The new National Security Council Act will allow Prime Minister Najib Razak to designate "security" areas where he can deploy forces to search any individual, vehicle or premise without a warrant.

Under the new powers, which will apply from August 1, investigators will not have to hold formal inquests into killings by the police or armed forces in those areas.

The ruling government coalition has said the law is necessary to counter threats to security, but critics have expressed concerns that the new measures could be used to silence critics of the One Malaysia Development Berhad (1MDB) fund scandal.

"The concern among the civil society and others is because the National Security Council can be used against anything that the government is unhappy with," said Wan Saiful Wan Jan, chief executive of the Institute for Democracy and Economic Affairs. He said it could extend to public rallies.

The law was enacted without the customary royal assent being obtained from Malaysia's King Abdul Halim, who had asked for some changes to the text.

One Malaysia Development Berhad (1MDB)

The new measures come as more protests are being planned over allegations of corruption in government, and management of the 1MDB. Until recently, the prime minister was chair of the advisory council of the 1MDB development fund, which he founded in 2009 and which aimed at turning Kuala Lumpur into a financial hub.

Pressure increased last week when the US Justice Department filed civil lawsuits alleging that $3.5 billion (3.1 billion euros) had been misappropriated from the fund. The lawsuits are seeking to seize $1 billion of assets, including property and a private jet, allegedly taken from the fund as part of "an international conspiracy to launder money." The Wall Street Journal reported it had seen written evidence of funds moving from the 1MDB to Najib Razak's bank accounts. The prime minister denies wrongdoing.

US finance house Goldman Sachs Group Inc was sued on Tuesday by a major shareholder of a Malaysian bank it once advised. It had accused the Wall Street bank of fraudulently shortchanging it in a merger. In a complaint filed with the New York State Supreme Court in Manhattan, Primus Pacific Partners said it was seeking $510 million in damages after the Goldman Sachs allegedly concealed its conflicts of interest with Najib Razak and the 1MDB sovereign wealth fund.

Restrictions could limit protests

There have been restrictions on reporting the 1MDB scandal in Malaysia with blocks to online news portals, while media groups and journalists have been targeted.

Malaysia's opposition coalition is planning an anti-Najib Razak rally on Saturday. Under current law, rallies can still be organized, but under the new measures in force from Monday, protests can be disallowed once a location has been designated a "security area."

The Inspector-General of Police, Khalid Abu Bakar, said earlier this week he would not allow rallies that demand Najib step down.

jm/msh (Reuters, AFP)