How to demonstrate “Adequate Procedures” in Malaysia?
Adequate Procedures in Malaysia, how to demonstrate it?
State of Corruption in Malaysia
While a large part of the political and economic universe still believes that engaging in some form of corruption is the only way to survive and advance, many countries now are taking drastic measures to root out corruption, and Malaysia is rushing to the forefront of that trend. Currently ranked at 51 out of 180 countries on Transparency International’s “Corruption Perception Index” (2019), with a score of 53 (where 0 is perceived to be highly corrupt and 100 is perceived to be very clean), the Malaysian government emerged from the highly publicized 1MDB financial scandal on high alert and with a firm resolve to adopt tough anti-corruption legislation as one of its main priorities.
The result was the empowerment of the Malaysian Anti-Corruption Commission (MACC) and its 2009 Act which addressed corruption on both the political and private sector levels. The Parliament’s subsequent amendment – Section 17A – was added in 2018, which likened the legislation to the UK Bribery Act but added a “parallel” element of personal criminal liability in corporate bribery cases. And that’s where business organisations need to take notice and take immediate action.
Demonstrating “Adequate Procedures” through ISO 37001 Certification
ISO 37001 Anti-Bribery Management System is an internationally accepted standard that specifies the procedures by which an organisation should implement in preventing bribery while detecting and reporting any bribery incident that occurs. The standard requires organisations to implement these procedures on a reasonable and proportionate basis according to the type and size of the organisation, and the nature and extent of bribery risks faced. It applies to small, medium and large organisations in the public and private sector and can be implemented in any country. Though it will not provide absolute assurance that bribery will completely cease, the standard can help establish that the organisation has in place reasonable, proportionate and adequate anti-bribery procedures.
ABAC® Center of Excellence Limited is fully accredited as a Conformity Assessment Body (Certification Body) to assist your organisation in attaining ISO 37001 certification through a thorough bribery risk assessment and audit covering the entire scope of the standard The audit methodology is evidence-based, meaning any issues raised will be confirmed through adequate evidence that the ABAC® Certification team has discovered during the audit. Auditing techniques take a risk-based approach to examining your organisation’s Anti-Bribery Management System (ABMS), and the ABAC® Certification team will increase the scale of the investigation if they determine that a specific process presents a higher risk side. Factors such as Impact, Negligence, Minor, Major, and Critical are taken into consideration during the audit.
A separate audit method is a process-based approach where the ABAC® Certification examines the organisation’s processes while considering the interaction between those processes. Finally, there is a sampling-based audit approach where ABAC® Certification incorporates an appropriate sampling plan utilising samples from different ABMS processes to conclude and support the audit findings and results.
The audit is extremely thorough in its approach, which results in accredited certification for the scope of the ISO 37001 Anti-Bribery Management System. Because of the standard’s international acceptance and the thoroughness of the audit process, such certification can provide a valuable safeguard in demonstrating an “adequate procedures” compliance defence in cases posing a liability for a company’s failure to prevent bribery. Indeed, from an FCPA perspective, certification may provide tangible evidence that a compliance program was in place at the time of the alleged bribery actions. And from a UK Bribery Act perspective, the certification could provide the company with tangible prima facie evidence presented by an accredited certification body attesting to the establishment and effectiveness of the organisation’s compliance program. Notably, per Section 17A of the Malaysian Anti-Corruption Commission, the Prime Minister’s National Anti-Corruption Plan 2019-2023 has declared ISO 37001 certification a requirement for companies operating in Malaysia.
There is a strong likelihood that ISO 37001 Anti-Bribery Management System will continue to set the pace for a globally recognised “adequate procedures” standard for corporations embroiled in corruption litigation proceedings. But for now, the most powerful “insurance” tool that public and private sector organisations can use in their defence strategy is ISO 37001 ABMS certification.
About CRI Group
Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.
In 2016, CRI Group launched the Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.
Senior Management need to take responsibility for managing financial crime risk now!
Corporate fraud is only one form of transnational financial crimes and money laundering is a prominent form which involves the false legitimisation of illegal funds (Unger & Van Der Linde, 2013, p. 22). Increasing attention has been given to this form of financial crime, particularly on an international level, which has provoked the creation of laws across the globe designed to detect, punish and prevent it (Otusanya, 2009). Globalisation has rendered it all the more easy for finances to be transferred between countries, hence the international status of money laundering (Beekarry, 2013). This type of transnational financial crime poses a particular threat to the economic and political wellbeing of states and national governments (Rusmin & Alistair, 2007). This has led to reforms in anti-money laundering regulations across the globe, as it has been recognised that such activity must be more aggressively monitored, prevented and punished (Ridley & Dean, 2012). This strongly indicates that a prominent motivational factor in the perpetration of transnational financial crimes is a lack of effective regulation, monitoring and awareness of those who engage in such conduct.
With little fear of detection, and in the absence of suitable mechanisms, individuals are not deterred from committing such crimes, particularly due to the huge financial and other benefits that they reap as a result of such activity. Bribery and corruption are commonplace in the modern world, due to major developments in the methods by which business transactions may be conducted.
The OECD Anti-Bribery Convention 1999 (Article 1) defines bribery as the offer, promise or giving of ‘any undue pecuniary or other advantage…to a foreign official…in order that the official act or refrain from acting in relation to the performance of official duties in order to obtain or retain business or other improper advantage’. Corruption is defined as the ‘abuse of entrusted power for personal gain’ (Transparency International UK, 2011, p. 3). While these definitions are contained in several conventions, there is interestingly no internationally accepted definition of bribery and corruption (Shacklock & Galtung, 2016). This is problematic because it results in inconsistent interpretation of these crimes in various legal systems. It also reveals a further important issue – that the development, impact and application of international law can be hindered by a lack of consensus on the definition of crimes, and also other matters, such as the degree of fault required to establish liability. As will be explored in greater detail in the following chapters, this supports the claim that a motivational cause of the perpetration of transnational financial crimes may be the lack of an international consensus on how they should be regulated, defined and implemented. The existence of international legislative frameworks, moreover, does not ensure that national laws will follow suit, or adopt a consistent approach globally (Dixon, 2013). This indicates the discrepancy that often exists between international and national law, which could be defined as a further motivational cause of the perpetration of transnational financial crimes. Although an international law may exist, if it is not incorporated effectively (or at all) into national law, then its impact and purpose is undermined. In the context of corruption, the occurrence of such crimes in the UK has been attributed to the failure of the UK to adequately incorporate international anti- corruption regulations into UK national law (Persson et al, 2013). This is perplexing because research shows that UK companies have a long-standing tradition of bribery for the purpose of winning public contracts and superseding national laws that they consider to be a hindrance to their success (Carr & Outhwaite, 2009).
This brief overview indicates the impact that transnational financial crimes can have, and also the problems that plague attempts to prevent such activities. National legislation is often influenced by broader, economic and political initiatives that seek to ensure a country’s position within the competitive global market (Brummer, 2015). This has hindered the development of an international legal framework on transnational financial crimes. In order to determine whether international or national laws have the biggest impact on the perpetration of transnational financial crimes, it is necessary to more profoundly examine a specific form of financial crime. Focus will therefore be directed towards fraud and corporate fraud.
We expect senior management to take clear responsibility for managing financial crime risks, which should be treated in the same manner as other risks faced by the business. There should be evidence that senior management are actively engaged in the firm’s approach to addressing the risks.
Self-assessment questions:
- When did senior management, including the board or appropriate sub-committees, last consider financial crime issues? What action followed discussions?
- How are senior management kept up to date on financial crime issues? (This may include receiving reports on the firm’s performance in this area as well as ad hoc briefings on individual cases or emerging threats.)
- Is there evidence that issues have been escalated where warranted?
Examples of good senior management practice
- Senior management set the right tone and demonstrate leadership on financial crime issues.
- A firm takes active steps to prevent criminals taking advantage of its services.
- A firm has a strategy for self-improvement on financial crime.
- There are clear criteria for escalating financial crime issues.
Examples of poor practice
- There is little evidence of senior staff involvement and challenge in practice.
- A firm concentrates on narrow compliance with minimum regulatory standards and has little engagement with the issues.
- Financial crime issues are dealt with on a purely reactive basis.
- There is no meaningful record or evidence of senior management considering financial crime risks.
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An Investigative Study into Causal Factors of the Perpetration of Transnational Financial & Economic Crime (s)
Fraud and corruption are always evolving. Changes in methods, technology and other factors make it critically important those trying to prevent and detect it to evolve, as well. Part of that process is to analyse fraud, corruption, bribery, money laundering and other crimes through the lense of research and casework. When experts share their findings and their knowledge into the numerous laws and regulations that address fraud, everyone benefits – especially vulnerable businesses and other organisations. CRI Group has recently published three new whitepapers that provide insightful looks into issues at the forefront of fraud and corruption today. They range from deep dives into the U.S., U.K. and other anti-fraud and anti-corruption laws around the world, to close examinations of actual fraud cases that hold lessons for all of us. We invite you to download these whitepapers and increase your knowledge of fraud, corruption, proper compliance, risk assessments, due diligence and more.
As transnational financial crimes have increased over the past few years, attentions have turned to the need to more fully understand the motivations that lead to the perpetration of such crimes. US and UK law will be critically compared in order to determine the extent to which they can be deemed effective in preventing financial crimes. This comparative study will focus on corporate fraud in a bid to support the ultimate conclusion set forth; that weaknesses in national laws are a core causal factor in the perpetration of transnational financial crimes. This reveals the need to strengthen such laws in order to deter and prevent such criminal activity.
This whitepaper provides an in-depth study of transnational financial crimes and the national laws and regulations that govern them. Laws in the U.S. and the U.K, in particular, are compared and examined in terms of effectiveness in preventing financial crimes. The comparative study focuses on corporate fraud. “The Catalysts for Economic Crime” pursues the question as to how weaknesses in national laws can be considered “a core causal factor in the perpetration of transnational financial crimes.” Readers will learn about the need to strengthen such laws or risk continued and increased criminal activity. Different types of financial crimes are examined, including money laundering, due to its prominence as a form of transnational financial crime. The research provides a detailed discussion of the inadequacies in current national laws, and proposes solutions through increased accountability, compliance-focused on self-governance and heightened monitoring for violations, among other important considerations.[/vc_column_text][vc_row_inner][vc_column_inner width=”2/3″][vc_single_image][/vc_column_inner][vc_column_inner width=”1/3″][vc_btn][/vc_column_inner][/vc_row_inner][accordion_father][accordion_son title=”About CRI Group” clr=”#ffffff” bgclr=”#1e73be”]Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.
In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.[/accordion_son][/accordion_father][/vc_column][/vc_row]
We’re All Paying a High Price for Corporate Corruption
Corruption weakens governments, fuels organised crime, stifles economic growth and discourages development. International corruption continues to undermine the progress of developing nations as rogue politicians, civic leaders and corporate representatives conduct “business as usual” to bypass bureaucratic red tape or circumvent competitive processes. But the world is taking notice and punishing those organisations accused of corruption practices. From damaged corporate reputations that lead to brand and stock devaluation to negative investor perceptions, legal action and even jail terms for corporate directors, the high cost of corruption can have a lasting effect on even the most diligent organisations.
Companies worldwide can fall victim at any time to bribery and corruption practices, particularly those organisations with multi-national operations utilising vast networks of third-party agents, suppliers, distributors and consultants. Navigating the complex web of multi-jurisdiction laws and regulations around the world related to anti-bribery and anti-corruption practices can be daunting, exhausting financial resources and taxing personnel. But now there’s an all-encompassing solution for building strong global compliance frameworks and safeguarding your organisation from third-party risks.
Global efforts to fight bribery and corruption
The past decade has seen a dramatic rise in the prosecution of organisations accused in bribery schemes. Often regarded in many regions as a standard operating procedure necessary to move business along, the practise of bribery is fast becoming a focal point for governments and global watchdogs’ intent on levying heavy fines and penalties for companies involved in the practice. In this situation which with the course of time, regional and international regulations are becoming stricter, particularly companies that are in the supply chain (importers, exporters, third-party service providers or indenters) for any foreign company.
Foreign companies are now being penalised if discovered that companies in their supply chain are involved in corrupt practices. These companies are increasingly complying with international laws such as the Foreign Corrupt Practices Act (FCPA), Malaysian Anti-Corruption. Commission (Amendment) Act 2018 introduced a new far-reaching corporate liability provision, the UK Bribery Act, Brazilian Clean Company Act. This progress intends to eliminate corruption from supply chains and third-party working relationships of foreign companies. Companies that are not complying with these laws are being panelised and prosecuted heavily.
ABAC® Center of Excellence Limited “ABAC Certification”
Anti-Bribery Anti-Corruption Center of Excellence Limited “ABAC Certification” was created to educate, equip and support the world’s leading business organisations with the latest in best-practice due diligence processes and procedures. We provide world-class services to organisations seeking to validate or expand their existing compliance frameworks to maintain a competitive edge in the world marketplace. The ABAC® Center of Excellence offers a complete suite of world-class services and solutions designed to help organisations mitigate the internal and external risks associated with operating in multi-jurisdiction and multi-cultural environments.
Bribery and Corruption Risk Management
ABAC Certification provides an expert audit of your existing risk management system to assess effectiveness and vulnerabilities while ensuring your organisation adequately complies with FCPA regulations, UK Bribery Act laws, Anti-Money Laundering regulations, and other global, regional and local regulations.
ISO 37001:2016 Certification
CRI Group offers independent global accredited ISO 37001:2016 certification to ensure that your organisation complies with this newly established standard, which is recognised and practised in more than 160 countries worldwide. Our auditors and analysts work with your team to develop policies, communications, training, monitoring and reporting measures that integrate seamlessly with your existing management processes and controls.
ABAC Certification & Strategies
ABAC® Certification’s exclusive Third-Party Risk Management-3PRM-Certified™ solution provides the very best in third-party bribery and corruption risk management, corporate compliance program, providing a proactive approach to mitigating risks from third-party affiliations and protecting your organisation from liability, brand damage and harm to the business. ABAC® presents innovative and globally accepted risk management solutions with an accredited corporate compliance program that can be applied to any organisation.
Becoming Compliant: The Benefits of ISO 37001 Certification
Because ISO 37001 is built around a set of generally accepted requirements, global organisations can become certified in the standard, utilising the services of an accredited third-party certifying body. Certification will add a distinct level of credibility to the organisation’s management systems and must be completed by a qualified, independent third-party specifically versed in ISO 37001:2016 certification. Becoming certified in ISO 37001 enables the organisation to demonstrate that it has adequate procedures in place to detect and prevent bribery on a multi-national level. Additionally, such certification:
- Ensures that the organisation is implementing a viable anti-bribery management program utilising widely accepted controls and systems.
- You are minimising corruption and bribery lawsuit likelihood.
- Lessening the possible litigation penalty through demonstrating an effective and adequate compliance program
- Assures management, investors, business associates, personnel and other stakeholders that the organisation is actively pursuing internationally recognised and accepted processes to prevent bribery and corruption.
- Protects the organisation, its assets, shareholders and directors from the effects of bribery.
- Provides acceptable evidence to prosecutors or courts that the organisation has taken reasonable steps to prevent bribery and corruption.
Bribery continues to be a significant problem on a worldwide scale and conforming to an internationally recognised standard to combat the practice while promoting ethics in business will help organisations succeed in the ever-expanding global marketplace. Contact us today to learn more about safeguarding your organisation from the outside risks associated with multi-national business affiliations.
25 Benefits of ISO 37001:2016 ABMS Certification
How to fight bribery and corruption?
Bribery and corruption are a dent on the image of any company. It is an unwanted and unsightly reflection that can be not only be mitigated but prevented in the organisation. The negative representation might result in a loss of trust among customers, affiliates and business patrons. In addition, the lack of internal anti-bribery controls and procedures has been one of the key reasons for deficiency in productivity inside global organisations. ISO 37001 ABMS
To combat these adverse effects, a strong standard is needed where governance, risk management and compliance (GRC) procedures are at the heart of the system. ISO launched ISO 37001:2016 ABMS standard – a global benchmark in the Anti-Bribery Management System (ABMS) which detects, protects and addresses the issues of bribery and corruption in the corporation. It is an assurance of employing the highest ethical standards and harnessing transparency even in the most complex business activities.
What is ISO 37001:2016 ABMS certification?
ISO 37001:2016 ABMS certification demonstrates organisation’s commitment to upholding the best practices in the corporate world. Being a framework that measures, identifies and controls the level of transparent commercial performance combined with international guidelines, it is applicable for all kinds, sizes and natures of organisations By adopting the ISO 37001:2016 ABMS certification, companies, subsidiaries and other affiliates are able to shield themselves from the dent that can tarnish their reputation and decrease their proficiency in the industry.
Through the implementation of ISO 37001:2016 certification, your organisation can cultivate a better anti-bribery and ethics culture along with the trust within the establishment. By adopting the ISO 37001:2016 certification, organisations will be able to combine the GRC strategies with the ISO system across all departmental units in a transparent and operative manner. Built with a set of globally accepted requirements, the ISO 37001:2016 certification is compliant with global, regional and local anti-bribery regulations worldwide, which increases the multi-level integrity of the association.
What are the benefits of ISO 37001:2016 ABMS Certification?
ISO 37001:2016 ABMS certification includes audit assessment procedures, to utilise the application and maintenance of a robust anti-bribery program. Being an all-encompassing standard that is integrated with other management systems, the ISO 37001:2016 ABMS certification provides several benefits:
- Competitive advantage over other organisations
- Greater awareness on the output of bribery
- Enhanced aptitude for the prevention of corruption
- Expansion of business opportunities
- Continual improvement of services and products
- Enhancement of the organisation’s reputation
- Facilitation of efficient management operations
- Apt demonstration of legal compliance and assurance
- Reduction in structural and miscellaneous costs
- Escalation of organisational assets
- Better implementation of compliance programs
- Precise execution of significant measures
- Increase in business efficiency and effectivity
- Superior trust and transparency
- Reduction of malpractice and other hazards
- Protection of resources and other capitals
- Easy integration to existing management systems
- Appropriate utilisation as a due diligence evidence
- Accurate evaluation of organisation’s position
- Recognition and deterrence of immediate threats
- Placement of adequate procedures to combat risks
- Timely observation and development of controls
- Execution of feasible anti-bribery procedures
- Practice of internationally recognised processes
- Establishment of ethical global practices
How can your organisation attain ISO 37001: 2016 ABMS certification?
With the list of returns that ISO 37001:2016 ABMS certification holds, its value is undeniable. The cost and benefits of not adopting a viable Anti-Bribery Management System are far greater than the cost of its implementation. Dedicate your time, energy and capital towards your organisation’s growth and progress. By engaging with a qualified, trained and independent third-party certification body, your company is securing its future against losses and gaining a surplus of rewards. The Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence is looking forward to connecting with you and steering your organisation towards the espousal of ISO 37001:2016 ABMS certification. Provide your company with the credibility to go beyond and reach its envisioned destination. For more information, please feel free to contact our team and visit our website www.ABACgroup.com.
Who is CRI Group?
Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.
In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.
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