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New Era of Corporate Liability

under Malaysian Anti Bribery laws


By Chew Kherk Ying

30th November 2018


Agenda
1. Section17A on Corporate Liability
2. Rationale
3. Scope, penalties and defences
4. Examples of similar legislation in UK and
US
5. Protecting company, directors and
management from exposure to corporate
liability
6. Challenges ahead
7. Transparency in Corporate Reporting
8. Key takeaways
1 Overview of Section 17A on Corporate
Liability
Overview of Section 17A, MACCA 2009

Corporate Liability Provisions

• New Section 17A of Malaysian Anti-Corruption Commission Act 2009


(“MACCA 2009”) titled “Offence by commercial organization”

• Introduced via Section 4 of the Malaysian Anti-Corruption Commission


(Amendment) Act 2018 (“Amendment Act 2018”) which was gazetted on
4 May 2018

• Modelled after Sections 7 and 8 of the UK Bribery Act (“UKBA”) 2010

• Expected to come into force in 2020

© 2018 Wong & Partners 4


Overview of Section 17A, MACCA 2009

Significance of Section17A
• Introduce for the first time - a strict liability offence for commercial
organizations

• Management of the commercial orgaization is also deemed to have


committed the offence.

• Fine is 10 times the bribe or RM1,000,000, whichever is the higher, or


imprisonment not exceeding 20 years or both.

© 2018 Wong & Partners 5


2 Rationale
Rationale of Section 17A, MACCA 2009

Rationale

To foster growth of a business


environment that is free from
corruption

To encourage commercial
To combat a perception that
organizations of all industries
graft and bribery were
and sizes to take reasonable
acceptable business
and proportonate measures
practices in developing
to prevent corruption in their
countries, such as Malaysia.
organization.

© 2018 Wong & Partners


3 Scope of new corporate liability
Overview of Section 17A, MACCA 2009

Who may be liable?

© 2018 Wong & Partners 9


Scope of Section 17A, MACCA 2009

Who may be liable?

COMMERCIAL ORGANIZATION

A COMPANY A COMPANY A PARTNERSHIP


incorporated under wherever incorporated under the Partnership Act 1961 AND
Companies Act 2016 carries on a business in Malaysia or
AND elsewhere
AND carries on a business
carried on business in OR
or part of a business
Malaysia or elsewhere in Malaysia a limited liability partnership
registered under the Limited Liability
Partnerships Act 2012 AND carries on
a business in Malaysia or elsewhere
OR
wherever formed and carries on a
business or part of a business in
Malaysia

© 2018 Wong & Partners 10


Overview of Section 17A, MACCA 2009

How?

© 2018 Wong & Partners 11


Section 17A, MACCA 2009

How?

3 essential ingredients

with intent to either


a person
associated
with the who bribes or
company offer to bribe obtain an
advantage in the
obtain business
conduct of
for the company
business for the
company

© 2018 Wong & Partners 12


Overview of Section 17A, MACCA 2009

Who is the ‘person


associated’?

© 2018 Wong & Partners 13


Section 17A, MACCA 2009 - Ingredients of the Offence

A ‘Person Associated’
Defined under Section 17A(6) :-

A person is associated with a company if he is a:-

director or any Person who performs


organization Nominee or services for or on behalf
person who employee
where of the commercial
manages
company is a organization
affairs of the
partner or has
company controlling
S17A (7)-
interest in or To be determined by reference to
up to 30% ALL RELEVANT CIRCUMSTANCES,
issued shares not solely on the nature of the
relationship between him and the
VERY BROAD
commercial organization

© 2018 Wong & Partners 14


Section 17A, MACCA 2009 - Ingredients of the Offence

‘person associated’

• “persons” to cover all bodies of persons, corporate and incorporate

• Will cover subsidiaries, joint ventures, trust created by company or


where company contributed not less than 20% of total value of trust
assets
• contractors or suppliers performing services for a commercial
organization?

• Extra-territorial reach:-
• Foreign agent committing bribery outside Malaysia for locally
incorporated company
• Local agent committing bribery in Malaysia for foreign company
carrying on business in Malaysia

© 2018 Wong & Partners 15


Section 17A, MACCA 2009 - Ingredients of the Offence

‘person associated’

• What about contractors or suppliers performing services for a


commercial organization?

• UK guidelines:
• contractors could be ‘associated’ persons to the extent that they are
performing services for or on behalf of a commercial organisation.
• a supplier can properly be said to be performing services for a
commercial organisation rather than simply acting as the seller of
goods
• Where a supply chain involves several entities or a project is to be
performed by a prime contractor with a series of sub-contractors, an
organisation is likely to exercise control over its relationship with its
contractual counterparty

© 2018 Wong & Partners 16


Section 17A, MACCA 2009 - Ingredients of the Offence

Bribe given
• No requirement to show that bribe was actually given or received.

• Mere agreement, promise or offer to give gratification is sufficient.

• Section 17A is triggered when the associated person is a bribe-giver but


not when the associated person is a bribe-recipient.

• The gratification given by the associated person can be for either the
benefit of the recipient or any other person

© 2018 Wong & Partners 17


Section 17A, MACCA 2009 - Ingredients of the Offence

Intention of the Associated Person

• The act of bribery was done with the intention of either:-

OR

to obtain or retain obtain or retain an


advantage in the
business for the conduct of business for
company the company

© 2018 Wong & Partners 18


Once 3 ingredients found, company
will be liable

Who else will be liable?

© 2018 Wong & Partners 19


Scope of Section 17A, MACCA 2009

Parallel Personal Criminal Liability - S. 17A (3)

A Person
who, at the time when the commercial organization
commits the offence, is

director, controller, officer


or partner of the concerned in the
commercial organization management of its affairs

© 2018 Wong & Partners 20


It is deemed liability

© 2018 Wong & Partners 21


What are the defences
available?

© 2018 Wong & Partners 22


Section 17A, MACCA 2009

Statutory Defence for Corporate Liability

S. 17A (4)-

• put in place adequate procedures to prevent


the act of corruption

© 2018 Wong & Partners


Section 17A, MACCA 2009

Statutory Defence for Parallel Personal Liability

S. 17A (3)-

• proves that the offence was committed


without his consent or connivance and
that he exercised due diligence to prevent
the commission of the offence

© 2018 Wong & Partners


Section 17A, MACCA 2009

Penalties for Corporate Offence


A fine of not less than 10 times the sum /
value of bribe or RM 1 million (whichever
is higher)
or

S.17A(2) Imprisonment of term not exceeding 20


years
or

BOTH

© 2018 Wong & Partners 25


4 Corporate Liability Provisions in UK and
USA
Corporate liability provisions in the UK and the USA

US Foreign Corrupt Practices Act UK Bribery Act 2010


1977
Prohibit bribery of foreign public officials Prohibits bribery to any person
to obtain or retain business
Only covers the giving of bribe. Prohibits both active and passive
bribery.
Only vicarious liability for acts of Strict liability corporate offence for
employees or agents failure to prevent bribery by associated
persons
Defence if facilitation payments or Defence if there is adequate procedures
promotional expenses made were to prevent bribery
reasonable and bona fide business
expenses

© 2018 Wong & Partners 27


Corporate liability provisions in the UK and the USA

US Foreign Corrupt Practices Act UK Bribery Act 2010


1977
Apply to:- Apply to :-
(a) US persons and companies
(b) companies organized under US laws (a) Body incorporated under the law of
(c) companies that have their principal UK which carries on business in the
place of business in the US Uk or elsewhere
(d) companies listed on stock (b) a UK partnership which carries on
exchanges in the US business in the UK or elsewhere
(e) companies required to file periodic (c) Any other body corporate or
reports with the US Securities and partnership wherever incorporated
Exchange Commission (issuers) or formed which carries on business
(f) certain foreign persons and in any part of the UK
businesses acting while in the
territory of the US

© 2018 Wong & Partners 28


Comparison between S17A MACCA 2009 and SS7&8
UKBA 2010
• Section 17A, MACCA 2009 is modelled after the UK Bribery Act
UK Bribery Act S17, MACCA 2009

7. Failure of commercial 7. Offence by commercial organization


organisations to prevent bribery
A commercial organization commits an
(1) A relevant commercial offence if a person associated with the
organisation (“C”) is guilty of an commerical organization corruptly
offence under this section if a gives, agrees to give, promises or offers
person (“A”) associated with C to any person any gratification whether
bribes another person for the benefit of that person or another
intending— person with the intent
(a) to obtain or retain business for (a) to obtain or retain business for the
C, or commercial organization; or
(b) to obtain or retain an (b) to obtain or retain an advantage in
advantage in the conduct of the conduct of business for the
business for C. commercial organization “

© 2018 Wong & Partners 29


Comparison between S17A MACCA 2009 and SS7&8 UKBA 2010

Statutory Defence

UK Bribery Act S17, MACCA 2009


s. 7 (2) But it is a defence for C S. 17A (4) If a commercial organization
to prove that C had in place is charged for the offence referred to in
adequate procedures subsection (1), it is a defence for the
designed to prevent persons commercial organizaiton to provde that
associated with C from the commercial organization had in
undertaking such conduct. place adequate procedures designed
to prevent persons associated with
the commercial organization from
undertaking such conduct.

© 2018 Wong & Partners 30


Comparison between S17A MACCA 2009 and SS7&8 UKBA 2010

Meaning of Associated Persons


UK Bribery Act S17, MACCA 2009
S8. Meaning of associated person S7(6) For the purpose of this section,
(1) For the purposes of section 7, a person (“A”) is a person is associated with a
associated with C if (disregarding any bribe commercial organization if he is a
under consideration) A is a person who director, partner or an employee of
performs services for or on behalf of C. the commercial organization or he is
(2) The capacity in which A performs services for a person who performs services
or on behalf of C does not matter. for or on behalf of the commercial
(3) Accordingly A may (for example) be C's organization.
employee, agent or subsidiary.
(4) Whether or not A is a person who performs (7) The question whether or not a
services for or on behalf of C is to be person performs services for or on
determined by reference to all the relevant behalf of commercial organization
circumstances and not merely by reference shall be determined by reference
to the nature of the relationship between A to all the relevant circumstances
and C. and not merely by reference to the
(5) But if A is an employee of C, it is to be nature of the relationship between
presumed unless the contrary is shown that A him and the commercial
is a person who performs services for or on organization.
behalf of C.
© 2018 Wong & Partners 31
S17A MACCA is broader than S7 UKBA

• No comparative provision in the UKBA 2010 for a


deemed offence by directors and management
under Section 17A(3) of MACCA 2009.

© 2018 Wong & Partners 32


UK Prosecution under Section 7, UKBA

R v Sweett Group plc (2015)


• 1st prosecution for an offence of failure to prevent bribery.
• Salient facts:-
• Sweett’s foreign subsidiary in Cyprus secured a contract with an Abu Dhabi
company (AAIC) to build a hotel in UAE.
• Sweett then entered into a second contract with North Property Management
for associated “hospitality services”
• One of AAIC’s officer was the beneficial owner of NPM.
• Payments were made to NPM.
• No record of Sweett receiving any services
from NPM.

© 2018 Wong & Partners 33


UK Prosecution under Section 7, UKBA

R v Sweett Group plc (2015)

• Plead guilty - Sweett admitted to a failure to prevent bribery.


• Extra-territorial effect – actions of foreign subsidiary carried on outside
UK in relation to a UAE contract

Lessons learnt:-
• Prompt self-reporting – Sweett only reported payments a week after a WSJ
news article linked Sweett to Middle Eastern bribery.
• Stop the impugned conduct immediately and do not attempt to create
defence during investigation – Sweett tried to get a letter from AIAC to
suggest the payments were made under some fee arrangement and continued
to make the payments.
• Full cooperation – Sweett had refused to hand over accounts of witness
interviews and issued false public statement that it had given full co-
operation

© 2018 Wong & Partners 34


UK Prosecution under Section 7, UKBA

R v Skansen Interior Limited (2018)


Salient facts:

• Skansen was a refurbishment company with approximately 30 employees and


has been dormant since 2014.

• In 2013, Skansen won tenders for 2 office refurbishment contracts from a


company called DTZ, worth GBP 6 million in total.

• In 2016, Skansen appointed a new CEO. The new CEO initiated internal
investigation and realised that:-
 GBP 10,000 was given by Skansen’s former managing director to a
project manager at DTZ to gain the award of the contracts;
 a further GBP 29,000 was promised to the project Manager at DTZ upon
completion of the contracts.

© 2018 Wong & Partners 35


UK Enforcement of Section 7, UKBA
R v Skansen Interior Limited (2018)
• The new CEO reported to the UK authority and police.

• During trial, Skansen raised the “adequate procedures” defence on the basis
that:
1. substantial or sophisticated contol procedures are not necessary as the
company is small, and its business only operated locally
2. the company has a culture of honesty and integrity
3. the company has guidance on ethical dealings with third parties
4. the company has financial controls in place which required multiple
approvals
5. the related contracts contained clauses prohibiting bribery
6. the main person involved was specifically aware of the need to avoid
corrupt conduct.

© 2018 Wong & Partners 36


UK Enforcement of Section 7, UKBA

R v Skansen Interior Limited (2018)

© 2018 Wong & Partners 37


UK Enforcement of Section 7, UKBA
R v Skansen Interior Limited (2018)
• Skansen is CONVICTED.

• Sentencing: Absolute discharge with no financial penalty as the company was


dormant

• NOTE: UKBA 2010 does not imposes parallel personal liability on top-level
management but the personnels involved in the act of bribery are still found
guilty of an offence under Section 1 and Section 2 of the UKBA.

• Skansen’s Former Managing Director:- sentenced to 12 months’


imprisonment and disqualified as a director for six years
• DTZ’s Project Manager:- sentenced to 20 months’ imprisonment, disqualified
as a director for seven years and is subject to a confiscation order in the sum of
£10,697

© 2018 Wong & Partners 38


UK Enforcement of Section 7, UKBA

Other on-going investigations


Party involved Salient Facts

Standard Bank Plc [now • UK’s first Deferred Prosecution Agreement and use of section 7 in Bribery Act.
known as ICBC Standard
Bank Plc] • The charge related to a US $6m payment by a former sister company in
(2015) Tanzania to a Tanzanian firm which was owned by two senior Tanzanian
government officials.

• Serious Fraud Office investigation alleged the payment was an inducement in


relation to a proposal for a USD 600m private placement to be carried out on
behalf of Government of Tanzania.

• The bank eventually escaped prosecution in return for a financial penalty and
the promise that it will inform its anti-bribery rules and enforcement and not to
re-offend for three years.
XYZ Ltd
(2016) [UK SME Subject to an indictment alleging conspiracy to corrupt and conspiracy to bribe in
unnamed due to ongoing relation to contracts to supply its products to customers in a number of foreign
related legal proceedings] jurisdiction

Rolls Royce Plc


(2017) Allegations that bribes were paid to secure engine contracts in Indonesia, China and etc

© 2018 Wong & Partners 39


Protecting company, directors and
5 management from exposure to S17A
liability
Protecting company, directors and
management from exposure to S17A liability

What are
ADEQUATE PROCEDURES?

© 2018 Wong & Partners 41


Protecting company, directors and management from exposure to S17A liability

Adequate Procedures

Top-Level
Commitment

Training and
5 Key Risk Assessment
Communication
Elements

Systematic
Due
Review and
Diligence
Monitoring Source: Adapted from UK Ministry of
Justice Guidance

© 2018 Wong & Partners 42


Protecting company, directors and management from exposure to S17A liability

Element 1 : Top-Level Commitment

• Include board of directors, executives, owners, partners or


any other equivalent body or person concerned in the
Who? management

• Involvement of top-level management in determination of


corruption prevention procedures and in any key decision
What? making relating to corruption risk.

• Communication of the organization’s anti-corruption stance


• Approppriate degree of involvement in developing anti-
How? corruption procedures

© 2018 Wong & Partners 43


Element 1: Top-Level Commitment

Communication of Anti-Bribery Stance

© 2018 Wong & Partners 44


Protecting company, directors and management from exposure to S17A liability

Element 1: Top-Level Commitment

Appoint managers to lead, implement and manage anti-


Appoint
corruption policies and procedures

Leadership in awareness raising and a culture of transparent


Promote
dialogue throughout the organization

Engage with relevant associated persons and external bodies, such


Engage as sectoral organizations and the media to articulate the
organization’s policies.
Involvement in high profile and critical decision making where
Report appropriate; establish and maintain a direct reporting line between
the compliance officer and the board

General oversight of breaches of procedures and the provision


Feedback of feedback to the Board on periodic basis on levels of
compliance
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Protecting company, directors and management from exposure to S17A liability

Element 2: Risk Assessment

• Conduct periodic, informed and documented risk


assessments

• Procedures should be proportionate to the organization’s


size and structure, and to the nature scale and location of its
activities

© 2018 Wong & Partners 46


Protecting company, directors and management from exposure to S17A liability

Element 3: Control Measures


EXTERNAL DUE DILIGENCE ON PROSPECTIVE ASSOCIATED
PERSONS

• Associated persons may include subcontractors, consultants, agents,


business partners, suppliers and any entities or individuals who perform
services for and on behalf of the organization

• Higher-risk situation which may call for higher level of due diligence:-
• merger or acquisition;
• use of an intermediary to establish a business in foreign markets; or
• where local law requires the use of local agents to carry out the
busienss activities.

© 2018 Wong & Partners 47


Protecting company, directors and management from exposure to S17A liability

Element 3: Control Measures


INTERNAL DUE DILIGENCE ON PROSPECTIVE EMPLOYEES

• Organization may include appropriate level of due diligence in its


recruitment and human resource procedures

• Proportionate to the job positions, responsibilities and risks of abuse of


position

• May include:-
• direct request for details on background, expertise and business
experience of relevant individuals
• verification through research, credential and reference checking
• indirect investigation
© 2018 Wong & Partners 48
Protecting company, directors and management from exposure to S17A liability

Element 3: Control Measures


INTERNAL DUE DILIGENCE ON EXISTING EMPLOYEES AND
ASSOCIATED PERSONS

• Adequate financial and non-financial controls – separation of duties and


approving powers.

• Establish reporting channel for real or suspected corruption incidents or


inadequacies of anti-corruption processes.

© 2018 Wong & Partners 49


Protecting company, directors and management from exposure to S17A liability

Element 4: Communication and Training

• Enhance awareness and understanding of an organization’s anti-


corruption policies and procedures

• Provides the knowledge and skills to implement the procedures and deal
with corruption-related issues

• Policy

• Training

• Reporting channel

© 2018 Wong & Partners 50


Protecting company, directors and management from exposure to S17A liability

Element 4: Communication and Training


INTERNAL COMMUNICATION
Have in place clear information and guidelines on implementation of
anti-corruption policies and procedures which may include the following
areas:-
 anti-corruption policy
 business associates’ due diligence
 conflicts of interest
 gifts, entertainment, hospitality and travel
 facilitation payments
 donations and sponsorships

© 2018 Wong & Partners 51


Protecting company, directors and management from exposure to S17A liability

Element 4: Communication and Training


EXTERNAL COMMUNICATION

• Publish a statement or codes of conduct on corruption


prevention policies

© 2018 Wong & Partners 52


Protecting company, directors and management from exposure to S17A liability

Element 4: Communication and Training


TRAINING
• Periodic and consistent education and awareness raising:-
• corruption risks in general and in the particular sectors and areas in which
the organization operates
• ways to deal with corruption risks
• Mandatory general training for new employees or agents
• Tailored training for employees carrying out functions associated with
specific or higher risk of corruption, eg purchasing, contracting,
distribution and marketing
• Require or encourage associated persons to undergo anti-corruption
training

© 2018 Wong & Partners 53


Protecting company, directors and management from exposure to S17A liability

Element 5: Monitoring and Review


A robust compliance programe should include separate
MONITORING and AUDITING functions

Monitoring Auditing
• refers to the continuous • refers to a limited review which
commitment to review and targets a specific business
detect compliance issues in component, region or market
“real time” sector during a particular time
frame
• allows organisation to identify • upon identifying gaps, to conduct
and address gaps in program special audits on the operations
on a regular basis to further investigate the issues

© 2018 Wong & Partners 54


5 Challenges Ahead
Section 17A, Malaysian Anti-Corruption Comission Act 2009

Challenges Ahead
• Different sectors pose different levels and types of risk : Construction,
Property, Industry, Plantation and Infrastructure

• Broad range of “associated persons” which require different levels of risk


mitigation

• Extra-territorial reach of anti-corruption law

• Commitment, resources and ongoing


management of a range of risks associated
with corruption – legal, political and reputational

© 2018 Wong & Partners 56


Challenges Ahead

Case Study 1 – Joint Venture

• Company X is interested in a project.


• X proposes to enter into a joint venture with Company Y .
• It is proposed that X and Y would form a joint venture, XY for the project.
• However, X identifies the necessary interaction between XY / Y and
local public officials as a source of significant risks of corruption.

KEY QUESTIONS:-
• Is XY / Y considered an associated person of X?
• what are the adequate procedures which X should consider
in setting up the joint venture XY?

© 2018 Wong & Partners 57


Challenges Ahead

Case Study 1 – Joint Venture


What procedures should X consider to include in setting up XY?

• Incorporated XY / the JV contract must contain measures designed to


comply with all anti-corruption laws covering issues such as
• gifts and hospitality, agreed decision making rules, procurement, due
conduct of relations with public officials, training for staff in high risk
positions, record keeping and accounting
• Establish an audit committee with at least one representative of X and Y
that has the power to view accounts and certain expenditure and
prepare regular reports
• Insert contractual clause in the JV agreement between X and Y which
mandates compliance with all appllicable anti-corruption laws and the
breach is a material breach which could lead to terminaiton or other
similar significant consequences

© 2018 Wong & Partners 58


Challenges Ahead

Case Study 2 – Consultancy services


• Company X relies on independent consultants to facilitate business
opportunities and to assist in the preparation of submissions and tenders
in seeking new business.
• The consultants work on an arms-length-fee-plus-expense-basis.
• The consultants are engaged by the sales staff and selected because of
their extension network of business contacts and specialist informaiton.
• The reliance on consultants and difficulties in monitoring expenditure
which sometimes involve cash transactions has been identified as a
source of risk of corruption being undertaken on the company’s behalf.

Key Questions:-
• Is the consultant considered an associated person of X?
• what procedures should X consider in engaging the
consultant?

© 2018 Wong & Partners 59


Challenges Ahead

Case Study 2 – Consultancy services


Is the consultant considered an associated person of X?

• Yes, if the consultant has paid bribe while performing services for X with
intention of getting new business for X.
• same applies to principal-agent relationship

© 2018 Wong & Partners 60


Challenges Ahead

Case Study 2 – Consultancy services


What procedures should X consider taking to mitigate the risks?

• Conduct due diligence before engaging consultants, which could


include:-
• compile suitable questionnaire requiring eg. details of ownership, CVs and
references of the proposed individual performing the service, details of
directorship held and any relevant third party relationship;
• make enquiries with relevant authorities to verify the information received in
questionnaire;
• making enquiries through business contacts, chambers of commerce,
business associations or internet searches;
• follow up any business references and financial statements;
• request evidence of any potential consultant’s own anti-corruption policies,
reporting procedures and records;
• review due diligence enquiries on periodic basis.
© 2018 Wong & Partners 61
Challenges Ahead

Case Study 2 – Consultancy services


What procedures should X consider taking to mitigate the risks?

• Firm up the terms of the consultant’s contracts to:-


• reflect clear commitment to zero tolerance of corruption;
• set clear criteria for provision of bona fide hospitality on the company’s
behalf;
• clear statement of the precise nature of the services and the basis of
remuneration including expenses.
• making enquiries through business contacts, chambers of commerce,
business associations or internet searches;
• Make consultants’ contract subject to periodic review and renewal
• Draw up kep points guidance on anti-corruption for its sales staff and all
other staff involved in bidding for business and when engaging
consultants
© 2018 Wong & Partners 62
Challenges Ahead

Case Study 2 – Consultancy services


What procedures should X consider taking to mitigate the risks?

• Periodically emphasizing the anti-corruption policies and procedures at


meetings - eg. this might form a standing item on meeting agendas
every few months.

• Provide a confidential means of reporting for staff and external business


contacts on any suspicions of the use of corruption on the company’s
behalf.

© 2018 Wong & Partners 63


6 Transparency in Corporate
Reporting
Transparency in Corporate Reporting
Public Reporting on Anti-Corruption Programmes

• Publication of the elements of the organization’s anti-corruption policies


and procedures

• Benefits of public publication:-


• demonstrates its strong commitment to fighting corruption.
• postive impact on employees by strengthening the anti-corruption
attitude.
• contribute to positive change by focusing the attention on the
organization’s practices and drives improvements in policies and
programmes.
• increases its responsibility and accountability to stakeholders.

© 2018 Wong & Partners 65


Transparency in Corporate Reporting

Public Reporting on Anti-Corruption Programmes


Self-assessment checklist:-

 Does the company have a publicly stated commitment to anti-corruption?


 Does the company leadership (senior member of management or board)
demonstrate support for anti-corruption?
 Does the company’s code of conduct/anti-corruption policy explicitly apply to all
employees and directors?
 Does the company’s anti-corruption policy explicitly apply to persons who are
authorised to act on behalf of the company or represent it (eg. agents, advisors,
representatives or intermediaries)?
 Does the company’s anti-corruption programme apply to non-controlled persons
or entities that provide goods or services under contract (for example:
contractors, subcontractors, suppliers)?
 Does the company have in place an anti-corruption training programme for its
employees and directors?

© 2018 Wong & Partners 66


Transparency in Corporate Reporting

Public Reporting on Anti-Corruption Programmes


 Does the company have a policy on gifts, hospitality and expenses?
 Is there a policy that explicitly prohibits facilitation payments?
 Does the company provide a channel through which employees can report
suspected breaches of anti-corruption policies, and does the channel allow for
confidential and/or anonymous reporting (whistle-blowing)?
 Does the company carry out regular monitoring of its anti-corruption programme
to review the programme’s suitability, adequacy and effectiveness, and
implement improvements as appropriate?
 Does the company have a policy on political contributions that either prohibits
such contributions or if it does not, requires such contributions to be publicly
disclosed?

© 2018 Wong & Partners 67


Transparency in Corporate Reporting

Organizational transparency

• Complex networks of interconnected entities involving subsidiaries,


affiliates or joint ventures controlled to varying degrees by the parent
company.

• Benefits of disclosure:-
 remove opaque structure which may be used to hide proceeds of
corruption.
 allows local stakeholders to identify the entities which are operating
in the local jurisdictions, their relationship in the international network
of related entities.
 allows stakeholders to gain knowledge of financial flows among the
organization.
© 2018 Wong & Partners 68
Transparency in Corporate Reporting

Organizational Transparency

© 2018 Wong & Partners 69


Transparency in Corporate Reporting

Organizational Transparency
• Self-assessment checklist:-

Subsidiaries
 Does the company disclose all of its subsidiaries?
 Does the company disclose percentages owned in each of its subsidiaries?
 Does the company disclose countries of incorporation for each of its
subsidiaries?
 Does the company disclose countries of operations for each of its subsidiaries?

© 2018 Wong & Partners 70


7 Key takeaways
MACC Amendment Act 2018

Key Takeaways
• Need to put in place ‘adequate procedures’.

• Procedures must be regularly reviewed and strictly enforced.

• No more simple excuse - “ I don’t know” or “I am not aware”.

• Need to audit who may be ‘associated persons’ and implement


adequate procedures as well.

© 2018 Wong & Partners 72


Question & Answer
73
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