On 19 March 2018, Singapore's Parliament ushered in a raft of criminal justice reforms, including the significant introduction of a deferred prosecution agreement ("DPA") regime. This is a major legislative development and is indicative of the concrete steps taken by Singapore to enforce corporate liability for corruption, money laundering and related offences.
Multinationals headquartered or operating in Singapore should be aware of this bold move by the Singapore regulators towards recognising corporate criminal liability and must take proactive compliance measures to ensure a culture of zero tolerance against corporate malfeasance.
The Singapore DPA regime
DPAs are voluntary agreements entered into between prosecutors and corporates to avoid prosecution for certain offences, in exchange for compliance with prescribed conditions.
Singapore has considered introducing DPAs for some time. The recent multi-jurisdictional corruption case into Keppel Offshore & Marine Ltd, concluded in December 2017, and comments made by the Law and Home Affairs Minister in January 2018 indicate that, in line with movements by international regulators, Singapore has accelerated their introduction.
The key points to note regarding DPAs in Singapore can be summarised below. They are:
- Only available for specific offences including corruption, money laundering and receipt of stolen property offences (but not cheating or fraud offences);
- Only available for corporate offenders represented by counsel;
- Not available to individuals;
- Fully voluntary;
- To be approved by the Singapore High Court, and only if:
- the DPA is fair, reasonable, proportionate; and
- in the interests of justice;
- To contain conditions which a company needs to comply with over a specified period of time, including:
- Co-operating in investigations;
- Assisting with identifying individual wrongdoing within a corporation;
- Implementing a compliance regime, including appointment of monitors;
- To contain penalties such as paying a financial penalty, disgorging profits, compensating victims, donating to charity and reimbursing the costs of prosecutors; and
- To contain a date, a charge, a statement of facts and to be generally published.
A global perspective
DPAs have begun to trend around the world as regulators try to encourage self-reporting by corporates wishing to avoid prosecution. The DPA framework in Singapore appears to largely track international precedents. Australia and Canada plan to introduce DPA regimes this year or next. France saw its first DPA agreed with HSBC in November 2017. The UK Serious Fraud Office ("SFO") has now agreed four DPAs since their legislative introduction in 2014. Additionally, in the aforementioned Keppel case, Singapore authorities had agreed a de facto DPA in the form of a "conditional warning", alongside a DPA and leniency agreement agreed with the U.S. Department of Justice ("DOJ") and Brazilian Ministério Público Federal respectively, resulting in total fines of US$442 million. This is not to forget the long history of DPAs being agreed by the US authorities enforcing the Foreign Corrupt Practices Act ("FCPA") since 1977.
Individuals, individuals, individuals. Et tu, corporate?
The introduction of DPAs is a quantum shift for Singapore and its regulators. It is not entirely clear whether this was primarily prompted by momentum abroad (it does not appear DPAs were considered in the Summer 2017 public consultation on proposed criminal justice reforms), but we will eagerly await the realities of how strongly or consistently DPAs are deployed by Singapore regulators. In particular, there are still question marks around the likely conditions and penalties enforced; which corporates or industry sectors will be targeted, and whether this regime is purely intended to prosecute domestic cases or multi-jurisdictional cases in cooperation with international regulators such as the DOJ or SFO.
Singapore has until very recently espoused focusing prosecutions on individuals, and though entering into DPAs will still aim to root out criminal employee-individuals, there is now a clear framework for holding corporates accountable.
Guidelines about how the DPA regime will work in practice have yet to be published. However, the Keppel case indicated Singapore regulators' willingness to impose much larger fines than currently allowed under the Prevention of Corruption Act (S$100,000 per charge) and other related corruption and money laundering laws. We can therefore expect that guidelines on the DPA framework will be published, or alternatively further legislative reforms will be passed to give Singapore regulators' sufficient authority and procedural clarity to agree robust, high-value DPAs with corporates.