How Malaysia Compares

How Malaysia Compares: Corporate Bribery Laws in Singapore, Hong Kong, Australia and India

How Section 17A of the MACC Act measures up against its neighbours, and what it means for businesses operating across borders

Why Compare?

Malaysian businesses rarely stop at the border. Many trade with Singapore, source from India, raise funds in Hong Kong or bid for projects in Australia. When they do, the question is not only “What does Malaysian law say about bribery?” but also “What happens to my company under the law of the country where I am doing business?”

Section 17A of the Malaysian Anti-Corruption Commission Act 2009 (“MACC Act”) came into force on 1 June 2020 and was modelled on the UK Bribery Act 2010. This article looks at how four other common law jurisdictions, namely India, Australia, Hong Kong and Singapore, deal with companies whose people pay bribes, and how Malaysia measures up.

Malaysia: The Starting Point

Under Section 17A, a commercial organisation commits an offence if a person associated with it, such as a director, partner, employee or anyone performing services on its behalf, corruptly gives or offers a bribe to obtain or retain business, or a business advantage, for the organisation. The key features are:

• It covers both sectors. Like the UK Bribery Act 2010, Section 17A does not distinguish between bribing public officials and private commercial bribery.
• It is strict. The company can be liable even if its top management had no knowledge of the bribe.
• There is one defence. The company must prove that it had adequate procedures in place to prevent bribery.
• Directors are exposed. Directors, controllers, officers, partners and managers are deemed to have committed the same offence unless they prove they did not consent or connive and exercised due diligence.
• The penalty is heavy. A fine of at least ten times the value of the bribe or RM1 million, whichever is higher, or up to 20 years’ imprisonment, or both.
• It reaches abroad. Malaysian companies are covered wherever they do business, and foreign companies are covered if they carry on business in Malaysia.

India: A Close Cousin, but Only for Public Servants

India introduced corporate liability, together with an adequate procedures defence, through the Prevention of Corruption (Amendment) Act 2018, which came into force on 26 July 2018. Section 9 of the Prevention of Corruption Act 1988 is, like Section 17A, modelled on the UK Bribery Act 2010.

How it works

A commercial organisation is punishable with a fine if a person associated with it gives or promises an “undue advantage” to a public servant with the intention of obtaining or retaining business, or a business advantage, for the organisation. “Undue advantage” means any gratification other than legal remuneration, and it is not limited to money. As in Malaysia, the organisation has a defence if it proves it had adequate procedures in place.

Key differences from Malaysia

• Public servants only. The biggest difference is that India’s corporate offence covers only bribes to public servants. Private-to-private bribery is outside its scope. This reflects the focus of India’s law, which is aimed mainly at corruption involving public servants.
• Associations of persons. India’s definition of commercial organisation also includes an association of persons, a category not found in Section 17A or the UK Bribery Act 2010.
• Subsidiaries are expressly covered. India’s law states that the capacity in which a person performs services does not matter, whether as an employee, agent or subsidiary. This removes any doubt about whether a parent company can be liable for its subsidiary’s bribe. Section 17A does not say this expressly, which leaves some uncertainty in Malaysia.
• Employees are presumed to act for the company. If the person is an employee, it is presumed, unless proven otherwise, that he performed services for the organisation.

Like Malaysia, India also allows officers of the organisation to be held accountable for its offences. However, the book notes that at the time of writing, India’s Central Government had not yet issued guidelines on what adequate procedures should look like, unlike Malaysia’s Guidelines on Adequate Procedures.

Australia: The Company Must Have Authorised or Permitted It

At the federal level, bribery is dealt with by the Criminal Code Act 1995. It contains two main offences that apply to companies in the same way as to individuals:

• bribing a foreign public official, which means offering a benefit that is not legitimately due with the intention of influencing a foreign official to obtain or retain business or an advantage that is not legitimately due, and
• bribing a Commonwealth public official, which means dishonestly offering a benefit to influence an Australian federal official in the exercise of his duties.

Defences and reach

For the foreign bribery offence, a company has a defence if the conduct was lawful in the foreign official’s country, or if it was a facilitation payment that meets strict statutory conditions, including being of minor value, relating to routine government action and being properly recorded. If the offence happens wholly outside Australia, the company must be incorporated under Australian law for the offence to apply.

Heavy penalties

The maximum fine for a company is set by reference to three measures: 100,000 penalty units, three times the value of the benefit obtained where the court can determine it, or, where it cannot, 10 per cent of the company’s annual turnover over the relevant 12-month period. The same penalty applies to bribing a Commonwealth public official.

The big difference: proving the company’s fault

This is where Australia departs sharply from Malaysia. Under Australia’s general rules for corporate crime, the prosecution must prove both a physical element and a fault element against the company:

• The physical element is the bribery committed by an employee, agent or officer acting within the actual or apparent scope of his employment or authority.
• The fault element requires proof that the company expressly, tacitly or impliedly authorised or permitted the offence.

Authorisation or permission can be shown in several ways, including where the board or a high managerial agent carried out or authorised the conduct, where a corporate culture directed, encouraged or tolerated non-compliance, or where the company failed to create and maintain a culture requiring compliance. “Corporate culture” means an attitude, policy, rule, course of conduct or practice within the company generally or in the relevant part of it.

In Malaysia, the prosecution does not need to prove any such authorisation or permission. The company is liable as long as the bribe was paid by an associated person, and it is then up to the company to prove adequate procedures. At the time the book was written, there were no reported cases of a company being charged and convicted under Australia’s provisions.

Hong Kong: Companies Can Be Charged, but Rarely Are

Hong Kong’s main anti-corruption law is the Prevention of Bribery Ordinance (POBO), enforced by the Independent Commission Against Corruption (ICAC). It covers bribery in both the private and public sectors, although its main focus is bribery involving public officers.

The POBO has no express corporate liability provision. A company can still be prosecuted because the Interpretation and General Clauses Ordinance defines “person” to include any body of persons, corporate or unincorporate. In practice, however, the ICAC has concentrated on prosecuting individuals, and there is little information available on the criminal liability of companies under the POBO.

Singapore: No Special Regime, and Liability Depends on Who Acted

Singapore has consistently been seen as the least corrupt country in Southeast Asia. In 2021, it was ranked the fourth least corrupt country in the world, after Denmark, New Zealand and Finland. Its main anti-corruption law is the Prevention of Corruption Act 1960 (PCA).

Singapore has no specific corporate bribery offence like Section 17A. Companies can be liable because “person” under the PCA includes a company. The key question is when a company can be held responsible for what its people did. The Singapore courts answer this through the “living embodiment” test.

As these cases show, Singaporean prosecutions have typically targeted the individuals involved, even where the corrupt conduct benefited the company, and there is little reported material on companies being convicted for bribery. Singapore also has no adequate procedures defence. If a company is charged, it must show that one or more elements of the offence have not been proved.

Deferred prosecution agreements

In 2018, Singapore introduced deferred prosecution agreements (DPAs). Under a DPA, the Public Prosecutor agrees not to prosecute a company in exchange for it meeting certain conditions. The agreement must contain a charge or draft charge and a statement of facts, which may include an admission. The conditions may include:

• admitting the offence, paying a financial penalty, compensating victims and giving up profits,
• putting in place or improving a compliance programme,
• appointing a person to assess and monitor internal controls and report to the Public Prosecutor, and
• cooperating with investigations and paying the prosecution’s costs within a set time.

DPAs are available only to companies, limited liability partnerships, partnerships and unincorporated associations, not individuals. For corruption, they apply to offences under sections 5, 6, 10 and 12 of the PCA.

Side-by-Side Comparison

The table below summarises the key features discussed above, based on the position described in the book.

What Can Malaysia Learn?

1. Clarify the position of subsidiaries

India’s law, like the UK Bribery Act 2010, states expressly that a parent company can be implicated by the acts of its subsidiary. Section 17A does not. Making this explicit would reduce uncertainty for groups of companies operating in Malaysia.

2. The debate on deferred prosecution agreements

The UK Serious Fraud Office has concluded DPAs with many high-profile companies involving heavy penalties. If well run, DPAs can improve enforcement efficiency, save the time and cost of long trials, and encourage companies to come forward and cooperate. Malaysia chose not to adopt them when it introduced Section 17A. The concern is that DPAs may reduce the deterrent effect of the MACC Act if offenders can avoid prison. Whether Malaysia should follow Singapore on this remains an open policy question.

3. Culture matters everywhere

Australia’s focus on corporate culture, and Singapore’s decision in Prime Shipping, both show that how a company behaves before and after wrongdoing matters. This fits with Malaysia’s Guidelines on Adequate Procedures, which place top-level commitment at the heart of a compliance programme.

What This Means for Businesses Operating Across the Region

• Build to the highest standard. Malaysia’s Section 17A is among the strictest regimes discussed here. A programme that satisfies Malaysia’s adequate procedures requirements is likely to put a business in a strong position elsewhere as well.
• Do not rely on a lighter foreign regime. A Malaysian company that pays a bribe abroad can still be liable in Malaysia, even if the country where the bribe was paid would not prosecute the company.
• Watch your agents and subsidiaries. Under Malaysian law, a company can be liable for bribes paid by anyone performing services for it, and India expressly includes subsidiaries.
• Respond properly to red flags. As Prime Shipping shows, failing to investigate properly, keep records or take action against those involved can itself be held against the company.
• Directors should stay alert. In Malaysia, directors and managers can be deemed personally guilty unless they prove they did not consent or connive and took proper steps to prevent the offence.

Conclusion

Every jurisdiction in this comparison allows a company to be held responsible for bribery in some way, but the routes differ greatly. Hong Kong and Singapore rely on general principles and, in practice, focus mainly on individuals. Australia requires proof that the company authorised or permitted the wrongdoing. India, like Malaysia, has adopted the UK model of corporate liability with an adequate procedures defence, but only for bribes to public servants.

Malaysia’s Section 17A stands out for its breadth. It covers both public and private bribery, catches any associated person, deems senior people personally liable, and leaves the company with a single defence. For businesses operating in or from Malaysia, the practical message is simple: robust, genuine anti-corruption procedures are not optional. They are the best protection wherever you do business.

Cases Referred To

• Tom-Reck Security Services Pte Ltd v Public Prosecutor [2001] SGHC 32, [2001] 1 SLR(R) 327, [2001] 2 SLR 70 (Singapore High Court)
• Prime Shipping Corp v Public Prosecutor [2021] SGHC 71, [2021] 4 SLR 795 (Singapore High Court)
• Public Prosecutor v Howe Jee Tian [1998] 3 SLR(R) 587, [1999] 1 SLR 127 (Singapore High Court)

Legislation Referred To

• Malaysian Anti-Corruption Commission Act 2009 (Act 694), s 17A
• Prevention of Corruption Act 1988 (India), ss 9 and 10, as amended by the Prevention of Corruption (Amendment) Act 2018
• Criminal Code Act 1995 (Australia), Divisions 12, 70, 141 and 142
• Prevention of Bribery Ordinance (Cap 201) (Hong Kong)
• Prevention of Corruption Act 1960 (Singapore) and Criminal Procedure Code 2010 (Singapore), ss 149D and 149E(3), Sch 6
• Bribery Act 2010 (UK)