SEPTEMBER 6 — Counterfeiting is a criminal enterprise occurring all too often in South-east Asia. Having significant negative effects on currencies and criminality around the world, what can be done to stem the tide of fake notes and false documents?
A Malaysian man was recently charged with counterfeiting currency in Sibu. When questioned it was revealed that he had attempted to use the fake RM4,000 to fund his upcoming wedding. He was arrested after being questioned for being in possession of the counterfeit notes, and subsequently confessed to producing them at his office.
Counterfeit currency is charged with supporting dictatorships, corrupt and authoritarian regimes, terrorism, and conventional criminals. Interpol states that counterfeiting “reduces the value of genuine currency, leads to inflation and potentially destabilises” economic systems.
An example of the political consequences is seen in North Korea, known for its extensive production of fake US dollars. Counterfeiting helps the regime to fund its condemned activities, despite the strain of heavy financial sanctions and the country’s broad status as a pariah state. In this way, counterfeiting allows bad actors to circumvent the interventions and controls imposed by the rest of the international community, perpetuating problem states and regional instability.
This is especially relevant to the fiduciary printing industry which is responsible for the legitimate printing of state currencies. Where standards are low the ease with which a criminal can imitate banknotes increases. Some see that the responsibility lies with central banks that must raise standards for contracts to safeguard against such activities.
Fiduciary printing at its most advanced and secure is a technologically sophisticated, expertise-heavy industry. There are only a small number of contractors around the world who are able to adhere to the highest standards of practice. In order to do this, they must continually advance their technologies and methods of counterfeit prevention using bank data to improve and critique process effectiveness.
It is the considerable gap between the best and the lowest performing banknote producers which has led to the call for universal international standards of practice. Through developing industry conventions within banknote printing, counterfeiting operationscan be significantly stunted. Experts suggest that with advanced techniques, it can become prohibitively expensive to create convincing fakes.
Malaysia has long-standing issues with counterfeiting and corruption. Transparency International’s annual Corruption Perception Index of 2018 put Malaysia at number 61 out of 180 countries polled. While this is better than average for South-east Asia, it is far below Malaysia’s similarly developed neighbours in Singapore and Hong Kong.
Corruption and financial crimes in Malaysia have been under the spotlight since one of its most powerful men, the former prime minister, Najib Razak, began facing extensive graft charges. The scandal came at the same time that the Barisan Nasional coalition lost a 61-year grip on power.
Najib is accused of diverting hundreds of millions of dollars from public funds from the 1MDB sovereign wealth fund into personal accounts. He faces a total of 42 counts of corruption charges. The former minister’s wife will also face trial on separate charges regarding the misuse of public funds.
In light of the Najib case, and others like it, many countries, institutions, and public figures have been calling for more to be done to combat cultures of corruption.
ISO 37001 is a preventative framework for anti-bribery developed by the International Organisation for Standardisation. It is gaining traction in state level contracts as a solution to the problem. The MACC (Malaysian Anti-Corruption Commission) Deputy Chief Commissioner (Prevention), Datuk Shamshun Baharin Mohd Jamil said that the standards system was launched for the purpose of guiding and improving an organisation's anti-bribery management system. He added that the standard has been internationally recognised in promoting good governance in an organisation in implementing an effective anti-bribery management system.
Were Malaysian institutions to encourage its adoption, this would go a long way towards reducing corruption within its borders. The arrival of Nor Shamsiah Mohd Yunus at the head of the Central Bank in 2018 is a very good sign since she is known to have been intransigent with cases of corruption. A new trend recognized by the international community, since the IMF, in the person of its President Christine Lagarde, very recently praised the measures taken by the government of Malaysia for its fight against corruption in these terms: "I’m delighted Prime Minister Tun Dr Mahathir (Mohamad) has made the fight against corruption and improvement in governance as his priorities."
* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.