The Malaysian Anti-Corruption Commission (MACC) (Amendment) Act 2018 passed by Parliament in April 2018 introduced a new strict statutory corporate liability offence under Section 17A of the MACC Act 2009 which came into effect on 1 June 2020. Under Section 17A, a commercial organisation is deemed to have committed an offence if any persons associated with the commercial organisation commits a corrupt act in order to obtain or retain business or advantage for the organisation.
The Act stipulates that persons considered to be “associated” with a commercial organisation include directors, partners and employees of the commercial organisation, as well as any person “who performs services for or on behalf of the commercial organisation.”
Like the UK Bribery Act and the US Foreign Corrupt Practices Act (FCPA), under Section 17A of the MACC Act 2009 (Amendment 2018), a commercial organisation can be subjected to legal proceedings should persons associated with the commercial organisation, including third parties, commit corruption offences.
The organisation’s only defense to absolve liability under Section 17A is to demonstrate that it has put in place adequate procedures to prevent occurrence of corrupt practices. In the event of failure to prevent bribery by an associated person, as part of its “defence”, the organisation is required to prove that it had in place an effective third party risk management program which is designed to prevent persons associated with it from engaging in corrupt activities.