The MACC (Amendment) Act 2018 passed by the Parliament in April 2018 introduces the new section 17A – Offence by Commercial Organizations and this new Section 17A makes company directors and senior officers liable for the corrupt acts committed by their employees, agents, business partners and associates in or outside of Malaysia regardless of whether or not they had actual knowledge of the corrupt act. This new Act will make it more difficult for employers to evade any liability by arguing that the corruption committed by their employees which they benefit from, were not on their instructions or were committed without their knowledge.
The implication of this new Act, upon conviction, is a fine of not less than 10 times the sum of gratification involved or RM1 million, whichever is higher; a maximum jail term of 20 years or both.
Under this new Act, the company can only defend a corporate liability offence if it can prove that it had “adequate procedures” in place to prevent persons associated with the company from carrying out the corrupt conduct. In view of all this, it is necessary for companies (or commercial organisation i.e. the term used in the Act) to equip themselves with adequate knowledge and procedures.