The Malaysian Anti-Corruption Commission Act 2009 (MACC Act) has been amended, among others, to introduce corporate liability provision for bribery and corruption under Section 17A, which came into effect on 1st June 2020.
The enforcement of Section 17A of the MACC Act would be to fulfil the international requirements under Article 26 of the United Nations Convention Against Corruption (UNCAC), which refers to the liability of legal persons.
Section 17A was enacted to enable organisations involved in corruption activities to be subjected to legal action and persons associated with the organisations will be deemed to commit the corresponding offence unless it can be proven that adequate measures have been put in place.
Section 17A not only differs but goes further than Section 7 of the UK Bribery Act 2010.
Essential Features of Section 17A of the MACC Act
- Criminalizes an organisation for corruption-related actions by associated persons done for the benefit of the organisation.
- States that a commercial organisation commits an offence if a person associated with it corruptly gives, offers or promises any gratification to any person with an intent to obtain or retain business or a business advantage for the said commercial organisation
- Organisations/companies whom these individuals work for will also be held liable for not preventing the corrupt acts from happening.
- Corrupt actions of ordinary employees will have an impact on their organisations/companies.
- Extension of Personal Criminal Liability to Senior Personnel where,
Section 17A(3) provides a parallel personal criminal liability for the senior personnel of the commercial organisation which include directors, controllers, officers, partners or persons concerned with the management of a commercial organisation. This is one aspect where Section 17A not only differs but goes further than Section 7 of the UK Bribery Act 2010 since the latter does not have a provision deeming personal liability.
Who are Liable under Section 17A?
Scope of Associated Persons:
Section 17A(6) clarifies that category of persons considered associated with a commercial organisation include:
- directors, partners and employees of the commercial organisation; and
- any person who performs services for or on behalf of the commercial organisation.
Hence, when an organisation commits an offence, its directors and key personnel are automatically deemed guilty of the same crime.
Adequate Procedures
Section 17A of the MACC Act 2009 creates a strict liability offence for commercial organizations, where commercial organizations must be aware of the defence of having adequate procedures in place.
Adequate procedures can be prepared, implemented and enforced effectively following the guidelines issued by the Prime Minister’s Office in December 2018 (“Guidelines”). The Guidelines were issued pursuant to Section 17A(5) of the MACC Act 2009, which took a similar approach to Section 9(1) of the UK Bribery Act 2010.
These Guidelines assist commercial organizations in understanding the concept, implementation and enforcement of the adequate procedures referred to in Section 17A(4) of the MACC Act 2009.
A commercial organization’s adequate procedures should be based on the principle of TRUST, which consists of the following:
- Top-Level Commitment
- Risk Assessment
- Undertake Control Measures
- Systematic Review, Monitoring and Enforcement
Conclusion
Therefore, directors, partners and other senior personnel of commercial organizations must be aware and stay up-to-date with the rules and regulations surrounding the new Section 17A of the MACC Act 2009 to ensure that their commercial organization’s adequate procedures, anti-corruption programs and policies are well adopted, implemented and enforced.
