Oman Cracks Down on Corruption: New Penal Code Targets Illegitimate Benefits

Combating Corruption and Promoting Transparency

Muscat, Oman - In a bid to combat corruption and promote transparency, Oman has introduced significant changes to its penal code, making it a criminal offence for public officials and companies to engage in illegitimate benefits and bribery.

Revised Penal Code Takes Effect

The revised penal code, which came into effect on January 1st, introduces harsh penalties for individuals and companies found guilty of corruption. Public officials who accept or offer bribes can face imprisonment for up to five years, while companies can be fined up to OMR 50,000 (approximately USD 130,000).

Key Provisions

• The new code criminalizes the seeking and acceptance of illegitimate benefits by public officials, as well as the offering of such benefits.
• The definition of an illegitimate benefit is broad, encompassing any gift or hospitality provided with the intention of influencing a public official.

Corporate Liability

For companies operating in Oman, the introduction of corporate liability provisions means that they can be held criminally liable for the actions of their representatives, directors, and agents. This has significant implications for businesses, which must now conduct due diligence on external representatives and sub-contractors to prevent corruption.

• Companies are advised to extend compliance policies beyond employees to cover external representatives and sub-contractors.
• Retain the right to conduct compliance audits in contracting parties’ organisations.

Transnational Organised Crime

The revised penal code also includes a new chapter dedicated to transnational organised crime. The code defines an organised criminal group as a group of at least three participants, and participation in or assistance with such groups can result in severe criminal penalties.

• Companies operating internationally must be aware of the risk of involvement in transnational organised crime through employees or external representatives.
• Take steps to prevent such activity from taking place within their organisations.

Significance for International Business

The upgraded penal code provides an opportunity for businesses operating in Oman to:

• Review and update compliance policies
• Conduct training sessions
• Review third-party agreements

Compliance is key to preventing financial crimes and maintaining a positive reputation in the market.

Conclusion

In conclusion, the revised Omani penal code sends a strong message that corruption will not be tolerated in the Sultanate. Businesses operating in Oman must take steps to ensure they are compliant with the new regulations to avoid severe penalties and reputational damage.