The Malaysian Anti-Corruption Commission Chief Commissioner is aiming to introduce the Deferred Prosecution Agreement mechanism into legislation as a means for “speedier recovery of assets and funds off of egregious corporate wrongdoings and inducing better compliance by the offending organisations to prevent future violations”. One needs only to watch TV series "Billions" to appreciate the interventions of federal prosecutions on financial crimes.
The US, the UK, Canada, France, Singapore and Australia have adopted DPAs to settle charges for, amongst them, white-collar crimes. Increasingly more countries are following suit. More likely than not, every country’s DPA model varies in consideration of legislative & economic landscapes, geographical expanse, multifaceted impacts of prosecution, in interests of justice, societal expectations on punishment to commensurate with crime, etc.
What is a Deferred Prosecution Agreement
A DPA is negotiated between a prosecutor and a defendant organisation to suspend prosecution of an alleged offence for a specific period, provided the organisation agrees to the prosecutor’s specified conditions. The offender is generally required to accept and admit the allegations as true and factual. This is not necessarily an admission to guilt.
Conditions that are laid out to a defending organisation ought to be fair, reasonable and proportionate, thus not ruling out various combinations that include:
disgorgement of profits derived from the offence;
paying fines or penalties, or both;
paying prosecutor’s costs
compensation to victims of underlying offence
potentially undergoing a monitorship appointed by the prosecutor to reform its compliance regiments and paying the monitorship costs;
self-monitoring and reporting to the regulator for the duration;
reparations of the offence;
abstaining from repeat offences or otherwise violating the DPA terms.
Primarily to accord the prosecutor the prospect of resolving corporate criminal litigations faster, economically and justly, the defendant is compelled to:
disclose proactively and all its findings of the detected violations;
provide prompt and the fullest cooperation to ongoing investigations; and
remediate situations that led to the offending conducts and strengthen its compliance procedures to deter future misconducts.
Should the organisation acquiesce to these standards and all other requirements set out in the DPA, its case would be discharged through discontinuance or declination by prosecutor.
Perspective on approaches
The US has had experiences with DPAs for decades. France and the UK would later on frame their DPA guides for implementation:
While the US prosecutors account DPAs for much success in prevention, detection, and investigations of corporate crimes, they face a recency in FCPA violations by the same companies as well. Repeat offences by such companies indicates the focus on self-governance may have been superficial and little credence in commitment to observing the rule of law. Like the cat-and-mouse chase between US Attorney Chuck Roades and Bobby Axelrod the unrepentant hedge fund executive on Billions, all bets are off.
Perhaps the benefactors out of every potential DPA are the:
government agencies which reap exorbitant fines off of the punitive penalties;
leading firms appointed as monitors that continue to make business; and
offenders who remain unperturbed having avoided criminal convictions.
Malaysia's DPA
Malaysia's 1MDB scandal has attributed to a widening national debt, weakening of currency and in the process putting its developed-nation-plans on hold. Sure. MACC's resources wear thin investigating many other corporate corruption cases. Sure. Whilst providing good grounds for the anti-corruption authority to push the DPA agenda through, economic considerations alone are not nearly enough. It will be meaningful to also deliberate other factors in support of a DPA system that works for Malaysia:
How to hold individuals accountable for crimes they personally committed?
Can protection for whistleblowers be furthered?
What are the treasury management protocols on collected penalties, forfeitures and compensation mechanisms?
What more should be offered to incentivise corporations for good conduct and curb potential recidivism?
How to make available information related to DPA efforts and successes with offenders?
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