Section 17A MACC Act Enforced on 1st June 2020

On 1st June 2020, the new provision, Section 17A of the Malaysian Anti-Corruption Commission (MACC) Act 2009 (Amendment 2018) on corruption offenses by commercial organisations comes into force.

The date of enforcement was issued by the power of the Minister in the Prime Minister’s Department (Parliament and Law) Datuk Takiyuddin Hassan through the Federal Government Gazette P.U (B) 247 dated 27th May 2020.

Previously, the Parliament passed the amendments to the Act on 5th April 2018 and it was gazetted on 4th May 2018. The government had also allowed a two-year grace period from the date for commercial organisations to make necessary preparations before the provisions of the new law go into effect.

The provision of this law, which is also known as corporate liability, encourages business activities to be conducted with integrity and to promote good governance practices in organisations, and not solely for the purpose of punishing commercial organisations.

Under Section 17A of the MACC Act 2009 (Amendment 2018), commercial organisations are also liable and can be punished if their employees or associates are involved in corruption. The commercial organisation could be considered guilty based on whether its top management or its representatives are aware of the corruption committed by their employee or associates.

If a commercial organisation is convicted, the penalty under Section 17A (2) is a fine of not less than 10 times the value of bribe or RM1 million, whichever is higher, or imprisonment for up to 20 years, or both. However, the commercial organisations can defend themselves if they can show that the organisation has implemented ‘adequate procedures’ to prevent corruption in their operation or business activities.