount house business.
Section 26 BAFIA
Provides that no ‘unsolicited calls’ (i.e. a personal visit or oral communication made without express invitation) may be made, without the written consent of the Central bank to:
(a) solicit or procure the making of a deposit ; or
(b) enter into or offer to enter into any agreement with a view to the acceptance of a deposit, from any person in Malaysia or outside Malaysia
Section 83 BAFIA
(1) Where an investigating officer is satisfied, or has any reason to believe, that any person has committed an offence under this Act, he may, if in his opinion it is reasonably necessary to do so for the purpose of investigating into such offence—
(a) enter any premises and there search for, seize and detain any property, book or other document;
(b) inspect, make copies of, or take extracts from, any book or other document so seized and detained;
(c) take possession of, and remove from the premises, any property, book or other document so seized and detained;
(d) search any person who is in, or on, such premises, and for the purpose of such search detain such person and remove him to such place as may be necessary to facilitate such search, and seize and detain any property, book or other document found on such person;
(e) break open, examine, and search, any article, container or receptacle; or
(f) stop, detain or search any conveyance.
(2) An investigating officer may if it is necessary so to do-
(a) break open any outer or inner door of such premises and enter thereinto;
(b) forcibly enter such premises and every part thereof;
(c) remove by force any obstruction to such entry, search, seizure, detention or removal as he is empowered to effect; or
(d) detain all or any persons found on any premises, or in any conveyance, searched under subsection (1) until such premises or conveyance have been searched.
(3) A list of all things seized in the course of a search made under this section and of the premises in which they are respectively found shall be prepared by the investigating officer conducting the search and signed by him.
(4) The occupant of the premises entered under subsection (1), or some person on his behalf, shall in every instance be permitted to attend during the search, and a copy of the list prepared and signed under this section shall be delivered to such occupant or person at his request.
(5) An investigating officer shall, unless otherwise ordered by any court-
(a) on the close of investigations or any proceedings arising therefrom; or
(b) with the prior written consent of any officer of the Bank authorised by the Governor to act on his behalf for this purpose, or of any investigating officer superior to him in rank, at any time before the close of investigations, release any property, book or other document seized, detained or removed by him or any other investigating officer, to such person as he determines to be lawfully entitled to the property, book or other document if he is satisfied that it is not required for the purpose of any prosecution or proceedings under this Act, or for the purpose of any prosecution under any other written law.
(6) A record in writing shall be made by the officer effecting any release of any property, book or other document under subsection
(5) in respect of such release specifying therein in detail the circumstances of, and the reason for, such release.
(7) Where the investigating officer is unable to determine the person who is lawfully entitled to the property, book or other document or where there is more than one claimant to such property, book or other document, the investigating officer shall report the matter to a Magistrate who shall then deal with the property, book or other document as provided for in sections 413(2), (3) and (4), 414, 415 and 416 of the Criminal Procedure Code.
Comment: Section 83 empowers the BNM officers conducting a raid to forced entry (if necessary) as well as powers of search and seizure of items (documents, records, property such as gold and cash) to facilitate in the IO’s investigation of an offence or suspected offence. The IO only needs a reason to believe that a person has committed an offence under this Act to start a raid under Section 83. It is worthy to note subsection (5) as to when the IO may release items seized and subsection (7) as to what circumstances will kick in the process of the court dealing with the seized property.
Gennevarians, the law relating to AMLATFA and BAFIA is now stripped bare for all to see. It is by no means conclusive because the little napoleons behind this fiasco will always try to improvise and throw everything they got in the book to nail GM. They will try to twist and turn in the hope that we make mistakes and end up slipping into their insidious traps.
One such trap is fear-mongering – the deployment of careful use of words to work psychologically on each and every one of us. It is to create panic so that it produces the desired result they wanted. I am hence not surprised when they plucked a figure of 8,000 people because they expected to see a stampede unfolding and people will start running blindly in their direction for help. (View http://on.fb.me/TFFe6R) I hope no one fell into their wicked trap and if there are some, I hope not many.
As we have seen in the statutory provisions, the law made it more difficult for us to claim back what’s ours if we have gone ahead to do a “third party claim”. That’s because a third party claim will kick-in a dispute as to GM’s right of ownership and entitlement to the properties BNM seized from its office. This will squarely put all properties into the hands of the judge who will hear out and decide who has a better right to the properties.
If you fail to prove your right of ownership to any part of the gold or money seized and GM failed to prove they have the entire right to those property simply because of your dispute as a third party claimant, then the best case for the government to hope for is to get all those gold and monies forfeited so that they end up being government property pursuant to Section 62 of AMLATFA.
If it ends up that way, whose ass do you think you will be kicking? For the sake of you, I and everybody else caught in this unfortunate dilemma, please do not do anything foolish. We stand a better chance of survival in the hands of GM than in the hands of the government, for Section 62 clearly puts the government in a position of conflict of interest.
Moreover GM is proven because it has honoured its obligations for the past three years and more. There is no reason to doubt them now. I’d like to conclude by making this rallying cry – “Demand BNM to restore GM to its original trading position for we want GM to fix our problem and not the government and certainly not BNM”.
The era of government knows best is definitely over and long gone.
– Dee Casey, Genneva Malaysia Supporters
**Note from Admin: No permission required to publish this in any media.
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