Malaysian Anti-Corruption Commission (Amendment) Bill 2018 .

 

6 April, 2018

 

 

The Malaysian Anti-Corruption Commission (Amendment) Bill 2018 (“MACCA Bill 2018”), which passed the first reading on 26 March 2018, seeks to introduce several amendments into the principal Act, that is, the Malaysian Anti-Corruption Commission Act 2009 (“MACC Act 2009”).

 

      i.        Offence by commercial organisation

 

The key amendment is provided in Clause 4 of the MACCA Bill 2018 which seeks to introduce a new section 17A into the principal Act. The new section 17A is worded widely and provides that a commercial organisation commits an offence if a person associated with the commercial organisation corruptly “gives, agrees to give, promises or offers to any person” any gratification. The gratification can be either 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”.

A person will be deemed to be associated with a commercial organisation if he is:    

 

• a director;
• a partner;
• an employee ;
• a person who performs services for or on behalf of the commercial organisation (which shall be determined by reference to all the relevant circumstances and not merely by reference to the nature of the relationship between him and the commercial organisation).

 

The definition of “commercial organization” is equally wide, and means:

 

• a company incorporated under the Companies Act 2016 and carries on a business in Malaysia or elsewhere;
• a company wherever incorporated and carries on a business or part of a business in Malaysia;
• a partnership.

 

Any commercial organisation which commits an offence shall be on conviction liable to a fine not less than 10 times the sum or value of the gratification or RM1 million, whichever is higher, or to imprisonment for a term not exceeding 20 years or both.

The defence available to the commercial organisation in the event of a charge is to prove that it had in place “adequate procedures designed to prevent persons associated with the commercial organization from undertaking such conduct”.

If an offence is committed, a person who is the director, controller, officer, partner or is concerned in the management of the commercial organisation’s affairs bears the burden to prove that the offence was committed without his consent or connivance and that he exercised due diligence to prevent the commission of the offence as he ought to have exercised, having regard to the “nature of his function in that capacity and to the circumstances”.

 

     ii.        Admissibility of documentary evidence

 

Clause 11 of the MACCA Bill 2018 seeks to introduce a new section 41A. The new section 41A will provide that any document obtained by the Malaysian Anti-Corruption Commission shall be admissible in evidence in any proceedings under the principal Act, notwithstanding anything to the contrary in any other written law. This provision appears wide enough to include illegally obtained documents and privileged documents.

 

    iii.        Substituting the definition of “bank” with the definition of “financial institution”

 

Clause 2 of the MACCA Bill 2018 seeks to use the definition of “financial institution” as adopted in, among others, the Financial Services Act 2013, in place of the definition of “bank” presently used.

Pursuant to the proposed amendment, financial institution could now mean, among others, “a licensed bank, licensed insurer and investment bank under the Financial Services Act 2013 [Act 758]”, “a prescribed institution under the Development Financial Institutions Act 2002 Act 618]”, “a licensee under the Money Services Business Act 2011 [Act 731]” and “a person licensed or registered under the Capital Markets and Services Act 2007 [Act 671]”.

Conclusion

The most significant change brought about by the MACCA Bill 2018 is that a commercial organisation may be found to have committed an offence if any person associated with the commercial organisation gives or offers gratification to any person for business advantage.

It is important that commercial organisations place adequate procedures to prevent such practices and persons in the management of the commercial organisation are to ensure due diligence has been exercised to prevent the commission of the offence.

 

 

For further information, please contact:

 

Tan Chuan Yi, Shearn Delamore & Co​

chuanyi@shearndelamore.com