Monday, April 4, 2011

Malaysia’s Custom of corruption

THE posh cars, gold watches, gold bars, and bags of cash and bank accounts collectively containing millions of ringgit discovered by the Malaysian Anti-Corruption Commission (MACC) in the homes and offices of 62 Customs officers on Friday give us a glimpse into the lavish lifestyles of those who seem to have become accustomed to an elaborate system of bribes where money was levied for each and every transaction and shared with colleagues. The fact that the MACC is also investigating at least 100 forwarding agents also shows that the custom of corruption appears to have been accepted as the standard operating procedure in importing and exporting goods.

When this is a case of receiving or giving bribes to "facilitate" customs clearance, this adds to the cost of doing business and acts as a disincentive to trade. But as the initial interrogations revealed, each step of the custom chain presents a chance for a corrupt act that goes beyond this routine illicit collection that costs business people money. The amount to be paid to Customs officers for turning a blind eye to false information in the customs declaration form with regards to the nature, quantity and value of the merchandise may just range from RM100 to RM500. But as this results in under-valuation of the merchandise, and the Customs handles millions of transactions in a year, it comes at a great cost to the national coffers in the form of forfeited revenue, and contributes to the estimated RM108 billion that is lost as a result of under-declaration, smuggling and other illegal activities.

The crippling effects of corruption on trade and development are, of course, well known, as is its extent in Customs agencies not only in Malaysia, where it is one of the four government agencies with the lowest score in a 2007 survey and ranked the fourth most corrupt by business executives in a 2008 bribe-payers index, but also worldwide. In fact, the department's inclusion in the National Key Results Area initiatives to reduce corruption requires little explanation. As only 57 corruption cases involved Customs officials from 2007-2009, out of which only 20 were brought to court, there is a clear need for more vigorous investigations and prosecutions by the MACC. But it is equally important for the newly-established compliance unit in the Royal Malaysian Customs to be up and running quickly. As reducing the opportunities for graft is at the centre of any anti-corruption strategy, it is also essential to simplify procedures and curtail the discretionary powers of officials to the bare minimum. New Straits Times Kuala Lumpur

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