Section 17A of the Malaysian Anti-Corruption Commission Act 2009


The new Section 17A Malaysian Anti-Corruption Commission Act 2009 (“Act”), pertaining to corporate liability on commercial organizations in Malaysia was implemented on 5 April 2018 and came into effect on the 1 June, 2020.

Section 17A(1) of the Act states that “A commercial organization commits an offense if a person associated with the commercial organization corruptly gives, agrees to give, promises or offers to any person any gratification whether 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.”

The provision establishes a corporate liability principle under which a commercial organization can be held liable if one or more of its associated persons commit corruption for the profit of the organization. Whether or not the higher management or its representatives are aware of the corruption activities perpetrated by the associated persons, the commercial organization is likewise held culpable.

In addition to liability imposed on the commercial organization, Section 17A(3) of the MACC (Amendment) Act 2018 further mentions that a senior personnel, such as the director, controller, officer, partner or person who is concerned with the management of a commercial organization at the time of the commission of the offense, shall be deemed to have also committed the same offense. Under this provision, it provides parallel personal criminal liability for the senior personnel of the commercial organization.

Section 17A(4) of the MACC (Amendment) Act 2018 expresses that a commercial organization shall be acquitted of a charge under Section 17A if it proves that it “had in place adequate procedures designed to prevent persons associated with the commercial organization from undertaking such conduct.”

The defense would be in the form of the commercial organization proving that they have implemented “Adequate Procedures” to prevent such mishap. The Government has also provided a guideline to assist commercial organizations in drafting up their Adequate Procedures. Meanwhile, the personal liability of the senior personnel in these commercial organizations can be prevented or defended by ensuring that he has exercised due diligence to prevent the commission of the offense as he ought to have exercised, having regard to the nature of his function in that capacity and to the circumstances and to prove that the misconduct was done without his consent.

As simple as it sounds, both defenses would complement each other whereby the senior personnel would have a solid defense if the commercial organization implements the “Adequate Procedures”. As an additional effort on his part, the senior personnel would also have to prove that such misconduct was not under his direction and is done without consent.

If found guilty, Section 17A(2) provides that the following penalties will apply:

  1. fine for a sum of not less than 10 times the value of the gratification, or RM1 million, whichever is the higher;

  2. imprisonment for a term of not more than 20 years; or

  3. liable to both.

The first case under the new corporate liability regime involves a company known as Pristine Offshore Sdn Bhd [2021] which was accused with one count of bribery involving RM321,350 in order to ensure that it received a subcontract from Petronas Carigali Sdn Bhd. The company in question was charged under Section 17A on March 18, 2021 after MACC discovered that its former director had allegedly offered a bribe of RM321,350 as payment to acquire a sub-contract for the company between 29 June 2020 and 14 October 2020. The bribe was reportedly provided to Mazrin Ramli, the chief operating officer (COO) of Deleum Primera Sdn Bhd, as a reward for ensuring Pristine Offshore was awarded the subcontract from Petronas Carigali, according to the charge sheet.

If found guilty, the corporation will face a fine of not less than ten times the bribe amount or RM1,000,000, whichever is larger. In brief, based on the alleged bribe's worth, the corporation would face a minimum punishment of RM3.21 million or a maximum sentence of 20 years in jail if convicted.

In a nutshell, top-level management (directors and managers) are ultimately responsible to ensure that anti-corruption measures are applied at all levels of the business. Companies should seek legal assistance on implementing appropriate procedures under Section 17A, which serves as a defense against corporate obligations.

In light of the foregoing, commercial organization’s directors, partners, and other senior personnel must be aware of and stay current with the rules and regulations governing the new Section 17A of the MACC Act 2009 in order to ensure that their commercial organization's adequate procedures, anti-corruption programs, and policies are well adopted, implemented and enforced.


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