Section 17a MACC act 2009: Captains of industry are liable for corrupt practices of their employees

Section 17a MACC act 2009: Captains of industry are liable for corrupt practices of their employees

On 5th April 2018, the Malaysian Anti-Corruption Commission Act (“MACC Act”) was amended by including Section 17A to introduce a corporate liability provision for bribery and corruption. This new provision however was gazetted on 4 May 2018 but only came into force on 1 June 2020.

This will make a commercial organisation liable, among others, if its employees are found to be involved in corrupt practices. The introduction of Section 17A is an important step to curb corruption and bribery in the private sector.

The purpose of introducing this provision is to ensure that those in the position of the directing mind and will of commercial organisations take a serious view of corrupt practices within their organisation. This is to ensure that those who are corrupt do not get better chances of securing business opportunities over those who adhere to the law.

Prior to the passing of this provision, the MACC Act only focused on the prosecution of individuals who are involved in corruption practices. The new Section 17A is modelled from Section 7 of the UK Bribery Act 2010.

Under Section 17A(8) of the MACC Act, a commercial organisation is defined as either a company or partnership that is formed under Malaysian law or a company or partnership that carries on business or a part of a business in Malaysia.


New section 17A

4. The principal Act is amended by inserting after section 17 the following section:


Offence by commercial organisation

17A. (1) A commercial organisation commits an offence if a person associated with commercial organisation corruptly gives, agrees to give, promises or offers to any person any gratification whether for the benefit of that person or another person with intent – 

(A) to obtain or retain business for the commercial organization; or
(b) to obtain or retain an advantage in the conduct of business for the commercial organisation.


Accordingly, where an offence is committed by a commercial organisation, the commercial organisation’s director, controller, officer, partner or any member in the management of the commercial organisation’s affairs will be deemed to have committed the offence, unless it can be proven that the offence was committed without the person’s consent and that due diligence to prevent the commission of the offence was exercised.

What this means is that the burden of proof lies with the directors and the management to show that the offence was committed without their consent or connivance and that they had exercised due diligence to prevent the commission of the offence.

If convicted, the commercial organisation is liable to a maximum fine of ten times the sum of the gratification involved or RM 1 million, whichever is the higher; or to imprisonment of a term not exceeding 20 years, or both. This is stipulated in Section 17A (2) of the MACC Act.

Section 17A(4) of the MACC Act states that a commercial organisation shall be acquitted of a charge under Section 17A if it proves that it “had in place adequate procedures designed to prevent persons associated with the commercial organisation from undertaking such conduct.”



Anti-Bribery & Anti-Corruption Policy must be introduced to set out the responsibilities of those who work in an organisation in regards to observing and upholding a zero tolerance policy towards bribery and corruption.

As Section 17A of the MACC Act creates a strict liability offence for commercial organisations, commercial organisations must ensure the defence of having adequate procedures in place. Adequate procedures can be prepared, implemented and enforced effectively following the guidelines issued by the Prime Minister’s Office in December 2018 (“Guidelines”). The Guidelines were issued pursuant to Section 17A(5) of the MACC Act, which incorporated a similar approach to Section 9(1) of the UK Bribery Act 2010.

These Guidelines assist commercial organisations in understanding the concept, implementation and enforcement of the adequate procedures referred to in Section 17A(4) of the MACC Act. With reference to the Guidelines, a commercial organisation’s adequate procedures should be based on the principle of TRUST, which consists of the following:



The top-level management of the commercial organisation (“top-level management”) must ensure that the highest level of integrity and ethics is practiced in the commercial organisation. There should be full compliance with the applicable laws and regulatory requirements on anti-corruption, and key corruption risks of the organisation must be effectively managed.

The top-level management must provide assurance to its internal and external stakeholders that the organisation is operating in compliance with its policies and applicable regulatory requirements.

The top-level management must establish, maintain and periodically review an anticorruption compliance program and the communication of the organisation’s anticorruption policies and commitments internally and externally.

The top-level management must encourage the use of any reporting (whistleblowing) channel. The results of any audit, reviews of risk assessment, control measures and performance are reported to all top-level management, including the full Board of Directors, and acted upon.


Comprehensive risk assessments are advised to be conducted every three (3) years, with intermittent assessments to be conducted whenever necessary.

Risk assessment should be used to establish appropriate processes, systems and controls approved by the top-level management to mitigate specific corruption risks and/or potential corruption risks that the commercial organisation may be exposed to.


Appropriate controls and contingency measures, which are reasonable and proportionate to the nature and size of the commercial organisation, are advised to be implemented and enforced to address any corruption risks arising from weaknesses in the commercial organisation’s governance framework. The said controls and measures should include due
diligence and reporting channels. Policies and procedures should be endorsed by top-level management, which should be up-to-date and easily available.


The top-level management is advised to ensure regular reviews are conducted to assess the performance, efficiency and effectiveness of the anti-corruption programme of the commercial organisation and to ensure the anti-corruption programme is enforced effectively. Reviews may take the form of an internal audit or an external audit. Reviews should form the basis of any efforts to improve the existing anti-corruption controls in place
in the organisation.


Commercial organisations should develop and disseminate internal and external training and communications relevant to their anti-corruption management system, in proportion to their operations. The commercial organisation’s anti-corruption policy should be made publicly available and communicated appropriately to all personnel and business associates. When planning strategies for communicating the organisation’s position on
anti-corruption, the organisation should take into account:

• What key points should be communicated
• To whom they should be communicated
• How they will be communicated, and
• The timeframe for conducting the communication plan.

Employees and business associates should be provided with adequate training to ensure their thorough understanding of the organisation’s anti-corruption position, especially in regards to their role within or outside the commercial organisation.


Disclaimer: Please note that the contents above do not constitute legal advice. Should you require legal advice, please contact any of our lawyers as listed below:

If you have any queries, please contact our via e-mail, we are available for a scheduled conference call.

Messrs. Jeeva Partnership
V. Jeevaretnam (Managing Partner):
Charlotte Williams (Senior Associate):

TEL: 03-7932 3962

TEL: 04-263 1702

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