Introduction
In 2024, Malaysia has seen a surge in high-profile raids conducted by the Malaysian Anti-Corruption Commission (“MACC” or “SPRM”), including raids targeting both public officials and corporate entities. Notable operations included the seizure of RM5 Million from a safe house linked to a prominent Selangor politician over a sand-mining corruption probe, and additional raids uncovering RM321,000 from two safehouses in addition to the RM5 Million seized earlier. More recently, MACC raids have extended to major organizations, including an e-commerce company and two government-linked companies (GLCs), highlighting the authorities’ aggressive stance against corruption. Similarly, the Labuan Malaysian Maritime Enforcement Agency intercepted a vessel smuggling liquor and seized boat engines worth over RM472,000 during a dawn raid. These unannounced operations are typically conducted at dawn, allowing enforcement agencies to leverage the element of surprise to gather as much evidence as possible while minimizing the risk of its destruction. Given this intensifying enforcement trend, businesses and individuals must be well-informed of their legal rights during dawn raids.
Understanding Dawn Raids
A dawn raid refers to an unannounced visit by enforcement authorities, typically conducted early in the morning to leverage the element of surprise. Authorities such as the MACC, Malaysia Competition Commission, Bank Negara Malaysia, Inland Revenue Board of Malaysia or other regulatory bodies may carry out these operations. The primary objective of a dawn raid is to secure evidence that may otherwise be concealed or destroyed.
These raids are not conducted arbitrarily. Enforcement authorities are empowered under various legal frameworks, such as the Malaysian Anti-Corruption Commission Act 2009 (“MACC Act”), the Income Tax Act 1967, and the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. These laws empower enforcement authorities to search premises and seize materials without prior consent. Although different enforcement authorities have different legal justifications for conducting the raid, the purpose is most likely similar.
What Happens During Dawn Raids
In most cases, enforcement authorities require a search warrant before conducting a dawn raid unless specific legal provisions state otherwise. Under the MACC Act, search and seizure activities generally require a warrant authorized by the Public Prosecutor or a senior officer of the Commission. However, if obtaining a warrant could result in delays that compromise the investigation, raid officers may proceed without one.
Dawn raids typically occur at advanced stages of investigations and are often preceded by detailed surveillance. During the raid, enforcement officials have the authority to access and search business premises thoroughly, including lockers, desks, safes, vehicles, computers, servers, and company mobile devices. They may seize or copy documents and question employees, provided they stay within the boundaries of their legal authority.
Businesses and individuals are legally obligated to cooperate with enforcement authorities during such raids. Obstructing an officer may result in fines or criminal charges. While businesses and individuals must cooperate during dawn raids, enforcement authorities are legally restricted from accessing or removing documents protected by legal privilege such as confidential communications and information between a business and its solicitors. Disclosure of such privileged information can only be compelled by a High Court order while protecting information related to any pending proceedings, as exemplified by Section 46 of the MACC Act.
At the outset of a raid, it is advisable for the company’s in-house or external lawyer to engage with the officer in charge to agree on the scope and sequence of the operation. Additionally, each officer should be accompanied by a lawyer to ensure that their actions remain within legal bounds. Although businesses may request that enforcement officials wait for legal counsel to arrive, authorities are not obligated to do so and should not be obstructed if they choose to proceed immediately.
Powers of Raid Officers
Although enforcement authorities are not obligated by law to disclose the purpose of a dawn raid, it is essential for businesses and individuals to understand their extent of powers when conducting a raid. These powers, which are broadly similar under the MACC Act, Competition Act 2010, and Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, include the following[1]:
- Conduct searches with or without a warrant and forcibly enter premises if necessary.
- Search, seize, and take possession of books, documents, records, accounts, data, or other items.
- Inspect, copy, or extract information from documents or data.
- Search persons on the premises and seize items found on them.
- Detain individuals until the search is complete.
- Break open and examine any container, article, or receptacle.
- Access, copy, or image computerized data and seize computers if required.
- Provide a detailed list of seized items.
- Interview individuals on-site concerning matters under investigation.
The Do’s and Don’ts During Dawn Raids
We can never predict or expect when enforcement authorities would come knocking on our door. Here are essential guidelines outlining the key do’s and don’ts to ensure a lawful, efficient, and well-managed response during a dawn raid.
The Do’s
1. It is important to stay calm and composed during a raid. Maintain a professional demeanour throughout the process.
2. Always verify the identification of the officers. Politely ask them to present their SPRM identification cards and record their names and identification numbers.
3. Check the warrant before allowing the raid to proceed. Ensure it is signed, contains the correct address, and specifies the purpose of the raid. If no warrant is presented, politely inquire under which legal provision the raid is being conducted.
4. Inform senior management, legal counsel, or compliance officers immediately.
5. Cooperate with the officers while observing their actions closely. Allow access to warranted areas but ensure proper supervision.
6. Document everything that transpires, including confiscated items, questions asked, and responses given. Obtain and sign an inventory list of seized items. In most cases, the investigators will search for and potentially seize the following items: –
a. Electronic storage devices
b. Company Records (Contracts, agreements, meeting minutes, and financial statements)
c. Security Footage
d. HR Documents
7. Protect confidentiality by informing the officers if any documents are legally privileged (e.g., communications with lawyers).
8. Seek legal advice if you wish to consult your lawyer. Although officers are not obligated to wait, you have the right to legal representation.
9. Follow up post-raid by debriefing with your team and legal counsel, reviewing all records of the raid, and ensuring compliance with SPRM procedures.
The Don’ts
1. Do not obstruct the officers or prevent them from executing their duties, as obstruction can result in a criminal offence liable with penalties and criminal charges.
2. Avoid tampering with evidence. Do not hide, destroy, or alter any documents or data, as this can constitute a criminal offence.
3. Do not volunteer unnecessary information. Answer questions truthfully but refrain from providing unsolicited information.
4. Never sign any documents without fully understanding them. Consult your lawyer before signing any statements or declarations.
5. Refrain from intimidating or threatening the officers, as aggressive behaviour is a serious offence.
6. Do not discuss the raid publicly with colleagues, media, or external parties until advised by your lawyer.
7. Avoid assuming that officers can take all documents. Politely raise concerns if unrelated items are seized and document the incident.
8. Do not ignore post-raid obligations. Follow through on requests or instructions from SPRM in consultation with your lawyer.
Ultimately, it is advisable for all businesses to seek legal counsel to understand their legal obligations and develop clear protocols for handling dawn raids effectively, ensuring compliance while safeguarding their legal rights.
What Proactive Measures Can You Take Before SPRM Comes Knocking on Your Door?
To be prepared for a potential dawn raid by the SPRM, businesses should implement the following proactive measures:
a. Conduct Regular Compliance Audits
Ensure company policies and practices comply with anti-corruption laws. Regular audits shall be conducted to ensure compliance to this policy and such audits may be conducted internally by the Company.
b. Train Employees
Provide regular training on handling SPRM raids and understanding anti-corruption laws. The Company shall conduct an Anti-Bribery and Anti-Corruption awareness program for all its employees and directors on a regular basis. For example,[2]:
o Designate a point of contact within the organization to liaise with SPRM officers. This could be the Chief Executive Officer, Chief Financial Officer, or Head of Legal Department.
o Create checklists specifying processes and procedures for employees, from receptionists and security personnel to designated executives and in-house/external lawyers.
o Engage legal counsel to conduct mock dawn raids to test the effectiveness of these protocols and ensure that employees are prepared for enforcement authority visits.
c. Retain Legal Counsel
Establish a relationship with legal counsel for immediate assistance during dawn raids and other compliance-related incidents.
Conclusion
In conclusion, preparation and vigilance are crucial in managing potential SPRM dawn raids. By conducting regular compliance audits, providing comprehensive employee training, and engaging legal counsel for immediate assistance, companies can navigate such situations more effectively. Ultimately, these proactive measures serve as a strategic framework for businesses to mitigate risks and ensure legal compliance in the face of unexpected dawn raids.
For further information, please contact:
Abu Daud Abd Rahim, Partner, Azmi & Associates
a.daud@azmilaw.com
- Section 31 of Malaysian Anti-Corruption Commission Act 2009 (Act 694); Section 25 of Competition Act 2010 (Act 712); Section 31 of Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613).
- Ho Hup Construction Company Berhad Anti-Bribery and Corruption Policy: https://www.hohupgroup.com.my/wp-content/uploads/pdf/HHCCB-ABCP.pdf.
