Traditionally, anti-corruption laws have been confined to the public sector to specifically prevent the misuse of public property and authority. The recently enacted Anti-Corruption Act, No. 9 of 2023 (the "Act") therefore represents a notable paradigm shift in that it applies to both the "giving" and "taking" of bribes by private sector entities (as defined, as opposed to its predecessor, the Bribery Act, which focused only on the "giving" of bribes to public officials.
Accordingly, every employee and director of a private sector entity is prohibited under the Act from soliciting or accepting an advantage (or bribe) for him or herself, or another person, in order to commit an act or omission in breach of his or her duties.
The term "private sector entity" has been defined under the Act by reference to those entities specified in the schedule to the Sri Lanka Accounting and Auditing Standards Act, No. 15 of 1995 and includes licensed banks, insurance companies, leasing companies, factoring companies, finance companies, companies operating unit trusts, fund management companies, stockbroking and stock dealing firms, stock exchanges, listed companies, unlisted companies, and group companies within the meaning of the Companies Act, No. 7 of 2007.
Notably, unlisted companies are qualified to be those entities which have: (a) turnover in excess of five hundred million rupees per annum; (b) shareholders' equity in excess of one hundred million rupees at the end of the previous financial year; (c) gross assets in excess of three hundred million rupees at the end of the previous financial year; (d) liabilities to banks and other financial institutions in excess of one hundred million rupees at the end of the previous financial year; or (e) staff in excess of one thousand persons [refer the Unlisted Companies Regulations, No. 1 of 1999 published in Gazette Extraordinary bearing No. 1074/7 dated the 7th of April 1999].
The Act also provides protection for informants Any provision in an employment contract which purports to preclude or discourage an employee from providing information to the Bribery Commission shall be void. The Act further specifies that such an informant shall not be subject to "adverse conditions of employment" This term has been defined to include harassment by co-workers which shall be treated as committed by the employer, notwithstanding that it was done without the knowledge or approval of the employer.
The consequences for violating the Act are a term of imprisonment of up to seven years and / or a fine of up to Rs. 1 million.
Disclaimer: This article is intended for informational purposes only and should not, under any circumstances, be used or construed as legal advice in any manner or form.
