Anti-bribery Knowledge Essential for Business Operations in Malaysia
2019-01-29 15:38 Tuesday
Recently, Malaysia's fight against corruption has ushered in a new business and social climate. However, sceptics argue that much of the news surrounding high profile cases involving FELDA, the Tabung Haji Fund and other organizations are highly politicized and limited to the public sector. But there is no denying that a large part of the population believes that anti-corruption campaigns by the private sector are gaining momentum in emerging economies, and Malaysia is no exception.
Article 17A of Malaysian new Anti-Corruption Commission Act draws on the UK Bribery Act, which many international businesses are familiar with. Like the UK Act, it addresses corporate responsibility for corruption directly, but goes further than that. It directly implicates directors, controllers and management for a business group's corrupt practices, dramatically altering the burden of proof. In fact, the law goes beyond the scope of Singapore's anti-corruption laws and the scale of its penalties. The new law has been enacted and written into the statute book, but is expected to take effect in 2020 to give businesses enough time to prepare.
Once found guilty of bribery by a court, a business organization can be fined up to ten times the reward involved or 1 million ringgit (whichever is higher), responsible management jailed for up to 20 years, or both.
If the offence committed is a business organization, then the director, controller or senior manager is considered guilty unless the person can prove that the offence was committed without his consent or acquiescence and that he exercised due diligence to prevent the commission of bribery.
The new law shifts the burden of proof to directors, controllers and managers. As legal experts have noted, this is a huge shift, with executives already asking what they need to prove they have done due diligence to prevent corruption.