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Anti-Corruption Regulation in Singapore.

25 February, 2012

 

 
1 What are the main bodies responsible for investigating and combating corruption, money laundering and terrorist financing?
 
The main body charged with investigating corruption in Singapore is the Corrupt Practices Investigation Bureau (the “CPIB”).
 
The Commercial Affairs Department (the “CAD”) of the Singapore Police Force is Singapore’s principal white-collar crime investigation agency. The CAD’s Financial Investigation Division is specially tasked to combat money laundering in Singapore and works closely with local financial institutions, government agencies and its foreign counterparts. Within  this division, there are three branches – the Suspicious Transaction Reporting Office (the “STRO”), the Financial Investigations Branch (the “FIB”) and the Proceeds of Crime Unit (the “PCU”). The STRO receives and analyses Suspicious Transaction Reports and provides financial intelligence information for the detection of money laundering, terrorist financing and other criminal offences. The FIB handles investigations into money laundering and terrorist financing offences. The PCU identifies and seizes proceeds of crime.
 
Additionally, the Monetary Authority of Singapore is responsible for issuing guidelines on money laundering and terrorist financing to financial institutions.
 
2 What does each of these bodies investigate?
 
The CPIB is the principal agency responsible for investigating and preventing corruption in Singapore, focusing on corruption-related offences arising under the Prevention of Corruption Act (the “PCA”) and the Penal Code. The CPIB includes an Operations Department (which carries out intelligence and support work), a Corporate Affairs Department and an Investigation Department. The Investigation Department is tasked with investigating offences under the PCA. For all corruption cases, the Public Prosecutor’s consent must be obtained before the offender can be prosecuted.
 
The CAD focuses on white-collar offences and enforces a range of legislation that governs financial and commercial entities in Singapore. In addition to the Financial Investigation Division, it includes a Corporate Fraud Division, which is responsible for investigating offences by officers and directors of business entities, a Securities and Maritime Fraud  division, which investigates criminal offences under the Securities and Futures Act and maritime, investment and financing-related frauds, and a Commercial Crime Division, which handles currency and credit card offences, as well as organised fraud.
 
The Monetary Authority of Singapore does not carry out investigations relating to money laundering and terrorist financing activities although it issues notices and guidelines to financial institutions relating to such activities.
 
3 What is the source of anti-corruption regulations in Singapore?
 
The PCA is the primary anti-corruption legislation in Singapore. The CPIB derives its powers from this statute. The PCA applies to both public and private sector bribery. 
 
The Penal Code also creates various specific offences related to corrupt conduct involving Singaporean public officials. 
 
The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (the “CDSA”) criminalises any dealing with proceeds from drug trafficking or criminal conduct classified as a serious offence (a list of offences which are statutorily deemed to be serious is provided in the CDSA) and/or benefits derived therefrom. Corruption offences under the PCA are included within this list of serious offences.
 
The Singapore Government also issues an Instruction Manual containing guidelines regulating the conduct of government officials, but this is not publicly available
 
4 What constitutes a bribery/corruption offence under the PCA/Penal Code?
 
Under the PCA, it is an offence for a person to:
 
• corruptly solicit, receive, or agree to receive for himself or any other person; or
• corruptly give, promise or offer to any person whether for the benefit of that person or of another person, any gratification as an inducement to or reward for:
• any person doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed; or
• any member, officer or servant of a public body doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which such public body is concerned.
 
It is also an offence under the PCA for an agent to corruptly accept or obtain any gratification in relation to his principal’s affairs, for a person to seek to corruptly influence an agent, or for an agent to deceive his principal by way of a false document. There is also a specific offence under the PCA of bribing a Member of Parliament.
 
There are two stages in assessing whether an offence of corruption has been committed under Singapore law. First there must be a corrupt element in the transaction according to the ordinary and objective standard, and second the offender must have guilty knowledge that what he was doing was, by that standard, corrupt.
 
The PCA creates a presumption of corruption where any gratification is proved to have been given or received by a person in the employment of the Government of Singapore or of a public body. The burden of proof to rebut the presumption lies with the accused.
 
The Penal Code contains a number of offences relating to the bribery and conduct of public officials, including a public servant taking a gratification – other than legal remuneration – in respect of an official act, taking a gratification to corruptly influence a public servant or taking a gratification for the exercise of personal influence with a public servant.
 
We understand that the Instruction Manual also contains provisions which extend to the receipt of gifts and entertainment by government officials and their dependents.
 
Do local anti-corruption regulations have extra-territorial effect?
 
The provisions of the PCA apply to Singapore citizens outside as well as within Singapore. Where an offence under the PCA is committed by a Singapore citizen outside Singapore he may be prosecuted as if the offence occurred in Singapore. Bribery of foreign public officials is not expressly prohibited under the PCA. Given the extra-territorial effect of the PCA, however, bribery of a foreign public official by a Singapore citizen outside Singapore would fall within the scope of the PCA.
 
The Penal Code also has extra-territorial effect in that it provides that “an act committed outside Singapore by a public servant purporting to act in the course of his employment that would constitute an offence within Singapore is deemed to have been committed in Singapore.”
 
6 Are there any statutory defences provided under the relevant legislation, eg, de minimis exceptions, payments that are legal in the country in which they are offered etc?
 
There are no such statutory defences set out in the PCA. Rather, the Singapore courts adopt a two-stage test in determining whether an offence has been made out. As referred to above, it must be shown that (i) objectively, the transaction had a corrupt element and (ii) the offender knew that what he was doing was corrupt by that standard.
 
Further, the Singapore courts have held that questionable payments made pursuant to an “industry practice” or “business custom” do not constitute a defence to any prosecution brought under the PCA.Guide to Anti-corruption Regulation in Asia 2012/2013 62
 
7 What powers of investigation does the CPIB have and what are the 
consequences of non-compliance?
 
Under the PCA, the CPIB has extensive powers of investigation. The Director or any special investigator of the CPIB is entitled to exercise all of the powers in relation to police investigations set out in the Criminal Procedure Code to investigate any case relating to the commission of an offence under the PCA, certain offences under the Penal Code and any seizable offence (ie, an offence where an arrest may be carried out without warrant) disclosed in the course of the investigations. These powers include the power to require the attendance of witnesses for interview, to investigate a suspect’s financial and other records and the power to investigate any other seizable offence disclosed in the course of a corruption investigation.
 
Special investigatory powers can be conferred by the Public Prosecutor by order in appropriate cases. Such order may authorise CPIB officers to investigate any bank account, share account, purchase account, expense account or any other form of account or any safe deposit box, and require the disclosure or production to the officer of all information, accounts, documents or articles required by the officer.
 
The Public Prosecutor may also authorise the Director or any officer of the CPIB to inspect any banker’s books and take copies where certain crimes, including any crime under the PCA, are suspected.
 
8 What are the powers of arrest and detention of the CPIB?
 
Under the PCA, the Director or any special investigator of the CPIB may, without a warrant, arrest any person who has been concerned in any offence under the PCA, against whom a reasonable complaint has been made or credible information has been received or a reasonable suspicion exists of his having been so concerned. A person can be detained for up to 48 hours from the time of his arrest. At the end of the investigation or the 48-hour detention period (whichever is the earlier), the person may be released unconditionally, released on police bail pending further investigations or produced in court.
 
The Director or a special investigator arresting a person under this power is empowered to search such person and take possession of all articles found upon him which there is reason to believe were the fruits of, or other evidence of, the crime.
 
Does the CPIB have powers to freeze properties which may be proceeds of a bribery/corruption offence pending conclusion of its investigation?
 
The CPIB has the power to seize property found under circumstances which create suspicion of the commission of any offence during its investigations, including freezing bank accounts.
 
10 Are there any provisions requiring investigations or information disclosed during the course of investigations to be kept quiet?
 
The PCA contains provisions protecting the identity of informants but does not expressly state that investigations or information disclosed during the course of investigations must be kept quiet.
 
The CDSA expressly prohibits any officer who has received information in the performance of his duties or exercise of his functions under the CDSA from making any disclosure unless he is required to do so under the law. The CDSA also prohibits tipping off by any person who knows of or has reasonable grounds to suspect that any investigation under the 
CDSA is being conducted or proposed to be conducted.
 
11 Are there protections available when responding to investigations by the CPIB, eg, right to legal representation at interviews, privilege against selfincrimination and legal professional privilege? 
 
During its investigation, the CPIB may require a person to attend and provide information as a witness but not as a suspect. If a person refuses to do so, the officer may apply to a magistrate for a warrant of arrest to compel his attendance before the officer. There is no general right to legal counsel during questioning save in the event that the person questioned was arrested, in which case the Constitution of Singapore allows for the arrested person to consult and be defended by a legal practitioner of his choice. However, the courts have held that the right to counsel is not triggered immediately upon arrest, but “within a reasonable time after arrest”. In practice, the arrested persons are  usually not allowed to be accompanied by legal counsel at the time of questioning.
 
Generally, a person interviewed by the police is bound to tell the truth, but he is entitled to decline to provide any information which may expose him to a criminal charge (save for corruption-related offences). The courts have held that for corruption offences under the PCA, the person interviewed by the CPIB is not entitled to assert any privilege against self-incrimination.
 
The position relating to legal privilege is not entirely clear in relation to corruption offences under the PCA. There is some authority to suggest that a person may rely on legal professional privilege if the information is of such nature that it is protected by such privilege, although in practice, the CPIB could circumvent this by seeking a waiver of that privilege from the holder of the privilege or by applying for a summons or warrant to compel the disclosure of the information.
 
12 Do the relevant anti-corruption measures relate only to the bribery of “public” individuals and/or bodies?
 
The bribery offences under the PCA relate to bribery both in the public and private spheres.
 
The offences set out in the Penal Code relate principally to offences involving public officials.
 
13 What sanctions/sentences may the relevant authorities impose?
 
A person convicted of an offence under the PCA, described in question 4 above, is liable to a fine of up to SGD100,000, imprisonment for up to five years, or both. Where the offence in question involves a government contract or bribery of a Member of Parliament, the custodial sentence may be extended to seven years.
 
Where an offence involves a sum of money paid by way of gratification, or the value of the gratification can be assessed, the PCA also provides for penalties to be paid in addition to the punishment. The objective of imposing these penalties is to disgorge from the offender’s proceeds from the corrupt transactions. A person convicted of an offence of bribery under the Penal Code may be sentenced to a fine and prison sentence of up to three years.
 
14 Is it possible to enter into a settlement to resolve any enforcement action/prosecution by the CPIB?
 
The CPIB does not prosecute cases itself but passes these to the Public Prosecutor, who has prosecutorial discretion as to whether or not criminal proceedings will be initiated. It is not possible to enter into a settlement with the Public Prosecutor to prevent prosecution. However, a plea bargaining process is available. An accused person can submit, on a without prejudice basis, letters of representation to the Public Prosecutor to negotiate the possible withdrawal, amendment or reduction of the charges, highlighting any merits of his case that may warrant the exercise of the Public Prosecutor’s discretion to do so. In spite of this “without prejudice” negotiation process, the discretion to accede to the requests in the letters of representation remains solely with the Public Prosecutor.
 
Once criminal proceedings have been initiated, the accused may, having reviewed the documents and merits of the prosecution case, choose to plead guilty and enter a plea in mitigation to avoid a criminal trial.
 
15 Are there provisions for persons to appeal against any enforcement action/prosecution taken against them?
 
An accused person cannot appeal the decision of the Public Prosecutor to prosecute him, though the exercise of prosecutorial power is subject to judicial review. A person found guilty of any offence may appeal against his conviction and/or sentence to the appropriate appellate court. If the accused person had pleaded guilty to the charge, he can  only appeal against the sentence imposed by the court, but is barred from appealing against his conviction.
 
16 Do the police and other local regulatory authorities assist the CPIB in its investigations?
 
The CPIB reports directly to the Prime Minister and therefore has a significant degree of functional independence from the police. The CPIB does however work with local law enforcement agencies and government departments including the police, the CAD and the Central Narcotics Bureau in gathering evidence and obtaining information.
 
17 How does the CPIB interact with overseas regulators?
 
The CPIB has signed a Memorandum of Understanding on Preventing and Combating Corruption with ASEAN anticorruption agencies. The Memorandum of Understanding is designed to enhance mutual sharing and capacity building and to strengthen the resolve to fight corruption in the region.
 
Singapore also has in place a Mutual Assistance in Criminal Matters Act, which allows the Attorney General to request assistance from foreign countries, and for assistance to be given by Singapore, in relation to certain requests relating to matters such as obtaining evidence, securing the attendance of persons or the enforcement of confiscation, production and search orders.
 
18 Are there any laws or regulations imposing obligations on persons to “whistleblow” or disclose suspected corruption or money laundering within an organisation?
 
Section 39 of the CDSA requires any person who knows or has reasonable grounds to suspect that any property:
 
• represents the proceeds of;
• was used in connection with; or
• is intended to be used in connection with,
 
an act that may constitute drug trafficking or criminal conduct and who obtains that information in the course of their trade, profession, business or employment, to disclose that information to a Suspicious Transaction Reporting Officer. Failure to comply with section 39 is an offence, punishable on conviction by a fine of up to SGD20,000.
 
The Monetary Authority of Singapore has issued a Code of Corporate Governance applicable to listed companies. Compliance with this Code is not mandatory, but listed companies are required to explain any deviations from it in their annual reports. The Code requires companies to establish an Audit Committee which should make arrangements for  members of the company’s staff to raise concerns about possible improprieties in financial reporting or other matters and for such concerns to be investigated.
 
19 What is the impact of overseas anti-corruption laws such as FCPA and the UK Bribery Act on companies and/or individuals in Singapore?
 
The US Foreign Corrupt Practices Act (the “FCPA”) prohibits the bribery of “foreign officials”. It is extra-territorial in effect and impacts all US companies and persons as well as foreign companies and persons if they issue securities on a US Exchange or otherwise engage in activities in furtherance of a bribe in US territory. Importantly, in pursuing potentially unlawful acts under the FCPA, the US Department of Justice has adopted an expansive definition of what it means to be committing an act of bribery in the US and has interpreted it to catch the transfer of money through US bank accounts including, potentially, all US dollar transactions that are cleared through bank accounts in the US.
 
The FCPA also contains a books and records provision requiring issuers to make and keep accurate books, records and accounts, which, in reasonable detail, accurately and fairly reflect the issuer’s transactions and disposition of assets. In addition, the FCPA’s internal controls provision requires issuers to devise and maintain reasonable internal  accounting controls aimed at preventing and detecting FCPA violations. These provisions apply to all companies, both US and non-US, that have their securities issued on a US exchange. They are expansive provisions and have been used to prosecute companies in cases where bribes have been paid to private individuals. 
 
The UK Bribery Act 2010 (the “Bribery Act”) covers bribery of private persons as well as public officials. It also has extra-territorial application. For example, the Bribery Act prohibits offering or accepting a bribe outside the UK provided that the offender has a close connection with the UK. Persons with a “close connection” include British citizens and  organisations incorporated in any part of the UK. Similarly, the Bribery Act’s corporate offence – which occurs when an organisation fails to prevent those performing services on its behalf from paying bribes – applies not only to organisations incorporated under UK law, but also to any other company carrying on a business, or part of a business, in the UK, regardless of where the act of bribery takes place.
 
 






For further information, please contact:
 
Maurice Burke, Partner, Herbert Smith
 

 

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