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Corporate Liability under Malaysian Anti-Corruption Commission Act

The provision under Section 17A Malaysian Anti-Corruption Commission Act 2009 ("MACC Act") has established a new corporate liability principle where a business entity including a company, partnership or sole proprietorship can be considered guilty if any of its employees and/or associates commit corruption for the benefit of the entity.

The business entity is also considered guilty in the event whether or not, the upper management or its representatives know about the corruption acts committed by its employees or associates. Parties found guilty could face a maximum fine of 10 times the sum of gratification involved, or RM1 million whichever is higher or a maximum jail term of 20 years, or both.

The Prime Minister’s Department has published guidelines to assist commercial organisations in understanding what are the adequate procedures that should be implemented to prevent the occurrence of corrupt practices in relation to their business activities.

The directors of companies should take special interest and go through the guidelines thoroughly. Companies are also advised to seek for proper consultation, design and implement adequate policies and procedures suitable to their business operation and bribery risks.

Relevant Document:

Guidelines on Adequate Procedures - GIAC
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