INTEGRITY AND ANTI-

CORRUPTION COURSE
Kursus Integriti dan Antirasuah (KIAR)

NACP
2019-2023
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Module
CORPORATE LIABILITY
(Section 17A MACC Act 2009)

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CORRUPTION offence by
commercial organisations
Section 17A Malaysian Anti-Corruption
Commission Act 2009

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BACKGROUND

• A new provision in under the MACC Act 2009.

• Section 17A MACC Act 2009 - Offence by

commercial organisasion.

• Passed by Parliament on 5 April 2018.

• Enforced on 1 June 2020.

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FULFILLING INTERNATIONAL
OBLIGATION

1. United Nations Convention Against

Corruption (UNCAC)
Article 26 - Liability of legal persons

2. Trans-Pacific Partnership Agreement (TPP)

& Comprehensive and Progressive
Agreement for Trans-Pacific Partnership
Chapter 26 - Transparency & Anti-Corruption

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 Section 17A • To encourage businesses to be conducted
MACC Act 2009 with honesty and free from corruption.

• To encourage commercial organisations to

implement corruption prevention measures
in the organisation.

• To promote good governance and

OBJECTIVES compliance with anti-corruption laws.

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Other countries with this
provision
• United Kingdom - Section 7, UK Bribery Act 2010

• United State of America - The Foreign Corrupt Practices Act

1977

• Brazil - Federal Law No. 12, 846/2013

• Kanada - Criminal Code & Corruption of Foreign Public

Officials Act

• Australia - Criminal Code Act 1995

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CORPORATE LIABILITY

A company or commercial
organisation is punished for
allowing its officer or employee to
commit corruption to obtain a
project (or gain an advantage).

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 Section 17A MACC Act 2009
- Offence by commercial organisation -

(1) 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 whether for the
benefit of that person or another person with the intent -

(a) To obtain or retain business for the commercial organisation;

or

(a) To obtain or retain an advantage in the conduct of business for

the commercial organisation.
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To simplify, offence occurs when…

• Someone who is associated with the

commercial organisation

• Gives / agrees to give / promises / offers

gratification

• Purpose of gratification:
a. To obtain or retain business for the
commercial organisation; or
b. To obtain or retain an advantage in
conducting business for the commercial
organisation.
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Definition of
“commercial organisation”

Categories of organisations
that can be prosecuted
because of corruption.

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 Commercial organisation?

Organisations Businesses Businesses Overseas

incorporated registered under registered under companies /
under Partnership Act Limited Liability businesses
Companies Act 1961 Partnership Act conducting
2016 2012 business in
Malaysia
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Definition of
“someone associated with the
commercial organisation”
The individual’s corrupt act
can lead their organisation
to be prosecuted.
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Someone associated with the
commercial organisation?

• Director, partner or employee.

• Individuals carrying out duties on behalf

of the commercial organisation.

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 IF FOUND GUILTY…

FINE no less than 10 times

the value of gratification, or
RM1 million, whichever is
higher; OR
Both

IMPRISONMENT not
exceeding 20 years; OR
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 Example of a real case that
can be charged under Section
17A MACC Act 2009

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 • PUTRAJAYA, 20 December 2016 - Former Head
Former senior officer of Regional Customer Accounts, Alcatel Network
Systems (M) Sdn Bhd was sentenced to 6 months’
at Alcatel jailed imprisonment and a fine of RM125,000 after being
and fined for giving found guilty of corruption.

bribes • The accused gave a bribe of RM25,000 in the

form of an Alcatel Network Systems (M) Sdn. Bhd.
check to the Assistant Procurement Manager,
Telekom Malaysia Berhad.

• The purpose of the bribe was to obtain information

on the tender “for the supply of Wideband Code
Division Multiple Access (WDCMA) Mobile
Communication System and the Provision of
Works phase II”.

• The offence was committed at Shangri-La Hotel,

Jalan Sultan Ismail on 17 February 2006.
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 FIRST CASE
Section 17A MACC Act 2009

18 March 2021

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Pristine Offshore - the first company
was prosecuted for corruption
• SHAH ALAM, 18 March 2021 - An offshore vessel support
company, Pristine Offshore Sdn Bhd has become the first
company in Malaysia to be charged under Section 17A the
MACC Act 2009.

• The company was charged with one count of bribery involving

RM321,350 to ensure that it was awarded with a subcontract
from Petronas Carigali Sdn Bhd. Pristine Offshore's current
director Datuk Abdul Kamal Mohd Mydeen showed up on
behalf of the company
•
• The bribe was allegedly given to the COO of Deleum Primera
Sdn Bhd, as a reward to ensure Pristine Offshore was awarded
with the subcontract from Petronas Carigali.

• Along with the company, its former director Chew Ben Ben was
also charged with one count of bribery, framed under Section
16(b)(A) of the MACC Act 2009.
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If a commercial organisation is found
guilty, who can be punished?
(a) The commercial organisation itself

(b) The Director, someone who holds control (of

the commercial organisation), partner or
officer.

(c) Anyone involved in the management of the

commercial organisation.
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Unless… the individual proves:

1. The offence was committed without

his / her approval or involvement.

2. He / She has taken all appropriate

steps to prevent the offence from
being committed.

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AVOIDING
CORPORATE LIABILITY

• The commercial organisation charged in court must

prove that adequate procedures (efforts) to prevent
corruption have been implemented in the
organisation.

• Section 17A(5) MACC Act 2009 - The Minister issued

the Guidelines on Adequate Procedures to prevent
officers or employees from committing corruption.

• This guideline was issued and launched by the Prime

Minister on 10 December 2018.
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Principle
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T.R.U.S.T Top level commitment

• Tone from the top.

• Guarantee to stakeholders that the organisation will

fully comply with the laws and regulations in force.

• Monitor the organisation’s level of integrity and

governance.

• Allocate budget and human resources for corruption

prevention measures.
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T.R.U.S.T Risk assessment

• Conduct corruption risk and fraud rating in the

organisation.

• Suggested to be done every 3 years

• Improve weak systems and procedures.

• Involves external parties appointed by the

commercial organisation.

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 Undertake control
T.R.U.S.T measures

• Company policy on corruption

• Conduct due diligence
• Encourage reporting of corruption
• Conflict of interest
• Gifts and entertainment
• Contribution and sponsorship including political
contribution
• Facilitation payment

Important: Ensure that anti-corruption policies,

procedures and initiatives are documented.
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 Systematic review,
T.R.U.S.T monitoring & enforcement
• Continuous evaluation/improvement on:
- anti-corruption policies and procedures
- anti-corruption programmes
• Appoint competent individuals for internal audit on anti-
corruption initiatives.
• Appoint external audit to look at the compliance with anti-
corruption procedures - for example, ISO 37001.
• Monitor officers / employees.
• Take action on those involved in corruption and
misconduct.
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 Training &
T.R.U.S.T communication

SAY NO • Anti-corruption policy and procedure must be

to communicated.
corruption
• Training the workforce in corruption
prevention.

• Anti-corruption awareness programmes.

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Examples of international cases
related to corporate liability

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Sweett Group PLC
UK Bribery Act 2010

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Sweett Group PLC (Sweett), a construction and
professional services company based in the
United Kingdom.

Sweett became the first company convicted

under the UK Bribery Act 2010. UK Serious Fraud
Office (SFO) began its probes into Sweett around
June 2014.

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 SFO’s investigation
uncovered that its subsidiary
company, Cyril Sweett
International Limited had
made corrupt payments to a
senior officer of Al-Ain Ahlia
Insurance Company.

Bribe was intended to secure

the award of a consultation
contract for the building of the
Rotana Hotel in Abu Dhabi.

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 In December 2015, Sweett pleaded guilty to a
charge of failing to prevent an act of bribery in
compliance to Section 7(1)(b) of the Bribery Act
2010.

February 19, 2016, a landmark judgement was

passed at Southwark Crown Court. Sweett Group
PLC was ordered to pay a total £2.25 million
penalty for the offence. Additionally, £95,000 was
awarded to SFO.

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Standard Bank
UK Bribery Act 2010

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Standard Bank was investigated by the Serious
Fraud Office (SFO) when its subsidiary, Stanbic
Bank Tanzania was said to have paid a bribe of
USD6 million to a Tanzanian company, Enterprise
Growth Market Advisors (EGMA).
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 The bribe paid around March
2013 was to persuade a
Tanzanian government official to
take a loan of USD600 million
from Stanbic Bank. Thanks to the
loan, Stanbic Bank and Standard
Bank will share the fee charge
amounting to USD8.4 million.

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 On 30 November 2015, Standard
Bank agreed to pay a penalty of
USD$32.2 million through Deferred Standard Bank was the first
Prosecution Agreement (DPA). organisation that agreed to
enter into a DPA proceeding to
Standard Bank was also required to avoid prosecution under the
pay the cost of investigation and DPA UK Bribery Act 2010.
managed to the SFO costing
£330,000.

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 Investigation found that the
chairman of EGMA was also the
head of the government taxation
agency, which is the Tanzania
Revenue Authority. DRCHARANJITKAUR
The USD6 million deposited into
the EGMA account was withdrawn
in 4 cash transactions within 10
days.
Rolls-Royce
UK Bribery Act 2010

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 Rolls-Royce allegedly paid millions
of pounds to obtain civil engineering
and military contracts in several
countries.

The bribes were paid by a Rolls-

Royce officer or through a
middleman, from 1999 to 2013.

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 In January 2017, Rolls-Royce
announced that it had agreed
with regulators in the UK, US
and Brazil to pay £671m
(US$809m) in total penalties for
bribery and corruption.

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Although Rolls-Royce has been
penalized, it does not prevent individual
prosecutions

November 2017
• 3 former Rolls-Royce officers pleaded
guilty on corruption charges.

• An employee of the consultant company

acting for Rolls-Royce pleaded guilty on
corruption charges.

• A 'middle man' to Rolls-Royce was

prosecuted.

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Airbus
UK Bribery Act 2010

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 We make it fly

• Europe’s largest multinational aerospace operation.

• Airbus businesses comprise of commercial aircraft,
helicopters, security, defence, and space
exploration.
• As of 31 December 2017, Airbus delivered 10,926
aircrafts and around 12,000 helicopters.

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 Airbus bribery scandal:
3 countries join investigation

Since 2016, the French National

Financial Prosecutor's Office, United
Kingdom Serious Fraud Office (SFO)
and United States Department of Justice
(DoJ) had been jointly investigating fraud
and corruption in Airbus activities.

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 Highest
penalty paid
Late January 2020 - Airbus
agreed to pay a record of
USD4 billion in penalties after
admitting it had paid huge
bribes to obtain contracts in
20 countries.
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 • Airbus admitted to charges of FAILING
to prevent act of bribery.

• Airbus used a network of secret agents

to pay large-scale bribes to officials in
The President Airbus Commercial Aircraft Business,
Guillaume Faury speaks during press conference on
foreign countries to obtain high-value
3 February 2020
contracts.

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 • Among countries allegedly received
bribes from Airbus are Malaysia, Sri
Lanka, Indonesia, Taiwan and Ghana,
between 2011 to 2015.

• Others countries are China, Japan,

Russia, Kuwait, Brazil and Turkey.

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Skansen
Interiors Limited
UK Bribery Act 2010

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 Skansen is a small company that
carries out repair works. Skansen only
has 30 employees and has been
dormant since 2014.
Skansen was prosecuted when
its former Managing Director
bribed the former Project
Manager for DTZ Debenham Tie
Leung.

The bribe of £10,000 was to win

a contract to refurbish two offices
in London worth £6 million.

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Court conviction
On 21 February 2018, Southwark Crown Court
convicted Skansen with corruption under
Section 7 UK Bribery Act 2010.

The court found that Skansen failed to

implement adequate measures to prevent
corruption from happening.

Despite being convicted, the court did not

sentence any penalty on Skansen. This
decision was made as the company was
dormant and did not possess any asset.
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 Ironically, the bribery in
Skansen was reported by
Skansen’s new management.

In fact, Skansen’s
management gave full
cooperation to authorities
during the investigation
process.

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Siemens AG
The Foreign Corrupt Practices Act 1977

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Siemens fined
USD1.6 billion • Siemens is a one of the world’s
largest electrical engineering
companies.

• Alleged to have given bribes of

€1.3 billion to win bids for large
projects.

• December 2008 - Siemens

pleaded guilty. Siemens agreed
to pay $1.6 billion legal
settlement with American and
European authorities.
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Alcatel-Lucent
The Foreign Corrupt Practices Act 1977

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Fined USD137 million and
blacklisted by the Malaysian
Government
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Alcatel-Lucent was charged for bribing
government officials in Costa Rica,
Honduras, Taiwan and Malaysia, to
obtain and retain government contracts
worth millions of dollars.
On 28 December 2010, Alcatel Lucent
agreed to pay a penalty of USD137
million to settle the prosecution by
American authorities.
For the offence committed in Malaysia,
the company was blacklisted by the
government.
Alstom
The Foreign Corrupt Practices Act 1977

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Charged with using bribery to Alstom, international
obtain
countries.
contracts in several
generator company
November 2011 - a subsidiary of
fined USD42.7 million
Alstom in Switzerland agreed to
pay a fine of USD42.7 million to
Swiss authorities to settle the
bribery charges.

Two executives from Alstom were

also charged for bribing an
Indonesian public officer to obtain a
generator project in the country.

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