Foreign bribery

Legal framework

Describe the elements of the law prohibiting bribery of a foreign public official.

There are no provisions in the  Prevention of Corruption Act (PCA) or the Penal Code that specifically prohibit bribery of a foreign public official. However, the general prohibition against bribery in the PCA, in particular on corrupt transactions with agents, read together with section 37 of the PCA, prohibits, in effect, the bribery of a foreign public official outside Singapore by a Singaporean citizen.

Section 37 of the PCA gives the anti-corruption legislation extraterritorial effect, because if the act of bribery takes place outside Singapore and the bribe is carried out by a Singaporean citizen, section 37 of the PCA states that the offender would be dealt with as if the bribe had taken place in Singapore.

Under section 5 of the PCA, it is an offence for a person (whether by himself or herself, or in conjunction with any other person) to:

  • corruptly solicit, receive, or agree to receive for himself, herself 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, or otherwise on account of:
    • 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 section 6 of the PCA for:

  • an agent to corruptly accept or obtain any gratification as an inducement or reward for doing or forbearing to do any act in relation to his or her principal’s affairs;
  • a person to corruptly give or offer any gratification to an agent as an inducement or reward for doing or forbearing to do any act in relation to his or her principal’s affairs; or
  • a person to knowingly give to an agent a false or erroneous or defective statement, or an agent to knowingly use such statement, to deceive his or her principal.

 

Section 4 of the Penal Code also creates extraterritorial obligations for all public servants of Singapore and states that any act or omission committed by a public servant outside of Singapore in the course of his or her employment would constitute an offence in Singapore and will be deemed to have been committed in Singapore. Accordingly, if the public servant accepted a bribe overseas, he or she would be liable under Singapore law.

Definition of a foreign public official

How does your law define a foreign public official, and does that definition include employees of state-owned or state-controlled companies?

As the PCA and the Penal Code do not specifically deal with the bribery of a foreign public official, the statutes do not define this term.

Gifts, travel and entertainment

To what extent do your anti-bribery laws restrict providing foreign officials with gifts, travel expenses, meals or entertainment?

To what extent do your anti-bribery laws restrict providing foreign officials with gifts, travel expenses, meals or entertainment?

There are no express restrictions in the PCA or Penal Code on providing foreign officials with gifts, travel expenses, meals or entertainment. However, any gift, travel expense, meal or entertainment provided with the requisite corrupt intent will fall foul of the general prohibition under the PCA, and would constitute an offence.

The PCA prohibits (among other things), the offer or provision of any ‘gratification’ if accompanied with the requisite corrupt intent. The term ‘gratification’ is broadly defined under the PCA to include:

  • money;
  • gifts;
  • loans;
  • fees;
  • rewards;
  • commissions;
  • valuable security;
  • property;
  • interest in property;
  • employment contract or services or 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 (see Public Prosecutor v Teo Chu Ha [2014] SGCA 45).

 

Under the Penal Code, the term ‘gratification’ is used but not expressly defined. The explanatory notes to the relevant section stipulate that the term is not restricted to pecuniary gratifications or those with monetary value.

Singapore’s courts have also held that questionable payments made pursuant to industry norms or business customs will not constitute a defence to any prosecution brought under the PCA (see Public Prosecutor v Soh Cham Hong [2012] SGDC 42) and any evidence pertaining to such customs will be inadmissible in any criminal or civil proceedings under section 23 of the PCA (see Chan Wing Seng v Public Prosecutor [1997] 1 SLR(R) 721).

Facilitating payments

Do the laws and regulations permit facilitating or ‘grease’ payments to foreign officials?

Neither the PCA nor the Penal Code expressly permits facilitating or ‘grease’ payments. This prohibition also applies to foreign officials. Such payments would technically constitute an act of bribery under the general prohibitions of both the PCA and the Penal Code. Notably, section 12(a)(ii) of the PCA prohibits the offer of any gratification to any member of a public body as an inducement or reward for the member’s ‘expediting’ of any official act, among other prohibited acts.

Payments through intermediaries or third parties

In what circumstances do the laws prohibit payments through intermediaries or third parties to foreign public officials?

Corrupt payments through intermediaries or third parties, whether such payments are made to foreign public officials or to other persons, are prohibited. Section 5 of the PCA expressly provides that a person can commit the offence of bribery either ‘by himself or by or in conjunction with any other person’.

Individual and corporate liability

Can both individuals and companies be held liable for bribery of a foreign official?

Both individuals and companies can be held liable for bribery offences, including bribery of a foreign official. The various provisions in the PCA and Penal Code set out certain offences that may be committed by a ‘person’ if such person were to engage in certain corrupt behaviour. The term ‘person’ is defined in the Singapore Interpretation Act to include ‘any company or association of body of persons, corporate or unincorporated’.

In addition, Singapore case law indicates that corporate liability can be imposed on companies for crimes committed by their employees, agents, etc (see Tom Reck Security Services Pte Ltd v Public Prosecutor [2001] 2 SLR  70). A test for establishing corporate liability is whether the individual who committed the crime can be regarded as the ‘embodiment of the company’ or whose acts ‘are within the scope of the function of management properly delegated to him’. This test, known as the ‘identification doctrine’, was derived from English case law (Tesco Supermarkets Ltd v Nattrass [1971] 2 All ER 127). It was subsequently broadened in the Privy Council case of Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, which held that the test for attributing mental intent should depend on the purpose of the provision creating the relevant offence. This broader approach has been affirmed in Singapore (The Dolphina [2012] 1 SLR 992) in a case involving shipping and conspiracy but not in the context of bribery offences.

However, the test for corporate liability is different in relation to money-laundering offences. Section 52 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) introduces a lower threshold of proof for corporate liability. It provides that where it is necessary to establish the state of mind of a body corporate in respect of conduct engaged by the body corporate it shall be sufficient to show that a director, employee or agent of the body corporate acting within the scope of his or her actual or apparent authority, had that state of mind. Likewise, any conduct engaged in or on behalf of a body corporate by a director, employee or agent of the body corporate acting within the scope of his or her actual or apparent authority, or by any other person at the direction or with the consent or agreement of the above, shall be deemed, for the purposes of the CDSA, to have been engaged in by the body corporate.

Generally, individual directors and officers of a company will not be held strictly liable for offences found to have been committed by the company if they were not personally responsible for, or otherwise involved in, that particular offence. However, section 59 of the CDSA provides that where an offence under the CDSA committed by a body corporate is proved to have been committed with the consent or connivance of an officer or to be attributable to any neglect on his or her part, the officer as well as the body corporate shall be guilty of the offence. It is also possible that an individual such as a director or officer of a company, although not personally guilty of committing a corrupt act, may be held liable for consequential offences including money-laundering or failure to report a suspicion that certain property or the transfer of assets was connected to criminal conduct. In addition, individual directors who ignore red flags of criminal misconduct committed by employees of the company may also find themselves liable for failing to use reasonable diligence in performing their duties under the Companies Act (Cap 50, 2006 Rev Ed). A former president of a shipyard was recently prosecuted for this infraction.

Ultimately, the decision on whether to pursue an individual or a corporate entity for criminal conduct is a matter of prosecutorial discretion. In this regard, an opinion-editorial written by Singapore’s then Attorney-General, Mr VK Rajah SC, in November 2015 sheds some light on Singapore’s approach on such matters. In his opinion-editorial, Mr Rajah stated that in Singapore both individuals and corporate entities should expect prompt enforcement action for financial misconduct. However, he pointed out that, ‘[t]he emphasis, if there is one, is placed on holding accountable the individuals who perpetuated the misconduct’. In addition, he stressed that ‘significant attention is also given to the culpability of corporations . . . especially if the offending conduct is institutionalised and developed into an established practice in an entity over time’.

In August 2018, the Penal Code Review Committee released its report setting out its recommendations on reforming the Penal Code. Among other things, the Committee considered the current rules on corporate liability under Singapore law and recommended that the government study the adequacy of the current rules and consider reform if necessary.

Private commercial bribery

To what extent do your foreign anti-bribery laws also prohibit private commercial bribery?

There are no provisions in the PCA or the Penal Code that specifically prohibit bribery of a foreign public official. The general prohibition against bribery in the PCA extends to both private commercial bribery as well as bribery involving public officials, whether domestic or foreign. 

Defences

What defences and exemptions are available to those accused of foreign bribery violations?

There are no specific defences and exemptions available to those accused of foreign bribery violations.

There is no statutory defence for bribery under the PCA, including for foreign bribery violations. In other words, in defending a bribery charge, the accused will be required to challenge the elements of the charge.

Agency enforcement

What government agencies enforce the foreign bribery laws and regulations?

The main government agency that enforces bribery laws in Singapore is the Corrupt Practices Investigation Bureau (CPIB). The CPIB derives its powers from the PCA and is responsible for investigating and preventing corruption in Singapore, focusing on corruption-related offences arising under the PCA and the Penal Code.

Under the PCA, the CPIB has extensive powers of investigation, which include powers 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. Seizable offences are also known as ‘arrestable offences’ (ie, offences where the persons committing the offences can be arrested without a warrant of arrest). Special investigative powers can be granted by the public prosecutor, such as the power to investigate any bank account, share account, purchase account, expense account or any other form of account or safe deposit box and to require the disclosure of all information, documents or articles required by the officers.

The CPIB carries out investigations into complaints of corruption but does not prosecute cases itself. It refers the cases, where appropriate, to the public prosecutor for prosecution. The PCA provides that no prosecution under the PCA shall be instituted except by or with the consent of the public prosecutor.

The Commercial Affairs Department (CAD) is the principal white-collar crime investigation agency in Singapore. CAD investigates complex fraud, white-collar crime, money laundering and terrorism financing. CAD’s Financial Investigation Division is specially empowered to combat money laundering, terrorism financing and fraud involving employees of financial institutions in Singapore and works closely with financial institutions, government agencies and its foreign counterparts. In January 2019, the Criminal Justice Division and Financial and Technology Crime Division were merged into a single Crime Division within the AGC to bring the prosecution of all criminal offences under a single division’s purview. However, there remain specialist prosecution teams within the reorganised Crime Division who specialise in the enforcement, prosecution and all related appeals in respect of financial crimes and corruption cases within and outside of Singapore.

The Monetary Authority of Singapore (MAS) is responsible for issuing guidelines on money laundering and terrorist financing to financial institutions and conducting regulatory investigations on such matters. The MAS may also refer potential criminal offences to CAD for further investigation. In this regard, in 2015, MAS and CAD embarked on an initiative to jointly investigate market misconduct offences under the Securities and Futures Act (Cap 289, 2006 Rev Ed). The MAS has also forged a closer relationship with the CPIB. Enforcement actions by the MAS have resulted in nine criminal convictions and S$11.7 million in civil penalties in the 18 months leading up to June 2020. The MAS has also imposed S$3.3 million in composition penalties for money laundering-related control breaches.

Patterns in enforcement

Describe any recent shifts in the patterns of enforcement of the foreign bribery rules.

Significantly, in January 2015, Singapore’s prime minister announced that the capabilities and manpower of the CPIB were to be strengthened by more than 20 per cent, as corruption cases had become more complex, with some having international links.

The Mutual Assistance in Criminal Matters Act was revised in July 2014 to improve Singapore’s ability to provide mutual legal assistance to other countries and demonstrates a commitment to cross-border cooperation. The amendments primarily ease requirements that foreign countries would need to satisfy to make requests for legal assistance and widen the scope of mutual legal assistance that Singapore can provide. In a related development, on 5 July 2017, the CPIB joined its counterparts from Australia, Canada, New Zealand, the United Kingdom and the United States in launching the International Anti-Corruption Cooperation Centre (IACCC). The IACCC will be hosted by the UK National Crime Agency in London until 2021. The IACCC aims to coordinate law enforcement action against global grand corruption. The CPIB has announced that it will be sending an officer to serve at the IACCC. Singapore’s participation in the IACCC is likely to result in Singaporean authorities taking a more proactive role in investigating foreign bribery cases with Singaporean links.

On 1 April 2019, the Serious Crimes and Counter-Terrorism (Miscellaneous Amendments) Act (the SCCT Act) came into force, which among other things, enhances the ability of Singapore authorities to share financial intelligence with financial intelligence units overseas. The SCCT Act amends the CDSA by allowing Singapore authorities to share information under an international arrangement (as opposed to sharing intelligence with countries with which Singapore has a bilateral arrangement), provided that there are safeguards to protect the confidentiality of information shared and control their use. Consequently, Singapore would be able to exchange financial intelligence with more than 150 financial intelligence units of overseas jurisdictions that are members of the Egmont Group.

In addition, the SCCT Act also introduced a new section 47AA to the CDSA that criminalises the possession or use, by an accused person, of property that would be suspected by a reasonable person of being benefits from criminal conduct, if the accused person cannot satisfactorily explain how he or she came by the property. This new offence would significantly bolster Singapore’s ability to combat grand corruption and foreign bribery, by allowing the authorities to prosecute the laundering of criminal proceeds from such illegal conduct through Singapore.

There is a trend of law enforcement agencies using anti-money laundering laws and falsification of accounts provisions (section 477A of the Penal Code) to prosecute foreign bribery cases. This is because it may be difficult to prove the predicate bribery offences in such cases, owing to the fact that key witnesses are often located overseas.

Prosecution of foreign companies

In what circumstances can foreign companies be prosecuted for foreign bribery?

Under the general offences of the PCA, foreign companies can be prosecuted for the bribery of a foreign public official if the acts of bribery are committed in Singapore. In addition, section 29 of the PCA read together with section 108A of the Penal Code allows foreign companies to be prosecuted for bribery that was substantively carried out overseas, if the aiding and abetment of such bribery took place in Singapore.

Sanctions

What are the sanctions for individuals and companies violating the foreign bribery rules?

The PCA provides for a fine, a custodial sentence, or both for the contravention of the general anti-corruption provisions under sections 5 and 6 (which include the bribery of foreign public officials in Singapore, and the bribery of foreign public officials overseas by a Singaporean citizen when read with section 37). The guilty individual or company may be liable to a fine not exceeding S$100,000 or imprisonment for a term not exceeding five years, if appropriate.

Where the offence involves a government contract or bribery of a member of parliament, the maximum custodial sentence has been extended to seven years. There are also civil remedies and penalties for the restitution of property pursuant to the PCA. A person convicted of an offence of bribery under the Penal Code may be sentenced to a fine and a custodial sentence of up to three years.

There are other statutes imposing sanctions on the guilty individuals or companies. For example, under the CDSA, where a defendant is convicted of a ‘serious offence’ (which includes bribery), the court has the power, under section 4, to make a confiscation order against the defendant in respect of benefits derived by him or her from criminal conduct. Under the Companies Act, a director convicted of bribery offences may be disqualified from acting as a director.

Recent decisions and investigations

Identify and summarise recent landmark decisions or investigations involving foreign bribery.

In December 2017, a Singapore-based company in the shipbuilding industry entered into a global resolution led by the US DOJ in connection with corrupt payments made to officials of a Brazilian state-owned enterprise, Petroleo Brasileiro SA (Petrobras), and other parties, to win contracts with Petrobras or its related companies. The company concealed these corrupt payments by paying commissions to an intermediary, under the guise of legitimate consulting agreements, who then made payments for the benefit of officials of Petrobras and other parties. Under the terms of the global resolution, the company entered into a DPA with the US DOJ and agreed to pay total criminal penalties amounting to US$422.2 million to the United States, Brazil and Singapore.

In Singapore, the company received a ‘conditional warning’ from the CPIB for corruption offences under section  5(1)(b)(i)  of the PCA and committed to certain undertakings under the ‘conditional warning’, including an undertaking to pay US$105.55 million to Singapore as part of the total criminal penalties imposed pursuant to the global resolution.

In addition, a former lawyer from the Singapore-based shipbuilding company drafted and approved contracts between the company and its Brazilian agent, knowing that the contracts were fraudulent and meant to conceal bribes to government party officials and members of the ruling political party. The bribes were disguised as consulting fees paid to intermediaries and helped the company secure rig-building deals. In 2017, the lawyer entered into a plea agreement with the US DOJ to assist in its probe against the company and its American unit. He pleaded guilty for conspiring to violate the anti-bribery provisions of the Foreign Corrupt Practices Act and was sentenced to a year’s probation, a fine of US$75,000 and a special assessment sum of US$100 by a US District Judge. He was allowed to serve his probation in Singapore, where he resided.

In July 2018, a Singaporean woman, Sharon Rachael Gursharan Kaur, was sentenced to an imprisonment term of 33 months for her involvement in the largest bribery and fraud conspiracy in the history of the United States Navy. As a lead contract specialist employed by the US Navy, Kaur received more than SG$130,000 in cash and luxury vacations for leaking confidential information to a Malaysian defence contractor, Leonard Glenn Francis. The case – known as the ‘Fat Leonard scandal’ – involved Francis bribing US Navy personnel so that they would provide him with inside information enabling his company in Singapore to secure lucrative contracts and overcharge for goods and services, defrauding the US Navy of about US$35 million. Kaur leaked information linked to 16 US Navy contracts to Francis, of which 11 contracts worth a total of approximately US$48 million were awarded to his company. The information she provided included pricing strategies, price information of competitors and questions that were posed by the contracts review board to these competitors. On appeal by the Prosecution, the High Court increased Kaur’s imprisonment term to 40 months. The High Court considered that such cases threaten Singapore’s international reputation for incorruptibility and run contrary to Singapore’s obligations and efforts to combat transnational corruption. Further, although Kaur argued that she was merely a civilian employee of the US Navy, and thus not a public official, officer or servant in the Singapore context, the High Court found nevertheless that there was the aggravating factor of corruption of a foreign public official. The High Court held that the involvement of a person in the employment of a foreign government constitutes foreign public sector corruption, and it did not matter that the person was a civilian employee, as opposed to one in uniformed service.

In October 2020, a US investment bank entered into a DPA with the US DOJ, which provided for a global resolution, involving Singapore authorities, in relation to a transnational money-laundering investigation linked to a Malaysian state investment fund. As part of the DPA, the Singapore subsidiary of the US investment bank was to pay US$122 million to the Singapore government for its role involving bond offerings related to the investment fund. This payment was to be made pursuant to a 36-month ‘conditional warning’, in lieu of prosecution, served on the bank’s Singapore subsidiary by the CAD for three counts of corruption offences punishable under section 5(b)(i) of the PCA. The CAD had previously conducted investigations into the Singapore subsidiary and two of its former managing directors, in relation to the bond offerings underwritten by the bank for the subsidiaries of the state investment fund.

Under this ‘conditional warning’, the bank’s Singapore subsidiary would also be required to cooperate with the CAD in its investigations related to the investment fund and comply with the terms of the DPA. The DPA further required the Singapore subsidiary to disgorge the sum of US$61 million – a fee representing what had been earned by the subsidiary from the bond offerings – to the Malaysian authorities. In a related matter, the MAS ordered the bank’s Singapore subsidiary to appoint an independent external party to conduct a review of its remedial measures.

The sum of US$122 million is the largest payment made by any financial institution to the Singapore government to date to resolve matters arising out of alleged criminal conduct.

In January 2021, siblings Teo Chu Ha and Judy Teo Suya Bik were sentenced to jail for conspiring to secure tenders for two companies in China, in exchange for bribes amounting to S$ 2.3 million. The offences were committed in China between April 2007 and November 2010. Teo Chu Ha was a former senior director of logistics at Seagate Technology International (Seagate) and had used his position in the company, and also his position as a member of the committee awarding the tenders, to obtain confidential information belonging to Seagate. His sister, Judy Teo, then used the information to help two Chinese transport companies obtain tenders awarded by Seagate. In exchange, Judy Teo would receive a 10 per cent 'commission' on the revenue the Chinese transport companies earned based on payments made by Seagate. The siblings were also convicted of dealing with the benefits of criminal conduct, as Teo Chu Ha had transferred S$ 700,000 – which formed part of the bribes – from his sister’s bank account to his own. The monies were later used to purchase a property in Singapore under Judy Teo’s name. Teo Chu Ha was sentenced to four years and two months’ imprisonment, while Judy Teo was sentenced to three years and five months’ imprisonment. Judy Teo was also ordered to pay more than S$ 2 million – the amount she received – as a penalty. She will be required to serve an additional 18 months’ imprisonment if she is unable to pay this penalty. Teo Chu Ha and Judy Teo were convicted of the offences under the PCA even though the offending conduct took place in China because the PCA has extraterritorial jurisdiction over Singapore citizens whose corrupt acts overseas will be prosecuted as if they were committed in Singapore. The CPIB reportedly worked closely with Chinese authorities, such as the Shanghai City Zhabei District People’s Procuratorate, as part of an investigation into the offences committed overseas, and received evidentiary records such as bank statements, and assistance in interviews and statement-taking under the mutual legal assistance framework spanning several years.