When tabling the amendments to the MACC Act, the then Deputy Minister in the Prime Minister’s Department, Datuk Seri Razali Ibrahim, explained that the new Section 17A will start to be enforced two years after the amendments are enacted. This is to ensure that there would be sufficient time for the commercial organisations affected by the amendments to adopt the necessary anti-corruption procedures.
However, during the parliamentary debates on the amendments to the MACC Act, the then opposition Member of Parliament (and current Deputy Minister of Primary Industries), Shamsul Iskandar bin Mohd. Akin, argued that:
“ … it would be reasonable for the government to consider implementing the amendments immediately after the amendments are passed. What is the rationale of the two years? This is because, to me, it is too long, I believe that any company out there would understand that corruption is not acceptable, and cannot be committed. Therefore, why is there an exemption? This means that there is a gap of two years given by the government in this amendment.”
Given the newly elected government’s focus on combatting corruption and its campaign promise to “reform the Malaysian Anti-Corruption Commission and strengthen anti-corruption efforts”, the new government may adopt a different timeline for the enforcement of the new Section 17A of the MACC Act. Commercial organisations affected by the new law should take immediate steps to implement an appropriate anti-corruption compliance program. Even though the Malaysian government has yet to issueguidelines on the adequate procedures defence, it is likely that such guidelines will be consistent with international best practice, such as the UK Ministry of Justice guidance about procedures which relevant commercial organisations can put into place to prevent persons associated with them from bribing and the ISO 37001 standard on anti-bribery management systems issued in 2016.
Directors and other senior personnel of companies with business operations in Malaysia would do well to take steps to ensure that robust anti-corruption policies and procedures that will withstand scrutiny are adopted and implemented throughout their respective organisations. Apart from forming the basis of an adequate procedures defence, such efforts can also evidence the due diligence steps expected of senior personnel.
This article was co-written with Ms Lim Koon Huan and Mr Kwan Will Sen of Malaysian law firm Skrine. We are grateful for their contribution.