This amendment stipulates that Law No. 694 is supplemented by new article 17A “Offence, Committed by Commercial Organization” under which an organization will be held liable in the event that a person associated with it gives, agrees to give, promises or offers any person a benefit so that the organization obtains or retains business or a commercial advantage.
The term «benefit» in this case refers to:
- money, donations, gifts, loans, fees, rewards, securities, movable and immovable property, different kinds of remuneration, discounts, bonuses, commission fees, compensations, deductions and profits;
- settlement of financial liabilities;
- any kind of employment;
- different services, including defense in proceedings and circumvention of criminal, civil and disciplinary sanctions;
- and offer, agreement or promise to provide any of the abovementioned benefits.
According to the law, the persons associated with an organization are its directors, partners, employees and other persons that provide services to this organization or on its behalf. At the same time, in order to ascertain whether a person provides services to an organization or on its behalf, all relevant circumstances and not just a formal character of the relationship between the person and the organization should be taken into consideration.
All companies and partnerships set up in accordance with Malaysian legislation, and foreign companies and partnerships carrying out their business activities or a part of them in Malaysia are subject to the new article.
An important feature of the changes that are being introduced is that in the event of bribery not only a legal person but also its directors, controllers, partners and other persons engaged in its management are held liable. These persons will be deemed guilty of the same corruption offence as the organization if they fail to prove that it was committed without their consent or negligence and that they took appropriate preventive measures they were obliged to take due to the character of their functions, within their competence and in those circumstances.
Legal and natural persons committing the crime under article 17A shall be punishable by a fine of not less than ten times the amount of the bribe or other benefit, if it can be estimated in monetary terms or was given in monetary form, or MYR 1,000,000 (around USD 234,000) depending on whichever is higher, or imprisonment of up to 20 years, or both.
It should be highlighted that these amendments also stipulate that legal persons can be totally exempt from criminal liability if they produce evidence proving the fact that they took adequate measures to prevent its associates from committing corruption offences. According to the law, the respective guidance for developing and introducing such measures is subject to approval by the minister supervising the activities of the Anti-Corruption Commission of Malaysia.
In December 2018, as a follow-up to these provisions the Office of the Prime-Minister of Malaysia issued the Guidelines on Adequate Procedures (GAP). The document contains a set of recommendations on how to counter corporate corruption, in particular:
- organizations should conduct comprehensive assessment of corruption risks;
- system for assessing due diligence of counterparts should be introduced;
- internal channels for obtaining information about alleged corruption offences should be established;
- anti-corruption standards and codes of conduct should be developed and introduced;
- regular monitoring of the effectiveness of implementation of corruption prevention measures should be carried out;
- anti-corruption training of employees and other stakeholders should be provided.
However, it remains unclear who will assess the “adequacy” of anti-corruption measures adopted by an organization when it comes to the decision on whether to exempt it from liability.