MACC Act’s Corporate Liability Provisions are in place – time to raise the bar!

Last year Malaysia took a further step against corruption with its new Corporate Liability Provisions of the Malaysian Anti-Corruption Commission MACC (Amendment) Act 2018. Today, Pristine Offshore Sdn Bhd has become the first company to be charged with the newly introduced provision, and MACC officers have arrested several JPJ officers, highlighting how important it is to raise the bar! 

If you do business IN Malaysia or WITH a Malaysian company, you need to raise the bar and question yourself, “do I have adequate procedures in place?” 

Section 17A of the MACC Act 2018

This measure has been compared to the UK Bribery Act 2010 and the U.S. Foreign Corrupt Practices Act (FCPA) 1977 (The Star, 2019). Section 17A of the MACC Act 2018 will enable the prosecution of individuals accused of corruption, not only organisations. Under the provisions, an organisation’s “directors, controllers, officers, partners, or managers are deemed to have committed the same offence, which carries a maximum penalty of a fine of not less than 10 times the value of the gratification or RM1 million, whichever is higher, and 20 years’ jail unless the firm can prove that it had in place procedures designed to prevent corrupt practices. The provision is modelled after the United Kingdom’s Section 7 of the Bribery Act 2010, which is widely regarded as ‘the toughest anti-corruption legislation in the world'” (New Straits Times, 2019). Perhaps it’s no coincidence that Malaysia improved by six points and jumped 10 places to 51 in Transparency International’s 2019 Corruption Perceptions Index (CPI). The CPI “measures public sector corruption, including bribery, diversion of public funds, public office use for private gain, and nepotism in the civil service” (Free Malaysia Today, 2020).

The change in law and perception meets popular demand in Malaysia, where the 1MDB case became the defining bribery scandal in the region. Malaysia’s state-owned investment fund, 1MDB, was supposed to attract foreign investment. Instead, it “spurred criminal and regulatory investigations around the world that have cast an unflattering spotlight on financial deal-making, election spending and political patronage under former Prime Minister Najib Razak. The figures are mind-boggling: a Malaysian parliamentary committee identified at least $4.2 billion in irregular transactions related to 1MDB. In May, Najib was ousted from power in a general election as the scandal fueled a voter backlash that ended his party’s 61 years of rule. As the investigations continue, Najib faces trial on corruption charges, and U.S. prosecutors have implicated at least three senior Goldman Sachs Group Inc. bankers in a multiyear criminal enterprise” (Bloomberg, 2018).

However, the 1MDB scandal also demonstrated that investigation and enforcement were stepping up in the face of public outrage. The MACC Act 2018 provided regulators with more teeth in the fight against corruption in the country. At ABAC Summit – Kuala Lumpur, organised by ABAC®-Malaysia, Mohd Nur Lokman bin Samingan, Assistant Commissioner at Malaysian Anti-Corruption Commission, said that some of the MACC Act’s provisions are meant “to encourage business and commercial activities being carried out in a corruption-free environment; to encourage all commercial organisations to take adequate measures to prevent corruption in their respective organisations, and to promote better corporate governance and legal compliance by requiring corporations to take proactive roles in preventing corruption.”

Demonstrating “adequate procedures” with ISO 37001 certification

Now more than ever, it is critical that organisations undergo a program of compliance and demonstrate “adequate procedures” with ISO 37001:2016 Anti-Bribery Management standard certification. ISO 37001 is established, tried and tested program that provides a comprehensive program for preventing bribery and corruption. It can be tailored to organisations of all sizes and industries, and certification requires the demonstration that processes have been implemented effectively – with follow-up evaluations. The new corporate liability provisions to the MACC Act are essential for safeguarding Malaysia’s economy and investments.

It is crucial to trust your anti-bribery and compliance strategies to accredited ISO 37001 certification providers. ABAC®-Malaysia has recently announced that the United Kingdom Accreditation Service (UKAS) has accredited its ABAC Certification services for administering the ISO 37001:2016 Anti-Bribery Management Systems standard. ABAC®-Malaysia provides ISO 37001:2016 anti-bribery management systems certification for all types of organisations across the globe that implement prescribed measures to prevent, detect and address bribery. Pursuant to this, UKAS accredited ABAC® in the UK, Malaysia and UAE for ISO 37001:2016 Anti-Bribery Management Systems (ABMS) certification under ISO/IEC 17021-1: 2015 conformity assessment requirements for bodies providing audit and certification of management systems.

Trust ABAC®-Malaysia, your accredited certification provider in Malaysia, to comply with requirements of Section 17A of the Malaysian Anti-Corruption Commission Act (MACCA 2018) with confidence. To learn more about how the ABAC®-Malaysia can help tailor an ISO 37001 certification program to your organisation, contact ABAC®-Malaysia today.

Prove That Your Business is Ethical with our FREE HEBA (worth USD 45000)

Complete our FREE Highest Ethical Business Assessment (HEBA) & evaluate your current Corporate Compliance Program. Find out if your organisation’s compliance program is in the line with worldwide Compliance, Business Ethics, Anti-Bribery and Anti-Corruption Frameworks. Let ABAC®-Malaysia experts prepare a complimentary gap analysis of your compliance program to evaluate if it meets “adequate procedures” requirements under UK Bribery Act, DOJ’s Evaluation of Corporate Compliance Programs Guidance and Malaysian Anti-Corruption Commission.