Oman’s New Penal Code Cracks Down on Government Contracts and Corruption
A Tougher Stance on Corruption
The Omani government has introduced a new Penal Code aimed at combating corruption and fraud in government contracts. The code includes provisions that make it illegal for public officials to accept bribes or benefits from contractors, as well as criminal penalties for companies that engage in corrupt practices.
Key Provisions of the Code
- Fraudulent Practices: Anyone who commits fraud in the performance of a government contract can face imprisonment for up to five years. Offenders will also be required to make restitution to the government entity harmed by their actions (Article 221).
- Prevention of Transnational Organized Crime: The code includes provisions aimed at preventing transnational organized crime from establishing itself in Oman. Participation or incitement of such activities can result in severe criminal penalties, including imprisonment and fines.
Corporate Liability
The code’s corporate liability provisions mean that companies can be held criminally liable for the offenses committed by their representatives, directors, or agents acting on their behalf. This triggers a need for companies to:
- Conduct due diligence on external representatives, subcontractors, and agents
- Ensure compliance with anti-corruption policies
The Consequences of Non-Compliance
Individuals who engage in corrupt practices can face severe penalties, including imprisonment and fines. Companies that fail to comply with the code’s provisions can also be fined and may even be ordered to be dissolved.
In addition to legal consequences, corruption can have serious reputational damage for companies, potentially resulting in:
- Loss of business opportunities
- Loss of customers
The Importance of Transparency and Compliance
To avoid these consequences, international businesses operating in Oman must prioritize transparency and compliance with anti-corruption laws. This includes:
- Conducting regular audits
- Providing compliance training
- Extending certain compliance obligations to contracting parties
By implementing proper compliance policies and procedures, companies can not only avoid legal penalties but also maintain a positive reputation and ensure the long-term success of their business operations in Oman.