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Opinion

Tuesday, 17 April 2018 | MYT 12:00 AM

Anti-bribery system to manage risks

AT long last, the Malaysian Anti-Corruption Commission (Amend­ment) Bill 2018 has been passed at the first meeting of the sixth session of the 13th Parliament and subsequently by the Dewan Negara on April 4, 2018.

The main thrust of the Bill was the introduction of Section 17A “Offence by Commercial Orga­nization” into the Malaysian Anti-Corruption Commission Act 2009 (MACC Act 2009). Section 17A states that a commercial organisation commits an offence if a person associated with the commercial organisation corruptly “gives, agrees to give, promises or offers to any person” any gratification. The gratification can be either for the “benefit of that person or another person” with intent to “obtain or retain business for the commercial organization” or “to obtain or retain an advantage in the conduct of business for the commercial organization”.

When this corporate offence is committed by a commercial organisation, the director, controller, officer, partner or member of management is liable to a maximum fine of 10 times the sum of gratification or RM1mil, whichever is higher, a maximum jail term of 20 years, or both.

The corporate liability provisions are modelled after Section 7 of the UK Bribery Act 2010 “Failure of Commercial Organisations to Prevent Bribery”.

So what is corporate liability? Sometimes known as corporate criminal liability, corporate liability is the liability imposed upon a company or corporation for any criminal act done by any natural person. Liability is imposed to regulate the acts of a corporation.

The principle of corporate criminal liability is based on the doctrine of respondeat superior where the master is made liable for the acts of his servant. Corporations or most other legal entities may be criminally liable for the crimes of their employees and agents. Any corporation can be made liable for an act of its agent or servant if she/he (a) commits a crime; (b) acts within the scope of employment; and (c) with the intent to benefit the corporation.

The Malaysian public first came to know of this corporate liability provision on Aug 22, 2013 when former MACC chief commissioner Tan Sri Abu Kassim announced the need for such a provision in the MACC Act 2009 to allow prosecution against local and foreign companies for offences committed by their employees. It has certainly taken a long time for the MACC Amendment Bill to be passed but it is a reality now.

If a commercial organisation is charged with a corporate liability offence, it has to prove that it has in place “adequate procedures designed to prevent persons associated with the commercial organisation from undertaking such conduct” as provided under Section 17A(4). In such cases, companies and organisations with anti-bribery management systems, such as the ISO 37001:2016 Anti-bribery Management Systems, in place could reduce their risks of incurring high costs and penalties and severe damage to their reputation when confronted with such charges.

KM LOI

Subang Jaya