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Understanding the Malaysian Anti-corruption Commission (MACC) Act

The Malaysian Anti-corruption Commission (MACC) ActMACC Act carried the principal objectives as:

1) to promote the integrity and accountability of public and private sector administration by constituting an independent and accountable anti-corruption body; and
2) to teach public authorities, public officials members of the general public about corruption and its detrimental effects on public and personal sector administration and on the community.


In the past, the MACC Act 2009 defined that only individuals were liable for committing bribery offences. Introduction of Corporate Liability Provisions under the MACC (Amendment) Act 2018 (Act A1567), refined the statement as the company become liable for the corrupt acts of its “associated persons” (including employees) unless the company can prove that it had adequate procedures to prevent corruption.


Section 17A of the Malaysian Anti-corruption Commission Act Effective 1 June 2020

Section 17A penalizes commercial organisations where an associated or related person corruptly provides any gratification with the intention to get or retain business; or a plus in conducting of the business, for the commercial organisation.


Broad Definition of Commercial Organisation

The new provision provides an extensive list of “commercial organisations” which includes:

(a) companies incorporated in Malaysia, business carried out within Malaysia or overseas;
(b) companies carried out business within Malaysia or part of a business in Malaysia, whether incorporated in Malaysia or elsewhere;
(c) partnerships and indebtedness partnerships carrying on business in Malaysia or a part of Malaysia.


Persons Associated With Commercial Organisations

A person is related to a commercial organisation if he/she is a:

(a) director;
(b) partner;
(c) employee; or
(d) one that performs services for or on behalf of the commercial organisation.


A person who performs services for or on behalf of the commercial organisation is determined based on all relevant circumstances, not merely by the reference to the nature of the relationship. Category (d) is likely to include agents engaged with the commercial organisation who are not direct employees.

This new provision puts the Directors, CEO, Partners, Controllers, Officers and Managers personally liable and responsible; should the employee carry out a corrupt act with the intention to obtain or retain business advantage for the organisation with or without the management’s knowledge. It does not matter if the purpose of the corruption was not fulfilled.


Adequate Procedures

The MACC has issued the “Guidelines on Adequate Procedures” (“Guidelines”), which basically mirrored to the guidance issued by the UK Ministry of Justice for the UK Bribery Act 2010, to assist commercial organisations by putting in place on necessary procedures to prevent the occurrence of corrupt practices.

The Guidelines laid out the principles through the acronym “T.R.U.S.T.” For each of the principles, the Guidelines provide a list of recommended ‘to-dos’ which commercial organisation should adhere to as we summarized the guidelines as below:

  1. Top Level Commitment – This Guidelines highlights the necessity for top level management to seek and ensure full-compliance with the applicable laws and regulations regarding anti-corruption, and to establish the ‘tone from the top’ against any corrupt practices. Some instances of practical application of this principle incorporate the establishment of clear policies to deal with corruption risks and appropriate reporting channels for any suspected and/or real corruption incidents.
  2. Risk Assessment – A corporation should conduct corruption risk assessments occasionally to identify, address and mitigate any potential risks, especially in accommodating the rapid growth of nature businesses in this age of technology.
  3. Undertake Control Measures – Corporation should put in place the appropriate control, due diligence and proper reporting channels which are reasonable and proportionate to the size of the corporation. These should not only include measures carried out prior to entering into a relationship but may also involve continued monitoring of associated persons with, in general, more information being required from incorporated entities than individuals.
  4. Systematic Review, Monitoring and Enforcement – Regular reviews by top level management are necessary to monitor the efficiency and effectiveness of an established anti-corruption programme, and to ensure all changes in the MACC are fully adopted.
  5. Training and Communication – Training for both internal and external, is vital to ensure that policies and procedures can be implemented; and that policies are understood and applied by employees within the company. Communications should include both: (i) internal communications focus in implementing of particular policies and procedures and the formation of tools for employees and third parties to raise bribery concerns; and (ii) external communications such as the code of conduct provided to associated persons and; if appropriate and proportionate, to the general public.


Our Comment

T.R.U.S.T is inadequate procedures itself. It is merely a guidance framework on how a company should put in place of necessary procedures to prevent corrupt practices. As such, you are encouraged to attend relevant seminar to have full understanding on the MACC Act and how to build and adopt the required adequate procedures base on your company needs.

Also, do take note that although Section17A only penalizes bribe-givers and not bribe-recipients, the MACC Act 2009 contains an umbrella provision to penalise any person who corruptly receives or agrees to receive any gratification.

The Malaysian Anti-corruption Commission (MACC) Act