Jurisdiction - Singapore
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Singapore – GSK, What You Need To Know About Bribery Laws In The PRC And Singapore.
3 August, 2013

Legal News & Analysis – Asia Pacific – Singapore – Regulatory & Compliance


British pharmaceutical giant GlaxoSmithKline (GSK) is currently the subject of a major investigation by Chinese authorities for allegedly paying RMB3 billion (nearly US$500 million) in bribes to doctors and government officials to boost sales and raise the price of its drugs. It has been reported that 4 detained GSK executives have since confessed to violating Chinese anti-bribery and tax laws. If substantiated, GSK would join other multinational companies such as Carrefour, Siemens, Morgan Stanley and IBM which have in the past been implicated for corruption and bribery in the PRC.


In light of the GSK scandal, this article aims to provide an overview of the anti-bribery legislation in the PRC as well as Singapore.




The 2 key anti-bribery laws in the PRC are the Criminal Law of the PRC (Criminal Law) and the Anti-Unfair Competition Law of the PRC (AUCL). 


Official Bribery


The Criminal Law defines a bribe as money, property in kind or any economic interest that can be calculated in monetary value, provided in return for inappropriate interests and illegitimate benefits. 


An offence of official bribery is committed where the party paying the bribe has given articles of property to state functionaries in order to seek illegitimate benefits and where the party receiving the bribe is a public official or entity of the PRC (Official Bribery). The term “state functionaries” is widely defined in Article 93 of the Criminal Law toinclude not only public officials, but also employees in state-owned enterprises and other state institutions and persons who perform public services authorised by the State. Sanctions imposed for committing the offence of Official Bribery range from short-term criminal detention up to life imprisonment, depending on the amount of the bribe, as well as the confiscation of property and levy of fines.


Commercial Bribery


Private individuals and companies which commit acts of bribery (Commercial Bribery) can face both civil and criminal sanctions.


Article 8 of the AUCL widely defines Commercial Bribery based on whether the purchase or sale of products is conducted in a manner which excludes competition. The civil penalty imposed on individuals and companies alike for committing Commercial Bribery under the AUCL are fines ranging from RMB10,000 to RMB200,000, and the confiscation of such illicit gains.


Under the Criminal Law, individuals including officers and employees of  a company responsible for perpetrating Commercial Bribery may face penalties of up to 10 years and fined. Such company, being the employer of the perpetrators, could also be fined.


It is noteworthy that where a crime is committed on behalf of a company resulting in a benefit or gain of illegal proceeds for such company, the PRC legal framework imposes corporate liability on companies for the acts of their subsidiaries, employees and third parties. Case in point, the Interim Regulations of the State Administration for Industry and Commerce (SAIC) on Prohibition of Commercial Bribery issued by the SAIC explicitly provide that the conduct of Commercial Bribery by the staff of a business operator for the purpose of sale or purchase of commoditiesshall be regarded as the conduct of the business operator.


Thresholds for Criminal Sanctions


Pursuant to the Guidelines for Bribery Prosecution Standards issued by the Supreme People’s Procuratorate on 22 December 2000, the trigger of criminal liability under the Criminal Law is subject to (i) in the case of an individual, the bribe being at least RMB10,000; or (ii) in the case of a company or entity, the bribe being at least RMB200,000. The foregoing exceptions however do not apply to Official Bribery where bribes are offered to more than 3 government officials, bribes are paid to public officials in particular members of the judiciary, or the bribes have causedsevere damage to national or social interests.


Mitigated Sentences and Waivers for Voluntary Confessions


The Interpretation of the Supreme People’s Court and the Supreme People’s Procutorate of Several Issues Concerning the Specific Application of the Law in the Handling of Criminal Bribe-Giving Cases (Interpretation) which came into force on 1 January 2013, introduced the concept of voluntary confession to corporate perpetrators, affording them the opportunity to confess their criminal conduct in exchange for (i) in the case where the confession is made prior to prosecution, a mitigated punishment or a waiver of punishments, subject to certain exceptions; and (ii) in the case where the confession is made post-prosecution, leniency in sentencing.




The primary Singapore statutes prohibiting bribery are the Prevention of Corruption Act (PCA) and the Penal Code (Sections 161 to 165) (Penal Code). The PCA contains provisions which prohibit bribery for both private commercial activities and public officials, while the provisions in the Penal Code focus on the bribery of public officials of the Singapore government. The provisions set out in the PCA refer to the offer and receipt of gratification, which includes money or any gift, loan, fee, reward, commission, valuable security or other property or interest in property; any office, employment or contract; any part or full payment, release from or discharge of any obligation or other liability; and any other service, favour or advantage of any description whatsoever. Relative to the definition of a bribe by the PRC’s anti-bribery regime, Singapore has an unequivocally wider-ranging definition of the same. 


It is noteworthy that the PCA has extraterritorial effect, such that a bribery offence committed outside Singapore by a Singapore citizen will still be caught by the PCA. Additionally, both individuals and companies can be held liable for bribery pursuant to the PCA or Penal Code.




Companies operating in the PRC have traditionally taken domestic bribery laws of the PRC for granted due to a common perception that it is part of the PRC’s business culture. They have instead been concerned with taking necessary compliance measures to avoid the collateral cross border prosecutions which could ensue from extraterritorial laws such as the Foreign Corrupt Practices Act of the United States of America and the United Kingdom’s Bribery Act. The GSK scandal, viewed by many as a demonstration of political commitment by the PRC’s new leadership to crack down on institutionalised corruption, is a timely reminder for companies operating in the PRC of the need to adhere to the domestic bribery laws of the PRC with the same rigour as the foregoing extraterritorial laws.



For further information, please contact:

Lian Seng Yap, Partner, Stamford Law

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