Written by Isaac Chew and Alexander Pio Lopes
A Deferred Prosecution Agreement (‘DPA’) is a deal between a company and a prosecutor that puts criminal charges on hold. The company avoids trial by agreeing to conditions like paying a fine, compensating victims, and improving its compliance practices. If it meets these terms, the case may be dropped. DPAs are typically used for fraud, bribery, and economic crimes.
MACC’s 2026 DPA Plan
The Chief Commissioner of Malaysian Anti-Corruption Commission (‘MACC’), Tan Sri Azam Baki had announced in May 2025, that the DPA mechanism to be adopted by 2026 through amendments of the Malaysian Anti-Corruption Commission Act 2009 (‘the MACC Act’) which is planned to be tabled mid-2026.
The intended mechanism will only be used for ‘grand corruption’ cases and not in ‘smaller amounts’ cases. Its aim is to have quick recovery of assets, reducing lengthy prosecution, and protecting innocent stakeholders.
According to the Chief Commissioner, upon mutual agreement and complying with the DPA, the seized assets, fines and penalties imposed on the company would go into the national coffers and be nationalised
The process of DPA
References will be made as to the UK’s DPA model as MACC appears to be leaning towards UK’s model.
The prosecutors take into account the criteria set out in the Code of Practice when offering a DPA to a company. In practice, it boils down to three elements:
- The seriousness of the offence;
- Degree of cooperation given by the company; and
- The extent to which the company has reformed itself.
DPAs are merely discretionary, hence it is still up to the prosecutors to decide whether to offer a DPA to a company even where there is cooperation. There is a two-stage test that must be established.
Evidential Stage Test
The prosecutor must be satisfied that:
- there is sufficient evidence for a realistic conviction; or
- at least reasonable suspicion based on admissible evidence, with reasonable grounds to believe that further investigation would provide more admissible evidence.
Public Interest Test
The prosecutor must demonstrate that there is a greater public interest not to pursue prosecution, and there is a need to offer a DPA.
Once, these two stages have been satisfied, the prosecutor must apply to the Crown Court that:
- entering to a DPA with the company is likely to be in the interest of justice; and
- that the proposed DPA terms are ‘fair, reasonable, and proportionate’.
Once there is mutual agreement, the prosecutor is required to obtain a declaration that:
- the DPA is in the interest of justice; and
- the terms are fair, reasonable and proportionate.
Upon which, the DPA comes into force when the Court approves of it. It is a practice that this is publicly released, to promote transparency in light of public interest.
Countries that implement DPA
United Kingdom
According to the Serious Fraud Office, up to 2025 there has been only 12 DPAs that have been reported.
The process of the DPA is the UK is comparatively more systematic as it is provided for in the Crimes and Courts Act 2013 along with its DPA Code of Practice 2013. These legislations provide the court with judicial power to review the terms of the DPA, allowing for a check and balance by judiciary.
United States of America
Being the first country to introduce this mechanism, has a different approach as the framework allows for the company and the prosecutor freely, with little to no judicial intervention. In 2023 alone, there were 12 recorded DPAs.
Singapore
During Parliamentary Questions in February 2022, Minister of Law Mr K Shanmugam, who was queried on the number of DPAs entered into had indicated that there was no DPAs entered into since its implementation in 2018.
DPA Application in Malaysia
For the justice system, DPA can save time and resources by avoiding full trials. Officials note that DPAs ‘could reduce both costs and lengthy court proceedings’ while still holding companies accountable
From a business perspective, DPA enables companies to continue operating while addressing the issues. Instead of facing a criminal trial or being automatically blacklisted, a company under a DPA can self-report, admit wrongdoing, and focus on reforms during the agreed compliance period.
Transparency International Malaysia pointed out that DPA can offer advantages such as saving public funds, protecting jobs, and keeping companies operational while ensuring wrongdoers are held accountable. However, they emphasised the need of transparency, public accountability, and court oversight. Crucially, they warned that the DPA mechanism must not be vulnerable to political or executive interference, or risk becoming a tool for selective enforcement.
Criminologist Dr Geshina Ayu from Universiti Sains Malaysia warns that DPA could weaken the justice system’s ability to deter crime. She argues that allowing wealthy corporations to settle cases with money instead of facing prosecution might lead to unfair outcomes and lessen public awareness of corporate wrongdoing.
According to MACC Chief Commissioner Tan Sri Azam Baki, DPA mechanism could enable the government recover embezzled public funds more quickly. He added that it has the potential to bring back as much as RM40 billion.
However, concerns have been raised about the compatibility of DPAs with s 17A of the MACC Act, which aims to punish organisations that fail to prevent corruption, such as bribery, and giving or receiving any gratification. The use of DPA could be seen as working against this goal. This is because the individuals directly involved in the wrongdoing might end up avoiding or reducing their personal responsibility, which may weaken the intended deterrent effect of the law.
On the other hand, it can be seen as a way the government intends to promote rehabilitation of the company rather than to sanction criminal liability which can affect innocent stakeholders.
Conclusion
In short, Malaysian authorities view DPAs as a practical tool to tackle large-scale corruption more effectively. The impact will depend on how well Malaysia strikes a balance between these benefits and risks in shaping its final DPA framework.