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Corporate Liability for Corruption under S.17A of the Malaysia Anti-Corruption Act 2009


April 2023

By Yap Yeong Hui


On 4 April 4 2018, the Malaysian Parliament passed the Malaysian Anti-Corruption Commission (Amendment) Bill 2018, which amends the Malaysian Anti-Corruption Act 2009 (“MACC Act”). Among other things, this bill introduced Section 17A which creates a new strict liability offence for failing to prevent bribery committed by persons associated with a commercial organisation. This provision is modelled after Section 7 of the UK Bribery Act 2010. Section 17A came into force on 1 June 2020.

What is the offence introduced?

If a “person associated with the commercial organisation” corruptly gives, agrees to give, promises or offers to any person gratification with the intent to secure business or an advantage for the commercial organisation, the commercial organisation is guilty of the offence. 

The penalties set out in Section 17A include a fine of at least ten times the value of the gratification (if it can be valued), or RM 1 million, whichever is greater, or a term of imprisonment of not more than 20 years, or both.

Who is a ‘person associated with the commercial organisation’?

Under Section 17A, a person is associated with a commercial organisation if he is the commercial organisation’s director, partner, employee or agent or he performs services for or on behalf of the commercial organisation.

The words “subsidiaries” and “joint venture partners,” which are explicitly mentioned in Section 7 of the UK Bribery Act 2010, are conspicuously absent from Section 17A’s definition of “person associated with the commercial organisation.” On the one hand, the purposeful omission of these words from Section 17A can be read as a sign that the Malaysian lawmakers wanted to exclude non-individuals from the new provision’s coverage. However, the word “person” is, defined by the Interpretation Acts of 1948 and 1967 to include all bodies of persons, corporate and incorporate.  In all likelihood therefore, a ‘person associated with the commercial organisation’ in Section 17A would include individuals as well as corporations.

Who is a ‘commercial organisation’?

The term ‘commercial organisation’ is defined widely under Section 17A as: 

  • A company incorporated under the Companies Act 2016 and carries on a business in Malaysia and elsewhere;
  • A company wherever incorporated and carries on a business or part of a business in Malaysia;
  • A partnership under the Partnership Act 1961 or a limited liability partnership under the Limited Liability Partnerships Act 2012 and which carries on a business in Malaysia or elsewhere; or
  • A partnership wherever formed and carries on a business in Malaysia or elsewhere.

The corporate liability provision implemented in Malaysia will have extra-territorial reach similar to the UK Bribery Act 2010 as it includes both locally incorporated companies and partnership as well as companies and partnerships incorporated overseas with business presence in Malaysia. What constitutes carrying on business in Malaysia is not defined. It is conceivable that a foreign entity using an agent to conduct business in Malaysia would be sufficient. Regarding local entities, it is possible that they might be held accountable for failing to stop bribery that took place outside of Malaysia, even if the crimes were carried out by its overseas agents.

What are the defences available to commercial organisations?

If the commercial organisation can demonstrate that it has ‘adequate procedures’ in place to stop those associated with the commercial organisation from committing the offence of corruption in relation to its business activities, that is the defence provided under the new Section 17A. Merely because the commercial organisation is not aware of the actions of the associated person is not a defence. 

The term ‘adequate procedures’ is not defined by the MACC Act. However, the Government has issued the Guidelines on Adequate Procedures under Section 17A(5).  The Guidelines provides 5 principles which can used as reference points when implementing policies, procedures and controls towards the goal of having adequate procedures as required by Section 17A.  The 5 principles (commonly referred to as the TRUST principles) are: 

  • Top Level Commitment 
  • Risk Assessment
  • Undertake Control Measures
  • Systematic Review, Monitoring and Enforcement 
  • Training & Communication

Training & Communication

Who is imputed with liability under Section 17A?

In a crucial way, the new Section 17A goes beyond Section 7 of the UK Bribery Act 2010. According to Section 17A(3), where an offence under the Section is committed by a commercial organisation, the director, controller, officer, partner and persons managing its affairs at the time of commission of the offence is also deemed guilty of the offence. Then, it will be up to these persons to prove the offence was committed without his consent or connivance and that he exercised due diligence to prevent the commission of the offence.

What must commercial organisations do?

As a result of Section 17A, a regular employee’s actions will have an effect on the employer that hired the employee as well as on the officers and senior management of the employer. The purpose of introducing the corporate liability offence is precisely for this reason. It will be more challenging for employers to avoid accountability by claiming that the corruption that their employees engaged in and from which they gained was not done so at their direction or was done without their knowledge.

Instead, employers will be required to have in place policies, procedures and processes aimed at preventing their employees from committing bribery offences.


With Section 17A, it has become vitally critical for businesses to make sure that there are policies in place to prevent bribery perpetrated by their employees, agents and others associated with the business. Liability can be imputed not only on the business but also its officers as well as managers. Since the provision came into force, it has reported that companies and individuals have been charged for contravening Section 17A. 

This material is for general information only and is not intended to provide legal advice. If you have any queries on matters related to the above, please feel free to contact us at