The corporate liability in Malaysia is specifically regulated by Section 17A of the Malaysian Anti-Corruption Commission Act 2009 (Section 17A MACC Act 2009), which was effectively implemented since 1 June 2020. The provision imposes liability on a commercial organization for corruption committed by persons associated with it. The Malaysian Anti-Corruption Commission (MACC) is the government agency that oversees the implementation of the provision.
According to the provision, associated persons include the directors, partners and employees of the commercial organization and persons who perform services for and on behalf of the commercial organization. The convicted commercial organization can be punished with a fine of not less than 10 times the sum or value of the gratification, if it can be valued or RM1 million (whichever is higher) or imprisonment for a term not exceeding 20 years or both.
Commercial organizations include the following:
- A company incorporated under the Companies Act 2016 and carries on a business in Malaysia or elsewhere.
- A company wherever incorporated and carries on a business or part of a business in Malaysia.
- A partnership registered under the Partnership Act 1961 and carries on a business in Malaysia or elsewhere.
- A partnership registered under the Limited Liability Partnerships Act 2012 and carries on a business in Malaysia or elsewhere.
- A partnership wherever formed and carries on a business or part of a business in Malaysia.
A commercial organization can defend itself by proving that it has adequate procedures designed to prevent persons associated with it from undertaking an act of corruption. The Prime Minister’s Office in December 2018 issued guidelines on the adequate procedures, which include the following:
- Top-Level Commitment: The top-level management must ensure that the commercial organization has fully complied with applicable laws and regulatory requirements on anti-corruption. The top-level management must establish, maintain and periodically review an anti-corruption compliance program and communicate it with internal and external parties. The top-level management must also encourage the use of whistleblowing channel.
- Risk Assessment: Comprehensive risk assessments are advised to be conducted every three years, and periodic assessments can be conducted whenever necessary.
- Undertake Control Measures: Appropriate controls and measures are advised to be implemented. It includes the implementation of due diligence and the use of reporting channels, such as the Whistleblowing channel.
- Systematic Review, Monitoring and Enforcement: Regular reviews to assess the performance, efficiency and effectiveness of the anti-corruption program are advised to be conducted. The forms of reviews can either be an internal or external audit.
- Training and Communication: The commercial organization should develop and disseminate its anti-corruption policy and management system to the internal and external parties. It should be available for the public and appropriately communicated to all personnel and business associates.