Malaysia’s corporate liability provision in section 17A of the Malaysian Anti-Corruption Commission Act 2009 (MACC Act) has been gazetted and will be in force on 1 June 2020. The gazette notice is found here. It is now critical for commercial organisations to have adequate procedures in place.
The corporate liability provision is modeled after section 7 of the UK Bribery Act‘s corporate offence of failure to prevent bribery.
The gazette notice dated 27 May 2020 brings into force section 4 of the MACC Amendment Act. In turn, this section 4 will bring into effect the new section 17A of the MACC Act being the corporate liability provision.
This puts to rest the speculation as to whether the coming into force of the corporate liability provision would be delayed or not.
It will now be crucial for all commercial organisations to have the adequate procedures in place in order to have a defence against this criminal offence. Public listed companies in particular will also have to be aware of the requirements under the Bursa Listing Requirements that also requires compliance on 1 June 2020 onwards (for background, see Bursa Malaysia’s Consultation Paper on the Anti-Corruption and Whistle-blowing Measures).
Read more on corporate liability here:
- Six Key Issues on the Corporate Liability Offence.
- The Adequate Procedures Guidelines.
- Preparing for Corporate Liability.
- The Airbus Bribery Case: Six Corporate Liability Lessons for Malaysian Companies.
This article has been edited to now refer to the gazette notice dated 27 May 2020.
Will the directors of a company (i.e. Company A) which is only a holding company to another corporation (i.e Company B) for disclosure pursuant to MFRS 10 Consolidated Financial Statements (but is not a holding company by virtue of Companies Act 2016) be at risk of this new provision for corruption acts done by an employee of the other corporation’s (Company B) subsidiary?