Malaysian Anti-Corruption Commission (“MACC”) will enforce new Corporate Liability Provisions under Section 17A of the MACC Act 2009 (“MACC Act”) effective from June 2020 to enable the prosecution of commercial organisations involved in corruption.
The provision of Section 17A of the MACC Act establishes the principle of a commercial organisation’s criminal liability (“Corporate Liability”) for corrupt practices of its employees and/or person(s) associated with the commercial organisation in cases where such corrupt practices are carried out for the organisation’s benefit or advantage. The commercial organisation may be liable whether or not its top-level management and/or representatives had actual knowledge of the corrupt acts of its employees and/or associated persons.
The MACC Act clarifies that a commercial organisation means a company, partnership that is formed under Malaysian law or a company or partnership that carries on business or a part of a business in Malaysia. It also provides that the penalty for an offence under Section 17A shall be a fine of not less than 10 times the value of the gratification in question or RM1 million, whichever is higher, or imprisonment for not more than 20 years, or both.
Apart from the above, the MACC Act also provides that senior personnel, such as a director, controller, officer, partner or person who is concerned with the management of a commercial organisation found to be liable for corruption under Section 17 of the MACC Act at the time of the commission of the offence, shall be deemed to have also committed the same offence, unless the individual proves that the offence was committed without his or her consent or connivance; and that he or she had exercised “due diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his function in that capacity and to the circumstances”.
In other words, a commercial organisation and its senior personnel at the time of the commission of the offence will be deemed to have personally committed the offence as well unless they can raise an absolute defence to such offence by showing that it had “adequate procedures” in place to prevent such conduct.
The Guidelines on Adequate Procedures has been issued by the Prime Minister’s Department to assist commercial organisation in understanding what are the adequate procedures that should be implemented to prevent the occurrence of corrupt practices in relation to their business activities
Under the guidelines provided, there are five main principles: T.R.U.S.T, which a commercial organisation may use as the reference points for its anti-corruption policies, procedures and controls:
T – Top Level Commitment
R – Risk Assessment
U – Undertake Control Measures
S – Systematic Review, Monitoring and Enforcement
T – Training and Communication
Need more information in relation to the Corporate Liability under Section 17A of the MACC Act? Feel free to contact Roundtable Consultancy, we will be happy to explain to you in more details.
