Foreign bribery

Legal framework

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

There are no provisions in the 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 Singaporean law.

The extraterritorial effects of the PCA and Penal Code are limited in the respect that they only apply to Singapore citizens and Singapore public servants respectively. In Public Prosecutor v Taw Cheng Kong [1998] 2 SLR 410, a case involving a constitutional challenge to the extraterritoriality of section 37 of the PCA, the court upheld the provision and concluded that it was ‘rational to draw the line at citizenship and leave out non-citizens, so as to observe international comity and the sovereignty of other nations’. The court further observed that the language of the provision was wide and ‘capable of capturing all corrupt acts by Singaporean citizens outside Singapore, irrespective of whether such corrupt acts have consequences within the borders of Singapore or not’.

As regards non-citizens committing corruption outside Singapore that could cause harm in Singapore, the court opined that section 29 of the PCA, which deals with the abetment of a corrupt act abroad, could be wide enough to address that scenario.

The CDSA, which primarily deals with the prevention of laundering of the proceeds of corruption and other serious crimes, also has extraterritorial application. The CDSA expressly applies to property whether situated in Singapore or elsewhere. In particular, section 47 of the CDSA provides that any person who knows or has reasonable ground to believe that any property represents another person’s benefits from criminal conduct is guilty of an offence if he or she conceals, disguises, converts, transfers or removes that property from the jurisdiction for the purposes of assisting any person to avoid prosecution. Criminal conduct is defined to include any act constituting a serious crime in Singapore or elsewhere.

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?

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] SGCA45).

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 monetaryvalue.

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’ has been 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 PP [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 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). 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, MrRajah 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 overtime’.

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 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 theofficers.

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. 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 first conviction of market misconduct under the joint investigations arrangement was reported in March 2017.

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. This announcement follows the reorganisation of the Criminal Procedure Code (CPC) to the Financial and Technology Crime Division (FTCD), signalling an intent by the AGC to actively enforce and prosecute complex bribery offences, including cybercrime, committed outside Singapore that may involve foreign companies and foreign public officials.

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, when the amendments come into force, 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 introduces 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.

Public sector complaints and prosecutions remain consistently low due, in part, to the aggressive enforcement stance taken by the CPIB, as well as to the high wages paid to public servants that reduce the financial benefit of taking bribes as compared to the risk of getting caught. The majority of the CPIB’s investigations relate to the private sector, which for 2018 made up 88 per cent of its investigations registered for action. In its 2018 annual report, the CPIB highlighted two main areas of concern: (i) construction activities; and (ii) building maintenance work.

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 is often difficult to prove the predicate bribery offences in such cases, owing to the fact that key witnesses are often located overseas. An example of this approach can be seen in the prosecution of Thomas Philip Doerhman and Lim Ai Wah (the Questzone case), who were sentenced to 60 and 70 months’ jail respectively on 1 September 2016, for falsifying accounts under section 477A and money-laundering offences under the CDSA. Doerhman and Lim, who were both directors of Questzone Offshore Pte Ltd (Questzone), were prosecuted for conspiring with a third individual, Li Weiming, in 2010 to issue a Questzone invoice to a Chinese telecommunications company seeking payment of US$3.6 million for a fictitious subcontract on a government project in a country in the Asia-Pacific. Li was the chief representative for the Chinese company in that country. A portion of the monies paid out by the Chinese company to Questzone, pursuant to its invoice, was then subsequently redistributed by Doerhman and Lim to Li and the then prime minister of that Asia-Pacific country in 2010.

Even though no corruption charges were brought under the PCA against the parties, it is plainly conceivable that Questzone functioned as a corporate conduit for corrupt payments to be made. On the facts, some key witnesses were overseas- with Li having absconded soon after proceedings against him commenced. The use of section 477A and money-laundering charges under the CDSA allowed the prosecution to proceed against Doerhman and Lim as they only needed to prove that the invoice was false, in respect of the section 477A charge; and that the monies paid out pursuant to the invoice- which would be proceeds of crime or property used in connection with criminal conduct- were transferred to Li and the then prime minister of the Asia-Pacific country, in respect of the money-laundering offences.

The use of section 477A of the Penal Code was also employed in the case relating to a Singapore shipyard, which involved senior executives of the shipyard conspiring to bribe employees of its customers to obtain business from these customers. The bribes were disguised as bogus entertainment expenses that were paid out from petty cash vouchers as approved by the senior executives. It is pertinent to note that these senior executives did not carry out the actual payment of the bribes but had approved the fraudulent petty cash vouchers, which they knew did not relate to genuine entertainment expense claims.

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 inSingapore.

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 (Cap 50, 2006 Rev Ed), 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$422.2million 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 a statement on the resolution, Singaporean authorities pointed out that in deciding to issue a ‘conditional warning’ to the company, due consideration had been given to the company for its substantial cooperation (including the company’s self-reporting to Singaporean authorities for the corrupt payments) and the extensive remedial measures taken by the company thus far.

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. His probation will be served in Singapore, where he resides.

The issues faced by the Singapore-based shipbuilding company arose from a wider investigation by Brazilian authorities called Lava Jato or Operation Car Wash (see Brazil chapter). In this connection, in July 2019, a second Singapore-based offshore and marine company, Sembcorp Marine (SembMarine) reported that authorities had executed a search warrant on Estaleiro Jurong Aracruz Ltda (EJA), a Brazilian subsidiary of SembMarine. The search warrant was executed as part of the ongoing investigations relating to Operation Car Wash. SembMarine announced that EJA’s former president was facing ongoing criminal charges and was also being investigated.

In connection with the transnational money-laundering investigation linked to a Malaysian state investment fund, MAS ordered the closure of BSI and Falcon Bank for serious lapses in anti-money laundering requirements. Several other major banks in Singapore were also censured and fined for their role in the scandal. In connection with the investigation, several individuals have been charged in court. A former BSI banker, Yak Yew Chee, pleaded guilty to four criminal charges of forgery and failing to report suspicious transactions in November 2016. He was sentenced to 18 weeks’ jail and a fine of S$24,000. The trial of another former BSI banker, Yeo Jiawei, for witness tampering concluded on 22 December 2016. He was sentenced to 30 months’ jail at the time. He subsequently pleaded guilty to money laundering and cheating in July 2017 and was sentenced to four-and-a-half years’ jail- this would run concurrently with his earlier 30-month jail sentence. During the course of the trial, details emerged as to how the banker allegedly facilitated the flow of illicit funds through Singapore’s financial system. Falcon Bank’s branch manager, Jens Sturzenegger, was also prosecuted and sentenced to 28 weeks’ jail and a fine of S$128,000. Among other things, Sturzenegger was charged with consenting to the bank’s failure to file a suspicious transaction report to MAS. A total of S$29.1million in financial penalties have been imposed on eight banks for breaches of anti-money laundering requirements. Various individuals involved in the matter have also been sanctioned by MAS.

In June 2017, siblings Judy Teo Suya Bik and Teo Chu Ha were charged in Singapore for corruption-related offences allegedly committed in China between April 2007 and November 2010. Teo Chu Ha was a former senior director of Seagate Technology International. The siblings allegedly conspired to obtain bribes from Chinese transport companies as a reward for helping these companies secure contracts with Seagate Technology International. The siblings were also accused of one count each of an offence under the CDSA, in connection with a purchase of a condominium unit. Judy Teo and Teo Chu Ha were charged with the offences under the PCA even though the offending conduct allegedly took place in China because the PCA has extraterritorial jurisdiction over Singapore citizens.