Serious Note for all Directors & Business Owners about New MACC Law

While many of businesses are recovering from the economic impact ravaged by Covid-19, a new law concerning directors, business owners and senior management have come into force on 1 June 2020.

What is the Law About?

The new law, which is the section 17A of Malaysian Anti-Corruption Commission Act 2009 (“the Act”) introduces corporate liability on company in corruption cases.

When an employee or other person associated with the company committed any bribery activities and their actions benefited the company, the company can be charged with criminal proceedings under the new Act.

Who is the Person Associated with the Company?

“Person Associated with the Company” has a wide definition. It will include your agent, third party service providers and your business partners. This would mean that if they have performed a bribery act and your company benefited from the action of the bribery act, you can be charged under the new s.17A Act even though they have done this without your knowledge or instruction.

Who in the Company will be Responsible?

Company here would not be limited to the directors themselves, it will also include partners, senior management team, shareholders and the ultimate person controlling the company.

How much is the Fine involved in the Offence?

You are facing uncertain amount of fine. Yes, it is not a fixed amount of fine such as RM 100,000 or RM 1 million, it is 10 times of the amount of the bribe or RM 1 million (whichever it is higher). So, you will not know how much the fine is until the amount of bribery is ascertained.

For example, if the bribery amount is RM 10,000, you will need to pay RM 1 million. In a different scenario, let us say that the bribery amount is RM 200,000, the fine will be RM 2 million (equivalent 10 times of the bribery amount).

Other than Fine, would there Other Punishment?

You could be put behind bars for not more than 20 years for an offence you did not do. Your business will be disrupted. In this time of pandemic, you will not want your business closed for investigation or the authority freezing your account. Without proper procedure and practice in place, this could happen.

What should you do Now?

  • Learning. You should learn more about the requirements of Section 17A of the Malaysian Anti-Corruption Commission Act (MACC Act) and the risk of corruption involving your company.
  • Setting Up. You should be setting up the proper procedures and policies to establish ‘adequate procedures’ as defence.

What is Adequate Procedure under s.17 MACC Act?

The Act does not say what constitute to “Adequate Procedure”. Thus, we will have to refer to the guidelines from the government. In the recent guideline, in order to satisfy the “Adequate Procedure”, you should fulfil the “T.R.U.S.T” principles.

“T.R.U.S.T” stands for:-

“T” – Top Level Commitment

“R” – Risk Assessment

“U” – Undertake Control Measure

“S” – Systematic Review, Monitoring & Enforcement

“T” – Training & Communication

What should you do Now?

    You should be looking into the following: –

  1. Top Level Commitment – Top management must lead by examples. The management should promote the culture of integrity, and allocate the resources to ensure the company complies with the anti-corruption laws in Malaysia.
  2. Risk Assessment – Review the current practice in the company, for example, the internal approval mechanism on claims and payout. Furthermore, you would also need to assess the risks involving your commercial relationship with your business counterparts, agents and any business transactions that pose a corruption risk.
  3. Undertake Control Measure – To fulfil this principle, having an anti-corruption is a must. With a properly crafted anti-corruption policy, you will then decide on the procedure and due diligence process in making sure you are fully committed to reduce the risk of corruption within your organisation.
  4. Systematic Review – Having anti-corruption policy and procedure are not enough, you need to evaluate the effectiveness of these policy and procedure from time to time. You must also be firm in implementing the policy and procedure.
  5. Training and Communication – You should give proper training to all relevant employees, agents or person associated with the company. This is to ensure that they know about the requirements and conditions of your company anti-corruption policy and procedures are followed.


There aren’t any cases in Malaysia about this new law just yet. A comparative study on the UK Bribery Act 2010 would show that the standard the company needs to show in fulfilling the “Adequate Procedure” is very high. Cases in the UK have shown that it is very critical to have done the measures correspond with the “T.R.U.S.T” principle. Without them, it would be near impossible to defend a case being charged under s.17A of the Act.

One final take away is that, the new law is fully in effect. In another words, it is just a matter of time that business owners to be charged under this new Act. By the time a business owner is to act according to “Adequate Procedure” upon being charged in court for offence under s.17A of the Act, it will be all too late.

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