KUALA LUMPUR (Oct 11): The charges in Datin Seri Rosmah Mansor’s RM7.1 million trial is bad in law, as it equates failure to declare income tax as a money laundering offence, the High Court heard on Friday.
Defence lawyer Datuk Firoz Hussein Ahmad Jamaluddin argued this during Rosmah’s application to strike out the 17 charges in her money laundering and tax evasion case.
“There is no [unlawful] transaction. There is no unlawful activity and no unlawful proceeds which come out of the failure of filing tax returns,” Firoz said.
“The failure to file returns is an omission; it is not a transaction,” he argued.
Firoz added that if both offences were the same, then thousands of Malaysians who don’t file their tax returns would be committing money laundering, when in actuality, their income was legitimately earned.
“Was the [Anti-Money Laundering Act] established to catch those who don’t file their tax returns,” he asked.
Rosmah’s team of lawyers are contending that the charges are defective and bad in law, and that their client should be acquitted.
Among others, they contend that Section 85 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA), where the finance minister has the power to add a predicate offence (main offence) in the second schedule to the Act, is ultra vires (beyond the minister’s powers).
They contend that the inclusion of Section 112 of the Income Tax Act, which concerns failure to furnish returns in the second schedule, is unconstitutional.
In his brief reply on Friday, Deputy Public Prosecutor Ahmad Akram Gharib countered that Section 85 of AMLA is very much constitutional, as the finance minister should be equipped with the power to add other identified offences as a serious offence under the law.
Ahmad Akram said the insertion of Section 112 of the Income Tax Act is also not unconstitutional, because it technically means that those who don’t declare their tax returns can enjoy the proceeds of unlawful activity. The law was created to prevent enjoyment of proceeds from unlawful activities by the offenders.
“[The point of the law] is that that enjoyment becomes unlawful,” he said.
Ahmad Akram is slated to continue his submissions when hearing resumes on Nov 12.
Rosmah first filed the application to strike out the charges in September last year. The trial began in December last year, and is being heard before High Court judge K Muniandy.
Previously in August, parties informed the court that they had reached an “agreement” and they just needed to finalise some documentation.
However, in September, parties said they needed more time to iron out the details.
In this trial, Rosmah faces 17 charges involving RM7.1 million transferred into her personal bank account, between 2013 and 2017.
The charges are framed under AMLA.
On the first eight counts, she is charged with money laundering by directly engaging in a transaction involving proceeds of unlawful activities, amounting to RM1.1 million, that were deposited into her account.
On the ninth to 12th counts, she is charged with directly engaging in 227 transactions involving proceeds of unlawful activities totalling RM6 million, which were also deposited into her account.
On the 13th to 17th counts, she is charged with engaging in money laundering by failing to file a return on the sum that was deposited into her account, as required under the Income Tax Act.
In its opening statement, the prosecution flagged that Rosmah had no independent source of income, yet had large sums of money deposited into her account.