White-Collar Crime 2024 Comparisons

Legislation and Offences

The Penal Code (PC) is the primary legislation governing criminal offences and punishment in Malaysia, and is usually read together with the Criminal Procedure Code (CPC), which embodies the legal procedures in relation to such offences. Apart from the PC and the CPC, other legislation also contains penal or criminal provisions on specific areas of law.

The various offences under the PC may be broadly classified pursuant to the First Schedule of the CPC as follows.

Bailable and non-bailable offences

If an offence is bailable, the accused is entitled to bail as of right. For non-bailable offences, any grant of bail is at the discretion of the court. Certain offences (ie, security, drug and firearm offences) are unbailable in the sense that the accused cannot be released on bail and the courts have no discretion to grant bail.

Seizable and non-seizable offences

A seizable offence is an offence for which a police officer may arrest the accused without a warrant (generally applicable to offences that are punishable with imprisonment of three years or more). A non-seizable offence is an offence for which a police officer may not ordinarily arrest the accused without a warrant.

Compoundable and non-compoundable offences

Where an offence is compoundable, it is permissible for an accused to enter into an agreement with the victim to compensate the victim in exchange for forgiveness. Once the offence is compounded, it has the effect of an acquittal of the accused.

Generally, for a person to be guilty of an offence, it is necessary to prove beyond reasonable doubt that the accused has committed a wrongful act (actus reus) with a corresponding guilty state of mind (mens rea). However, there are instances where a failure to act may constitute the actus reus of an offence or where the commission of an offence carries strict liability such that no mens rea is required.

A person can be guilty of attempting to commit or to cause the commission of an offence, which is punishable under Section 511 of the PC by way of a fine or imprisonment, or both. Section 17(a) of the Malaysian Anti-Corruption Commission Act 2009 (MACCA) also expressly provides that even an attempt to accept or obtain any gratification constitutes an offence of bribery under the Act.

In all criminal proceedings, the burden is on the prosecution to prove the offence. The standard of proof to be satisfied is “beyond reasonable doubt”.

The defence is required to raise reasonable doubt in defence of the criminal charges.

That aside, there are certain statutory defences, such as under Section 17A of the MACCA, which provides that when an organisation is charged for a corporate offence of bribery, the organisation could defend itself by proving, on a balance of probabilities, that adequate procedures have been set in place to curb corrupt practices.

Section 50 of the MACCA sets out several presumptions applicable to particular offences. For instance, Section 50(1) of the MACCA provides for a presumption of corruption (which goes to the mens rea of the offender) where it has been proved that any gratification, by or to the accused, was:

• received or agreed to be received;
• accepted or agreed to be accepted;
• obtained or attempted to be obtained;
• solicited;
• given or agreed to be given;
• promised; or
• offered.

There is no limitation period for criminal offences in Malaysia. Criminal offences can be prosecuted regardless of effluxion of time.

The Malaysian courts have jurisdiction to deal with white-collar offences committed by citizens or permanent residents beyond the territorial limits of Malaysia in the same manner as if such offences were committed within Malaysia, pursuant to Sections 3 and 4 of the PC and other specific legislation, such as:

• Section 82 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA);
• Section 9 of the Computer Crimes Act 1997;
• Section 66 of the MACCA; and
• Section 3 of the Competition Act 2010 (CA 2010).

Although the powers of Malaysian law enforcement authorities do not extend beyond the territorial limits of Malaysia, such authorities may seek international assistance, through cross-border mutual assistance laws and extradition treaties, for bringing offenders situated outside Malaysia to justice.

Malaysia is a party to the United Nations Convention against Corruption, having become a signatory on 9 December 2003 and having ratified the Convention on 24 September 2008. Malaysia is also a party to the Treaty on Mutual Legal Assistance in Criminal Matters (Among Like-Minded ASEAN Member Countries) and several other bilateral treaties, including:

• the Treaty with the Government of Australia on Mutual Assistance in Criminal Matters, dated 28 December 2006;
• the Agreement with the Government of Hong Kong Special Administrative Region of the People’s Republic of China concerning Mutual Legal Assistance in Criminal Matters, dated 1 February 2008;
• the Treaty with the Government of the United States of America on Mutual Assistance in Criminal Matters, dated 1 January 2009;
• the Treaty with the Government of the United Kingdom of Great Britain and Northern Ireland on Mutual Assistance in Criminal Matters, dated 16 December 2011;
• the Treaty with the Government of the Republic of Korea on Mutual Assistance in Criminal Matters, dated 27 September 2013;
• the Treaty with the Government of the Republic of India on Mutual Assistance in Criminal Matters, dated 12 November 2012; and
• the Treaty with the Government of the People’s Republic of China on Mutual Legal Assistance in Criminal Matters, signed on 23 November 2015, and in force as of 19 February 2017.

Malaysian enforcement authorities further co-operate through different mechanisms and networks, including:

• the Financial Action Task Force;
• the Asia-Pacific Group on Money-Laundering;
• INTERPOL;
• ASEANAPOL; and
• the Egmont Group of Financial Intelligence Units.

In 2003, the Mutual Assistance in Criminal Matters Act 2002 came into force, highlighting Malaysia’s dedication to providing – and obtaining – international assistance in criminal matters.

Extradition is applicable to white-collar offences for countries where relevant arrangements have been made with Malaysia, as long as the offence is punishable under the laws of the foreign country or the laws of Malaysia with imprisonment for not less than one year or with death (Section 6 of the Extradition Act 1992). 

An attempt or a conspiracy to commit, or an abetment of the commission of, any above-described offence would also constitute an extradition offence.

Any company, association or body of persons may be subject to criminal liability and penal sanctions for white-collar offences under the PC and other written laws, such as:

• the MACCA;
• the AMLA;
• the CA 2010;
• the Capital Markets and Services Act 2007 (CMSA);
• the Companies Act 2016 (CA 2016); and
• the Income Tax Act 1967 (ITA).

Individuals responsible for the management of any of the affairs of the corporation, or who were assisting in such management (including directors, partners, the chief executive officer, the chief operating officer, managers and secretaries) may also be held either jointly or severally liable for white-collar offences committed by the corporation under Section 130T PC and/or specific legislation, such as:

• Section 17A of the MACCA;
• Section 87 of the AMLA;
• Section 540 of the CA 2016; and
• Section 367 of the CMSA.

Most of these legal frameworks do, however, afford a statutory defence to such individuals whereby they may claim innocence if the corporation’s offence was carried out without the consent or connivance of such individuals, and if they exercised due diligence within their capacity to prevent the commission of the offence.

Successors of a corporation may also be held liable for offences committed by the target entity that occurred prior to the merger or acquisition. Section 104 of the Financial Services Act 2013 provides that the rights and liabilities of the target entity may be transferred to the successor entity, including those rights or liabilities in respect of any legal proceedings or applications to any authority pending immediately before the transfer date by or against the target entity.

Before the judge delivers the sentence, the prosecution and defence will both have the opportunity to present the aggravating and mitigating factors to be considered. Once the judge has taken into account the submissions from both sides, the sentence will be delivered accordingly.

The rules or guidelines for sentencing are to be distilled from previous decisions of the court. The following factors are routinely taken into account in meting out appropriate sentences:

• whether the convicted person is a first offender;
• whether the convicted person had pleaded guilty, thereby saving the court’s time;
• the convicted person’s age and gender;
• whether the offence was aggravated by physical harm or loss; and
• the extent to which the offence affected the victim (victim’s impact statement).

Although the courts are required to look at sentences imposed for similar offences before delivering their own to ensure uniformity, each case will be assessed on its own facts. The courts are generally inclined towards imposing heavy, if not maximum, penalties or sentences for white-collar crimes involving an abuse of position of trust or authority. This is because such an offence goes against public interest, and to quote Mohamed Zaini Mazlan J in Public Prosecutor v Rosmah bt Mansor [2022] 11 MLJ 801: “The sentence must reflect society’s disapproval or revulsion of the crime. The sentence must also reflect the gravity of the offence committed. It should also serve as a deterrent to the accused and others from committing a crime of this nature.”

Where there is a plea agreement, a reduction ranging from one-quarter to one-third of the sentence will normally be granted by the courts (depending on the gravity and severity of the offence). The rationale for this principle was explained by Visu Sinnadurai J in Public Prosecutor v Ravindran and Others [1993] 1 MLJ 45, where His Lordship opined as follows: “The rationale for this rule is that much public time and money will be spared if an accused admits his guilt, thus avoiding a prolonged and unnecessary trial”. However, it must be noted that this approach is subject to the court’s discretion, and is not as of right.

Victims of white-collar offences may seek compensation for their sustained losses through the following means.

Civil Claim

Victims of white-collar offences may seek compensation from the individuals or entities responsible for their losses by initiating a civil action in the courts. The victims will need to show, on a balance of probabilities, that the constituents of the predicate offence have been made out against the individuals or entities, resulting in the losses claimed.

Although it is possible for victims of white-collar offences to initiate representative actions against perpetrators of such offences, this avenue is not often resorted to, possibly due to the strict procedural requirements applicable to representative actions – ie, the plaintiffs must:

• have the same interest;
• be members of the same class;
• have a common grievance; and
• apply for relief beneficial to all members.

Restitution Order Through Criminal Prosecution

Pursuant to Section 426 of the CPC, the Malaysian courts can at their discretion order the individual or entity convicted of a white-collar offence to pay a monetary compensation as restitution to the victim(s) upon application by the Public Prosecutor.

Insurance Claims

It is commonplace in Malaysia for victims of white-collar offences (particularly corporations) to safeguard themselves against potential risk by actively seeking coverage specifically designed to mitigate the financial impact of such offences.

Recovery Actions by Regulatory and Enforcement Authorities

Certain regulatory and enforcement authorities have the discretionary power to obtain compensation for the victims of white-collar offences. For example, in relation to insider trading offences committed under the CMSA where monies are recovered from the offenders, the Securities Commission is required under Section 201(7) to distribute such monies to the victims who either acquired or disposed of securities of the same class on the stock market of the stock exchange when the first contravention occurred.

White-collar offences may be investigated by the Royal Malaysia Police (RMP) and by regulatory and enforcement authorities, such as:

• the Malaysian Anti-Corruption Commission (MACC) for bribery and corruption-related offences;
• the Securities Commission Malaysia (SC) for offences relating to securities and derivative markets;
• the Companies Commission Malaysia (CCM) for offences relating to non-compliance of rules of corporate governance, corporate misconduct or fraud;
• the Malaysia Competition Commission (MyCC) for offences relating to anti-competitive conduct;
• Bank Negara Malaysia (BNM) for offences relating to financial laws, including money laundering; and
• the Inland Revenue Board (IRB) for tax-related offences.

However, white-collar offences can only be prosecuted with the consent of the Attorney General of Malaysia, who serves as the Public Prosecutor. This prevents any conflict of jurisdiction between the prosecutors and the regulatory and enforcement authorities, who are also conferred with powers of prosecution.

In response to rising challenges posed by corruption and cybercrime, Malaysia has taken proactive measures in establishing specialised courts designed to address the complexity of these offences.

In Malaysia, investigations into white-collar offences may be initiated through diverse channels, including the following.

Reports and Complaints

White-collar investigations are primarily initiated based on complaints and reports filed by individuals, organisations or whistle-blowers with relevant law enforcement agencies, regulatory bodies or specialised units. For example, in relation to bribery and corruption offences, the MACC’s powers of investigation are only triggered following a report made under Section 29 of the MACCA.

Pursuant to the AMLA and regulations, reporting institutions such as banks and financial institutions are required to report suspicious transactions and activities which would trigger investigations by the regulators and law enforcement agencies.

Investigative Powers of the RMP

When there are sufficient reasonable grounds to suspect criminal misconduct, the RMP has the authority to independently commence investigations. Collaboration with other agencies is a common practice.

Investigative Powers of Regulatory and Enforcement Bodies

Various regulatory and enforcement bodies in Malaysia oversee specific industries and sectors. For instance, the SC regulates the capital markets, including stock exchanges. It can initiate investigations into white-collar offences within its domain.

Under the CA 2016, the investigation of a company’s affairs is at the direction of the Minister for Domestic Trade, Co-operatives and Consumerism, either by its own motion or on the application of members or debenture holders of the company.

The RMP and other regulatory and enforcement authorities are conferred with wide powers under Malaysian laws to investigate white-collar offences – for instance, as follows.

Section 51 of the CPC empowers the police to deliver a summons or a written order to a person (including a company), in whose possession or power the property or document necessary or desirable for the purposes of any investigation is, for this to be produced. Should any person in whose possession or power such property or document is refuse to comply, the court may then issue a search warrant pursuant to Section 54 of the CPC to allow the police to search the person’s premises for the document or property.

Pursuant to Section 127 of the Securities Commission Act 1993, an officer of the SC, carrying out an examination of a person, is entitled to access all books, documents, accounts, documents of title to its assets, all securities held by it in respect of securities transactions and any other information and facilities that may be required. The Securities Commission Act 1993 also provides that electronic records may be seized and accessed (Sections 2G and 2H).

Under Section 30 of the MACCA, an investigating officer of the MACC may also direct a person to produce any book, document, record, account or computerised data or any other article that, in their opinion, may assist in the investigation. The person may also be ordered to attend before the investigating officer and be examined orally in relation to the matter. Alternatively, the person may be directed to furnish a written statement made on oath or an affirmation providing information which would assist the investigation.

In SPRM v Muhhammad Haizatt Fitri Bin Wahab and Five Others (Criminal Appeal No C-06A-7-05/2023), the Court of Appeal recently clarified that the MACC may rely on and invoke the investigative powers under the MACCA and/or the PC/CPC, thereby implicitly overruling an earlier decision of the High Court declaring the exercise of the MACC’s powers of remand under the CPC to be invalid. 

Although the existing legislation in Malaysia does not impose a mandatory obligation on companies to conduct internal investigations, it is highly recommended for companies that are under investigation to initiate their own inquiries into instances of misconduct. This proactive approach enables them to effectively address inquiries raised by law enforcement agencies and to make efforts to resolve the matter at hand. Furthermore, conducting internal investigations serves as a preventative measure, helping to deter any potential recurrence of such misconduct within the company. Any internal investigation carried out or conducted in contemplation of litigation by the company is, in any event, cloaked with privilege.

Article 145(3) of the Federal Constitution provides that the Attorney General has discretionary power to commence, conduct or discontinue proceedings for any offence. Further, Section 376(1) of the CPC designates the Attorney General as the Public Prosecutor to control and direct all proceedings under the CPC.

Additionally, enforcement authorities and regulatory bodies – such as the Commercial Crime Investigation Department, MACC, SC, Companies Commission of Malaysia, Central Bank of Malaysia (BNM), and Malaysian Competition Commission – also have the discretionary power to prosecute specific white-collar offences within their respective areas of jurisdiction.

The Public Prosecutor’s exercise of prosecutorial powers and discretion is not governed by any written law. That said, the Public Prosecutor’s exercise of prosecutorial powers and discretion is not unfettered, in that the prosecutorial powers and discretion must be exercised constitutionally and not be exercised in bad faith for extraneous purposes.

Malaysia currently does not have in place any legislative provisions in relation to deferred prosecution agreements or non-prosecution agreements.

Fraudulently Inducing Persons to Invest Monies/Deal in Securities

Section 594 of the CA 2016 and Section 178 of the CMSA prohibit a person from inducing, or attempting to induce, another person to enter into or offer to enter into any agreement with a view to acquiring, disposing of, subscribing in or underwriting securities or lending or depositing monies to or with any corporation, or to securing a profit from the yield or fluctuations of marketable securities by intentionally:

• making or publishing any statement, promise or forecast that the maker knows to be misleading, false or deceptive;
• dishonestly concealing facts; or
• recklessly making or publishing, dishonestly or otherwise, any statement of promise or forecast that is misleading, false or deceptive.

The offence carries a maximum punishment of imprisonment not exceeding ten years and a fine of up to MYR3 million.

Fraudulent Trading

For a company being placed in liquidation or for proceedings being brought against the company, if it appears that the company has carried on its business with the intent to defraud creditors, Section 540 of the CA 2016 allows the court to lift the corporate veil and hold any person responsible for the fraudulent trading of the company and personally liable to the creditors for any debts or other liabilities incurred by the company as a result thereof.

To establish the “intent to defraud” creditors, the element of dishonesty is an essential ingredient that must be ascertained from a consideration of the entirety of the facts of the case. The creditor is only required to prove the offence under Section 540 on a balance of probabilities.

False and Misleading Statements

It is an offence under Section 591 of the CA 2016 for any corporation to advertise, circulate or publish any return, report, certificate, financial statement or other document regarding the affairs of the company, or to authorise the making thereof, knowing it to be false or misleading. To establish the offence, it is necessary to prove that the making of the false or misleading statement was done intentionally. Upon conviction, the corporation may be liable for a fine not exceeding MYR3 million. Any clerk, officer, or employee of a company can also be held personally liable for such offence and, if convicted, may be punished with imprisonment for a term not exceeding ten years or a fine not exceeding MYR3 million, or both.

Under the MACCA, a distinction is not made between bribes paid to a public official and those paid to private individuals. However, the MACCA does provide for additional offences of bribery in relation to public officials.

Section 16 provides for the offence of accepting gratification and the constituent elements giving rise to the offence – ie, whereby a person who by themself or in conjunction with any other person corruptly solicits or receives, or agrees to receive (for themself or for any other person) or corruptly gives, promises or offers to any person, whether for the benefit of that person or of another person, any gratification as an inducement to or a reward for, or otherwise on account of, any person or any officer of a public body doing or forbearing to do anything in respect of any matter or transaction, actual or proposed or likely to take place, in which the public body is concerned.

Section 17 provides for the offence of giving or accepting gratification by an agent – ie, whereby a person corruptly accepts, obtains or agrees to (from any person, for themself or for any other person) any gratification as an inducement or a reward, or corruptly gives, agrees to give or offers any gratification to any agent as an inducement or a reward, for doing or forbearing to do, or for having done or forborne to do, any act in relation to their principal’s affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to their principal’s affairs or business.

Section 18 provides for the offence of intending to deceive the principal by agent – ie, whereby a person commits the offence if they give to an agent, or being an agent they use with intent to deceive their principal, any receipt, account or other document in respect of which the principal is interested, and which they have reason to believe contains any statement which is false, erroneous or defective in any material particular and is intended to mislead the principal.

Section 20 provides for the offence of corruptly procuring withdrawal of tender – ie, for a person who, with intent to obtain from any public body a contract for performing any work, providing any service, doing anything, or supplying any article, material or substance, offers any gratification to any person who has made a tender for the contract, as an inducement or a reward for their withdrawing the tender, or who solicits or accepts any gratification as an inducement or a reward for their withdrawing a tender made by them for such contract.

Sections 21 and 22 are specific offences for an individual who solicits, accepts or offers gratification to an officer of a public body or a foreign public official, respectively.

The penalties are clearly stipulated under Section 24, whereby any person who commits an offence under Sections 16, 17, 20, 21, 22 and 23 shall on conviction be liable to imprisonment for a term not exceeding 20 years and to a fine of not less than five times the sum or value of the gratification, where such gratification is capable of being valued or is of a pecuniary nature, or to MYR10,000, whichever is higher.

In this regard, an “officer of a public body” is defined in Section 3 of the MACCA as any person who is a member, officer, employee or servant of a public body, and includes:

• a member of the administration;
• a member of Parliament;
• a member of a State Legislative Assembly;
• a judge of the High Court, Court of Appeal or Federal Court; and
• any person receiving any remuneration from public funds.

Where the public body is a corporation sole, this includes the person who is incorporated as such.

A “foreign public official” is defined in the same section as:

• any person who holds a legislative, executive, administrative or judicial office of a foreign country, whether appointed or elected;
• any person who exercises a public function for a foreign country, including a person employed by a board, commission, corporation or other body or authority that is established to perform a duty or function on behalf of the foreign country; and
• any person who is authorised by a public international organisation to act on behalf of that organisation.

The Malaysian government has issued the Guidelines on Adequate Procedures, which aim at educating companies on systems and protocols that prevent the occurrence of corrupt practices. There remain no hard law or statutory provisions obligating companies to implement the Guidelines, and, therefore, no criminal, civil or administrative liability on the companies for failure of implementation. Nevertheless, such implementation contributes as a defence of “adequate procedures” afforded to corporations against an offence under Section 17A of the MACCA.

The main facets of said Guidelines involve the company:

• displaying top-level commitment;
• conducting a comprehensive risk assessment;
• undertaking reasonable and proportionate control measures;
• ensuring systematic review, monitoring and enforcement efforts; and
• conducting adequate training and communication.

The CMSA provides for a range of offences typically associated with financial market abuse, including the following.

False Trading and Market-Rigging Transactions

Section 175 CMSA prohibits any person from creating a false or misleading appearance of active trading in any securities on a stock market within Malaysia, or a false or misleading appearance with respect to the market for, or the price of, any such securities.

Stock Market Manipulation

Section 176 CMSA prohibits any person from entering into transactions that have or are likely to have the effect of raising, lowering, pegging, fixing, maintaining or stabilising the price of securities for purposes that may include inducing others to acquire or dispose of the securities of the corporation or related corporation.

False or Misleading Statements in Relation to Securities

Section 177 CMSA prohibits the making of a statement or dissemination of information that is false or misleading and is likely to induce the sale or purchase of securities by the other person with the effect of raising, lowering, maintaining or stabilising the market price of securities, regardless of the state of mind of the maker as to the truth of the statement.

Use of Manipulative and Deceptive Devices

In connection with the sale and purchase of securities, Section 179 CMSA prohibits a person (whether directly or indirectly) from:

• using any device, scheme or artifice to defraud;
• engaging in any act, practice or course of business that operates or will operate as fraud or deceit; and
• making any statement that is untrue.

Dissemination of Information About Illegal Transactions

Section 181 CMSA prohibits the circulation or dissemination of a statement or information that indicates that a transaction will affect the price of the securities if that person has entered into the transaction.

Insider Trading

An “insider” is defined under Section 188 CMSA as a person who:

• possesses information that is not generally available, which, on becoming generally available, a reasonable person would expect to have a material effect on the price or the value of securities; and
• knows or ought to reasonably know that the information is not generally available.

It is an offence for the insider, whether as principal or agent, to acquire or dispose of securities or to enter into any such agreement in respect thereof.

Pursuant to Section 182 CMSA, a person who contravenes Sections 175, 176, 177, 178 or 181 could be imprisoned for a term not exceeding ten years and subject to a fine of not less than MYR1 million.

A person who contravenes Section 188 CMSA may be punished on conviction with imprisonment for a term not exceeding ten years and with a fine of not less than MYR1 million. A civil action may also be initiated by the SC for insider trading breaches. The court may also impose a civil penalty of up to MYR1 million depending on the seriousness of the offence.

There is no express provision under the ITA which provides for criminal liability stemming from a “tax fraud offence”. However, Section 114 of the ITA provides for an offence of wilful evasion, which involves any person who wilfully and with intent to evade or assist any other person in evading tax:

• omits from a return made under the ITA any income which should be included;
• makes a false statement or entry in a return made under the ITA;
• gives a false answer (orally or in writing) to a question asked or request for information made in pursuance of the ITA;
• prepares, maintains or authorises the preparation or maintenance of false books of account or other false records;
• falsifies or authorises the falsification of books of account or other records; or
• makes use of or authorises the use of any fraud, artifice or contrivance.

Any person guilty of wilful evasion shall, on conviction, be liable to a fine of not less than MYR1,000 and not more than MYR20,000 or to imprisonment for a term not exceeding three years, or to both, and shall pay a special penalty of treble the amount of tax which has been undercharged.

Furthermore, any person who assists in, or advises with respect to, the preparation of any return where the return results in an understatement of the liability for tax of another person shall, unless they satisfy the court that the assistance or advice was given with reasonable care, be guilty of an offence punishable by a fine of not less than MYR2,000 and not more than MYR20,000 or to imprisonment for a term not exceeding three years, or to both.

Regarding financial record-keeping, the AMLA imposes anti-money laundering requirements on financial institutions and other businesses. Institutions, businesses and professions that are subject to these requirements are known as “reporting institutions” under the AMLA.

The AMLA imposes the following obligations on the reporting institutions:

• to conduct customer due diligence (CDD) and risk assessments;
• to report suspicious transactions to BNM;
• to maintain and retain records of transactions;
• to implement an AML compliance programme that is reflective of the reporting institution’s money laundering risk exposure and its size, nature and complexity; and
• for selected reporting institutions only, to submit a cash threshold report (CTR) to BNM for cash transactions in the amount of MYR25,000 and above.

Non-compliance with any record-keeping requirement (Section 13), obligation to submit suspicious transaction reports to BNM (Section 14) and obligation to conduct CDD (Section 16) attracts a fine of up to MYR1 million or imprisonment for up to three years, or both. Additionally, if a reporting institution fails to retain documents for at least six years, it will be in breach of Section 17, and a fine of up to MYR3 million or imprisonment for up to five years, or both, may be imposed on such entity.

Part II of the CA 2010 prohibits anti-competitive practices, particularly anti-competitive agreements between enterprises (Chapter 1 CA 2010 prohibition) and abuse of dominant position by an enterprise (Chapter 2 CA 2010 prohibition), which are explained in further detail below.

Anti-competitive Agreements

Pursuant to Section 4 CA 2010, the following applies.

A horizontal or vertical agreement between enterprises is prohibited in so far as the agreement has the object or effect of significantly preventing, restricting or distorting competition in any market for goods or services.

• Horizontal agreements are deemed to have the object of significantly preventing, restricting or distorting competition in any market for goods or services when they have the object of:
1. fixing prices or trading conditions;
2. sharing market or sources of supply;
3. limiting or controlling production or market access; or
4. performing the act of bid rigging. 

MyCC’s Guidelines on Chapter 1 Prohibitions provide that once an anti-competitive “object” is shown, the MyCC does not need to examine the anti-competitive effect of the agreement.

Notwithstanding Section 4 CA 2010, an enterprise may seek relief of liability pursuant to Section 5 CA 2010 if:

• there are significant identifiable technological, efficiency or social benefits directly arising from the agreement;
• the benefits could not reasonably have been provided by the parties to the agreement without the agreement having the effect of preventing, restricting or distorting competition;
• the detrimental effect of the agreement on competition is proportionate to the benefits provided; and
• the agreement does not allow the enterprise concerned to eliminate competition completely in respect of a substantial part of the goods or services.

Abuse of Dominant Position

Under Section 10 of the CA 2010, the following applies.

• An enterprise is prohibited from engaging, whether independently or collectively, in any conduct that amounts to an abuse of a dominant position in any market for goods or services (Section 10(1) CA 2010).
• Without prejudice to the generality of Section 10(1) CA 2010, Section 10(2) CA 2010 sets out that abuse of dominant position may include, directly or indirectly:
1. imposing unfair purchase or selling prices;
2. limiting control or supply of production;
3. applying different trading conditions to equivalent transactions; and
4. predatory behaviour towards competitors.

A market share of 60% is indicative of dominance. However, MyCC will also look at other factors such as the enterprise’s ability to act without concern for its competitor’s responses. Mere dominance on its own does not constitute an infringement; the dominance must be accompanied by abuse.

Pursuant to Section 40 CA 2010, if MyCC determines that there is an infringement of a prohibition under Part II of CA 2010, it: 

• shall require that the infringement be ceased immediately; 
• may specify steps required to be taken by the infringing enterprise, and which appear to MyCC as appropriate for bringing the infringement to an end; 
• may impose a financial penalty; or 
• may give any other direction as it deems appropriate.

Section 40(4) CA 2010 provides that the financial penalty imposed by MyCC shall not exceed 10% of the worldwide turnover of an enterprise over the period during which an infringement occurred.

The Consumer Protection Act 1999 (CPA) prescribes certain types of conduct/behaviour that are prohibited when providing goods or services to consumers, including the following.

• Engaging in conduct that is false or misleading as to the nature, manufacturing process, characteristics, suitability for a purpose, availability or quantity of the goods or services, or making a false or misleading representation.
• Providing an indication that is misleading as to the price at which any goods or services are available.
• Bait advertising – ie, advertising for supply at a specified price which that person does not intend to offer or does not have reasonable grounds for believing can be supplied at that price.
• Offering any gift, prize or other free item without the intention of providing it, or not providing it as offered.
• Describing the goods as limited, in supplying or offering to supply the goods for sale to consumers, unless their edition, printing, minting, crafting or production is restricted to a predetermined maximum quantity or the actual quantity ordered or subscribed to within a specified and reasonably short period of time.
• Demanding or accepting any payment or other consideration for goods or services, if at the time of the demand or acceptance that person:
1. does not intend to supply the goods or services;
2. intends to supply goods or services materially different from the goods or services in respect of which the payment or other consideration is demanded or accepted; or
3. does not have reasonable grounds to believe they will be able to supply the goods or services within any specified period, or where no period is specified, within a reasonable time.

Any person engaged in any of the aforesaid conduct shall, on conviction, be liable to:

• (when a body corporate) a fine not exceeding MYR250,000, and for a second or subsequent offence, a fine not exceeding MYR500,000; or
• (when not a body corporate) a fine not exceeding MYR100,000 or imprisonment for a term not exceeding three years, or both, and for a second or subsequent offence, a fine not exceeding MYR250,000 or imprisonment for a term not exceeding six years, or both.

With the advent of increasingly complex technology systems, the occurrence of malpractice is ever rampant, and Malaysia is seeing an increase in the following technology-related offences.

Hacking

Pursuant to Section 3 of the Computer Crimes Act 1997 (CCA), it is an offence when a person knowingly and intentionally accesses a computer without authorisation and causes a computer to perform any function with the intent to secure access to any program or data held in any computer. A person found guilty is liable to a fine not exceeding MYR50,000 or imprisonment not exceeding five years, or both.

Section 4 of the CCA creates a further offence against persons who commit an offence under Section 3 with the intent to:

• commit an offence involving fraud or dishonesty which causes injury under the PC; or
• facilitate the commission of such an offence, whether by themself or any other person.

This is punishable by a fine not exceeding MYR150,000 or imprisonment not exceeding ten years, or both.

Cyber-bullying

Section 233(1)(b) of the Communications and Multimedia Act 1998 (CMA) provides that a person commits an offence if they continuously, repeatedly or otherwise initiate a communication using any applications services with the intent to annoy, abuse, threaten or harass any person at any number or electronic address, regardless of whether the communication ensued and of whether or not the person initiating such communication disclosed their identity. A person found guilty of an offence under Section 233(1)(b) is liable to a fine not exceeding MYR50,000 or imprisonment not exceeding one year, or both, and shall also be liable to a further fine of MYR1,000 for every day that the offence is continued after conviction.

Infection of IT Systems With Malware

Infection of IT systems with malware is an offence punishable under Section 5 of the CCA – ie, where a person performs any act which they know will cause unauthorised modification of the contents of any computer. A person found guilty of an offence under Section 5 is liable to a fine not exceeding MYR100,000 or imprisonment not exceeding ten years, or both, if the act was done with the intention of causing injury.

Other Activities

Any other activity that adversely affects or threatens the security, confidentiality, integrity or availability of any IT system, infrastructure, communications network, device or data is regulated under the CMA. For example, it is an offence to:

• use any apparatus or device with the intent to obtain information regarding the contents, sender or addressee of any communication without approval by a registered certifying agency (Section 231 CMA);
• possess or create a system designed to fraudulently use or obtain any network facilities, network service, applications service or content applications service (Section 232(2) CMA);
• intercept or attempt to intercept, or procure any other person to intercept or attempt to intercept, any communications (Section 234 CMA); and
• extend, tamper with, adjust, alter, remove, destroy or damage any network facilities or any part thereof (Section 235 CMA).

A person who is found liable for any of the above offences under the CMA may, upon conviction, be held liable to a maximum fine ranging from MYR50,000 to MYR300,000 or imprisonment not exceeding two to three years, or to both.

Organisations are required to ensure the security of individuals’ personal data pursuant to Personal Data Protection Principles, set out in Sections 6, 7, 8, 9, 10, 11 and 12 of the Personal Data Protection Act 2010 (PDPA). Non-compliance with any of the above listed Personal Data Protection Principles under the PDPA may render the offender liable to a fine not exceeding MYR300,000 or imprisonment not exceeding two years.

Recently, in July 2024, the Malaysian Parliament passed the Personal Data Protection (Amendment) Bill 2024. The bill is intended to align the data protection laws in Malaysia more closely with international standards. Substantial amendments have been introduced via the bill, including, but not limited to:

• the mandatory appointment of a data protection officer;
• the addition of biometric data as personal data; and
• increased penalties for breach of personal data protection principles up to RM1,000,000 and/or up to three years’ imprisonment.

However, the bill has yet to come into force.

Online Financial Fraud

Also in July 2024, the Malaysian Parliament passed the Penal Code (Amendment) Bill 2024. This bill seeks to amend the PC to include offences relating to payment instruments or accounts at financial institutions, as a measure to address the alarming rise of online financial fraud in Malaysia. The new offences that will be introduced are:

• Section 424A: the offence of possession or control of any payment instrument or account of other persons at a financial institution, without lawful authority or lawful purpose. This offence is punishable by a fine of not less than RM5,000 but not exceeding RM50,000, or imprisonment for not less than six months but not exceeding five years, or both.
• Section 424B: the offence of giving possession or control of any payment instrument or account at a financial institution to other persons, without lawful authority or lawful purpose. This offence is punishable by a fine of not less than RM10,000 but not exceeding RM100,000, or imprisonment for not less than one year but not exceeding seven years, or both.
• Section 424C(1): the offence of a person engaging in any transaction using their payment instrument or account at a financial institution without a lawful purpose. This offence is punishable by a fine of not less than RM10,000 but not exceeding RM150,000, or imprisonment for not less than three years but not exceeding ten years, or both.
• Section 424C(2): the offence of a person engaging in any transaction using any payment instrument or account of other persons at a financial institution, without lawful authority or lawful purpose. This offence is punishable by a fine of not less than RM10,000 but not exceeding RM150,000, or imprisonment for not less than three years but not exceeding ten years, or both.

Further, a bill to introduce new amendments to the CPC has been passed in Parliament to deal with the legal procedures in relation to such online financial fraud offences. These include the power for a police officer not below the rank of sergeant to seize or prohibit the dealing of monies involved in the suspected commission of such offences, and the power to arrest the suspects without a warrant.

However, these bills have yet to come into force.

Trade and customs laws in Malaysia are governed by:

• the Countervailing and Anti-Dumping Duties Act 1993;
• the Safeguards Act 2006;
• the Customs Act 1967;
• the Control of Supplies Act 1961; and
• the Strategic Trade Act 2010.

One of the main offences in respect of customs and trade sanctions pertains to the breach of export controls. In Malaysia, goods may be exported to any country except Israel (unless the Ministry of International Trade and Industry issues an export licence). Exports are controlled in certain cases, as follows:

• for gazetted or controlled goods;
• for goods listed as strategic items pursuant to the Strategic Trade Act 2010 or for such unlisted items that may be used in restricted activities;
• for goods regulated or prohibited by international agreements to protect endangered wildlife species pursuant to the International Trade in Endangered Species Act 2008; and
• for goods regulated or prohibited under the Customs (Prohibition of Exports) Order 2023.

There are two categories of controls on items for exportation under the Customs (Prohibition of Exports) Order 2023:

• items that are absolutely prohibited from being exported to all countries – ie, poisonous chemicals and minerals, and substances covered under the Montreal Protocol; and
• products that require an export licence or approval from the relevant authorities before they can be exported – ie, 95 RON petrol and liquefied petroleum gas.

The Ministry of International Trade and Industry and the Ministry of Domestic Trade and Cost of Living, among others, administer the requisite licences and/or approvals for most goods. 

Both the Customs Act 1967 and the Strategic Trade Act 2010 provide for the following penalties for violation of export controls:

• a jail sentence not exceeding five years, or up to life imprisonment, depending on the severity and type of offence; and
• fines of between MYR50,000 and MYR30 million or more.

In addition, the Strategic Trade Act 2010 also imposes capital punishment for certain offences where the breach or offence results in death.

Section 120 of the PC provides that a person who voluntarily conceals the existence of a design to commit an offence punishable with imprisonment shall, if the offence is committed, be punished with imprisonment for a term which may extend to one-quarter – and if the offence is not committed, to one-eighth – of the longest term provided for the offence, or with such fine as is provided for the offence, or with both.

Concealing the subject matter of an offence of accepting gratification is an offence on its own, and is punishable under Section 26 of the MACCA.

Any person (whether within or outside Malaysia, directly or indirectly, and/or on behalf of themself or any other person) who enters into, or causes to be entered into, any dealing in relation to any property, or otherwise uses or causes to be used, or holds, receives or conceals, any property or any part thereof which was the subject matter of an offence under Sections 16, 17, 18, 20, 21, 22 or 23 of the MACCA, is punishable under Section 26 of the MACCA.

The individual offences identified in Section 26 of the MACCA include:

• the offence of accepting gratification (Section 16);
• the offence of giving or accepting gratification by agent (Section 17);
• the offence of intending to deceive the principal by agent (Section 18);
• corruptly procuring withdrawal of tender (Section 20);
• bribery of an officer of a public body (Section 21);
• bribery of foreign public officials (Section 22); and
• the offence of using an office or position for gratification (Section 23).

Upon conviction, the convicted person may be sentenced to a fine not exceeding MYR50,000 or imprisonment for a term not exceeding seven years, or both.

An offender who has committed a predicate offence and who subsequently commits an offence for concealment could be charged and punished for both offences, respectively.

A predicate offence, in the context of money laundering offences, was explained by the Court of Appeal in Public Prosecutor v Kuala Dimensi Sdn Bhd and Others [2018] MLJU 791, as follows.

• First, there must be an “unlawful activity”, which is any activity related to the predefined list of offences provided under the Second Schedule of the AMLA. These predefined offences are typically known as the predicate offences.
• Second, there must be identifiable proceeds from, and specifically and directly connected to, the unlawful activity/predicate offence.
• Third, there must be an act associated with money laundering involving said identifiable proceeds from the unlawful activities/predicate offence.
• Finally, the requisite mens rea (which may be inferred from the objective factual circumstance or the conduct of a natural person) associated with the offence of money laundering must be present.

As such, predicate offences under the AMLA are those offences found under the Second Schedule of the 2001 Act – ie:

• the offence of falsification, concealment and destruction of documents under Section 108 of the Development Financial Institutions Act 2002; and
• the offence of dishonest or fraudulent removal or concealment of consideration under Section 424 of the PC.

Section 107 of the PC provides for the offence of abetting, whereby a person abets the doing of a thing by instigating, engaging with or intentionally aiding the doing of that thing.

Section 109 of the PC provides that whoever abets any offence shall, if the abetted act is committed in consequence of the abetment, and if no express provision is made by this code for the punishment of such abetment, be punished with the punishment provided for the offence.

Section 28 of the MACCA provides that any person who attempts to commit any offence, who performs any act preparatory to or in furtherance of the commission of any offence, or who abets or is engaged in a criminal conspiracy to commit any offence, commits such offence and shall, on conviction, be liable to the punishment provided for such offence.

To establish the offence of money laundering under Section 4(1) of the AMLA, the prosecution must prove that the accused person has:

• engaged, directly or indirectly, in a transaction that involves proceeds of an unlawful activity or instrumentalities of an offence;
• acquired, received, possessed, disguised, transferred, converted, exchanged, carried, disposed of or used proceeds of unlawful activity or instrumentalities of an offence;
• removed from or brought into Malaysia proceeds of an unlawful activity or instrumentalities of an offence; or
• concealed, disguised or impeded the establishment of the true nature, origin, location, movement, disposition, title of, rights with respect to, or ownership of proceeds of an unlawful activity or instrumentalities of an offence.

Pursuant to Section 4 of the AMLA, it is also an offence for any person to engage in or abet the commission of money laundering, and they shall on conviction be liable to a fine not exceeding MYR5 million or imprisonment for a term not exceeding five years, or both.

Under Section 4(2) of the AMLA, a person may be convicted of an offence under the above-mentioned, irrespective of whether there is a conviction for a serious offence or whether a prosecution has been initiated for the commission of a serious offence or foreign serious offence.

Predicate offences are set out in the Second Schedule of the AMLA, and include:

• fraud;
• drug trafficking;
• corruption and bribery;
• smuggling offences; and
• tax crimes.

The AMLA also imposes anti-money laundering requirements on “reporting institutions” – ie, as follows:

• to conduct CDD and risk assessments;
• to report suspicious transactions to BNM;
• to maintain and retain records of transactions;
• to implement an AML compliance programme that is reflective of the reporting institution’s money laundering risk exposure and its size, nature and complexity; and
• for selected reporting institutions only, to submit a CTR to BNM for cash transactions in the amount of MYR25,000 and above.

The MACC and BNM are the competent authorities for enforcing compliance with these requirements under the AMLA. In particular, BNM’s role includes:

• receiving suspicious transaction reports and CTRs from reporting institutions;
• making relevant recommendations to the relevant supervising authority, enforcement agency and reporting institutions; and
• issuing circulars, policies or guidelines to give full effect to the provisions of the AMLA.

The main common defence for a white-collar offence is that the prosecution has failed to make out or prove the constituent elements of the charge.

In addition, Section 17A(4) of the MACCA provides that the existence of an effective compliance programme may be a defence against the corporate offence of bribery. It shall be a defence for the commercial organisation to prove that it had in place adequate procedures to prevent associated persons from undertaking such conduct.

The Guidelines on Adequate Procedures were introduced by the Prime Minister’s department pursuant to Section 17A(5) of the MACCA, to assist commercial organisations in understanding the adequate procedures that should be implemented to prevent the occurrence of corrupt practices in relation to their business activities.

The Guidelines were formed on the basis of five core principles:

• top level commitment;
• risk assessment;
• undertaking control measures;
• systematic review, monitoring and enforcement; and
• training and communication.

These may be encapsulated using the acronym TRUST.

There are no written de minimis exceptions for white-collar offences in Malaysia, nor are there any exempt industries or sectors. The Attorney General as the Public Prosecutor retains the prosecutorial powers and discretion to either:

• not initiate criminal proceedings; or
• discontinue pending proceedings in the event the violation is trivial in nature upon receipt of written representation from the accused.

Plea bargaining is the legal process where an accused individual can reach an agreement with the Public Prosecutor by pleading guilty to the offence in return for certain concessions, such as a reduced charge or a more lenient sentence. The procedure for plea bargaining is outlined in Sections 172C to 172F of the CPC and in decisions of the court (see PP v Manimaran Manickam (2011) 8 CLJ 439), and can be summarised as follows.

• A plea-bargaining request must be initiated by the accused, by submitting an application to the Public Prosecutor.
• The Public Prosecutor should promptly respond to the request, and parties should ideally agree on the acceptable sentencing range, preferably in writing.
• Once an agreement is reached, it should be presented to the court. If the court approves, it will impose a sentence within the agreed-upon range. If, however, the court does not agree with the proposed sentence, it is obliged to inform the parties involved and to provide details about the sentence it intends to impose. The next course of action is then left to the parties to determine. In the absence of an agreement, the case should proceed to trial.

Pursuant to Section 13 of the CPC, there is a general duty to immediately give information to an officer of the nearest police station that relates to another person’s intention to commit any offence punishable under the PC or any other written law.

There is also a duty under Section 25 of the MACCA to report bribery transactions where a person has been given, promised or offered gratification. Failure to comply with this provision may result in an individual being liable to a fine not exceeding MYR100,000 or imprisonment for a term not exceeding ten years, or both.

Findings of an internal investigation may be reported to the RMP by way of a first information report submitted to a police station. Reports pertaining to a suspected offence under the MACCA are lodged with the MACC.

Any co-operation given to legal/enforcement authorities in their investigation and/or prosecution of an offence will be taken as a mitigating factor by the court.

The Whistle-blower Protection Act 2010 (WPA) is the key legislation conferring protection to whistle-blowers, and includes:

• protection of confidential information;
• immunity from civil and criminal action; and
• protection of the whistle-blower and of any person related to or associated with them against detrimental action (Section 7(1) WPA).

This would extend to:

• protection against having confidential information disclosed or required to be disclosed in a manner which could expose the whistle-blower; and
• a blanket immunity from civil and criminal action for the purposes of disclosures made; and protection against reprisals as a result of disclosure, such as termination of employment, withholding of payment due and payable, and refusal to enter into subsequent contracts, solely for the reason of the whistle-blower having made the disclosure.

The MACCA provides similar protection for whistle-blowers. Where an individual provides information to a MACC officer that leads to a complaint, the identity of the individual together with the information provided shall not be disclosed, nor can the courts, tribunals or any other authorities order such information to be disclosed. Furthermore, any documents or materials presented in court related to the offence must have the individual’s identity concealed or redacted to prevent their identification and ensure their protection.

Most companies in Malaysia have implemented internal whistle-blowing policies in an effort to reduce, if not eliminate, bribery and corruption within the corporation. In particular, this follows the introduction of Section 17A of the MACCA, which provides that a corporation itself may be charged for an offence of bribery. Under Section 17A(4) of the MACCA, a corporation charged with an offence of bribery has a statutory defence if it had in place adequate procedures to prevent persons associated with the corporation from engaging in the conduct of bribery.

In terms of what amounts to “adequate procedures”, the Prime Minister’s department has issued the official Guidelines on Adequate Procedures, which provide that a commercial organisation should, inter alia, establish an accessible and confidential whistle-blowing channel that may be used anonymously, while encouraging persons to report, in good faith, any suspected, attempted or actual corruption incidents.