China passes amendments to its criminal law
The Standing Committee of the National People's Congress has passed proposed amendments to the Criminal Law of the People’s Republic of China on 29 August 2015. This is the ninth Amendment to the Criminal Law since it came into effect in 1997. The Amendment, which contains a number of changes with respect to bribery offences, will take effect from 1 November 2015. The Amendment introduces new bribe-giving offences to catch bribes paid to ex-government officials and bribes paid through relatives or other connections to government officials/ex-officials. It also imposes criminal fines as an additional penalty on individual bribe-givers and, in case of corporate entities that commit bribery offences, on certain individuals within the company responsible for the commission of the bribe-giving offences (under the current Criminal Law, these individuals generally do not face fines but rather face imprisonment or criminal detention). Under the Amendment, individuals who commit crimes (including bribery offences) that violate their professional obligations or position could face a 3-5 year ban from professional activities in addition to criminal penalties. Further, the Amendment provides for new sentencing criteria for government officials found guilty of accepting bribes (and embezzlement).
SAIC issues new circular on scrutiny of automotive industry
On 29 July 2015, State Administration for Industry and Commerce (SAIC) issued a new Circular on regulating the automotive sector. The Circular highlighted several illegal acts (including commercial bribery) as the focus of future inspection/enforcement actions of Administrations for Industry and Commerce (AICs) in the sector. The Circular specifically requires enhanced enforcement against commercial bribery that exists in certain transactions such as car loans, guarantees and second-hand car exchange, and pricing of car damage. The Circular also contains a schedule for the current round of inspection/enforcement. Local AICs will conduct this round of inspection/investigations between September and November 2015, pursuant to the focus of this Circular and the inspection plan tailored to illegal acts and improper business activities of local automobile sale and services enterprises. The Circular also requires the local authorities to further strengthen and standardise the regulatory measures in the automotive market after this round of enforcement.
Former vice-minister for environmental protection under investigation
Lijun Zhang, former vice minister of Ministry of Environmental Protection and member of the ministry’s Party group, is under investigation by the Central Commission for Discipline Inspection, China's anti-corruption watchdog, for serious violations of discipline and law. Mr Zhang allegedly traded power for money, and in particular, allegedly established a chain of inappropriate interest and used his power, among others, to interfere in policy-making, influence the bidding outcome of government contracts for the supply of equipment and services for vehicular emission monitoring, and to suppress market competitors.
Former executive of Shanghai-based retail giants convicted of corruption
In August 2015, Wang Zongnan was convicted of bribery and embezzlement by Shanghai No. 2 Intermediate People’s Court. Mr Wang was the former general manager of the state-owned Shanghai Friendship (Group) Co, operator of a chain of department stores in China, and chairman of its subsidiary Lianhua Supermarket Holdings Co, operator of one of China's biggest supermarket chains. Mr Wang was found guilty of having abused his position to take bribes worth around RMB2.69 million (US$ 423,000) in exchange for seeking benefits for others. He was also found guilty of having colluded with other executives in the company to embezzle public funds of around RMB195 million (US$ 30.7 million). Mr Wang was sentenced to 18 years in prison and ordered to return more than RMB12 million in illegal income. In addition, RMB1 million of his personal assets was seized. Before being investigated last year, Mr Wang was also the former chairman of Chinese state-owned food giant, Bright Food Group Co.
Wison Engineering and its chairman convicted of bribery in China
On 5 August 2015, Wison Engineering Ltd., a Chinese subsidiary of a Hong Kong-listed company (Wison Engineering Services Co., Ltd.), and Mr Hua Bangsong, the legal representative of the Chinese company and the controlling shareholder of the Hong Kong company, were convicted of a criminal offence of offering bribes by a Chinese court. The Chinese company was ordered to pay a fine of RMB30 million, and Mr Hua was sentenced to imprisonment for 36 months. Wison Engineering Services Co., Ltd. is an important supplier of several Chinese state-owned oil and gas companies.
People’s Bank of China Enters into Anti-Money Laundering Cooperation Arrangement with Macau’s Monetary Authority
In what will undoubtedly be seen as another step in Beijing’s effort in the battle against corruption and the proceeds of corrupt transactions, the Chinese central bank has entered into a cooperation agreement with Macau’s Monetary Authority that will result in additional levels of cooperation between the central bank and the Special Administrative Region’s financial regulator. To read our full e-bulletin please click here.
Louis Berger in bribery scandal
In July 2015, Louis Berger International Inc., a New Jersey-based construction management firm, admitted violating the Foreign Corrupt Practices Act by bribing foreign officials (including India, Indonesia, Vietnam officials) to win construction management contracts and agreed to pay a US$ 17.1 million criminal penalty. Two of the company's former executives also pleaded guilty. In India, Louis Berger was accused of bribing officials to win two major water projects in Goa and Guwahati respectively; the firm allegedly, through its employees and third party intermediaries, utilised cash disbursement forms and invoices which bore untrue descriptions for the services provided and concealed the nature of the bribe payments by miscategorising the payments as "commitment fee", "counterpart per diem", "marketing fee" and "filed operations expenses". In the same month, the Indian authority also started to probe into this bribery case, and a first information report (FIR) against several government officials and officials in Louis Berger was filed on 21 July 2015. So far, four individuals including a former minister of the Public Works Department, former vice-president of Louis Berger, a former government official who headed the water project in Goa and an alleged hawala dealer have been arrested in the case. The US government has said that it is prepared to disclose the names of the bribe takers to the Indian government if such information is requested. Indian authorities also plan to probe all deals that they have made with Louis Berger, according to sources in the chief minister's office.
Draft bill proposed to tackle bribery of foreign officials
On 27 August 2015, the Indian Law Commission submitted a draft bill on Prevention of Bribery to the Indian government, proposing to criminalise bribery of foreign officials and officials of international organisations. The draft proposes criminalising both the offence of active and passive bribery by foreign officials. It provides for liability of private companies for bribery of foreign officials conducted by their employees. Further, under the draft bill, a private company would also be liable where a person associated with it has committed the offence, unless it is able to show that it had adequate procedures in place to prevent such a violation.
Thailand tourism official charged with bribery
In August 2015, Thailand’s Office of Attorney-General (OAG) indicted former Tourism Authority of Thailand governor Juthamas Siriwan on charges of taking approximately US$ 1.4 million (50 million baht) in the form of a bribe from a US film-making couple in exchange for awarding them a US$ 1.7 million (60 million baht) contract to host the annual Bangkok International Film Festival between 2003 and 2005. The US couple were found guilty in a Los Angeles court in 2009 of having bribed Ms Siriwan to secure the contracts for the Bangkok International Film Festival and were convicted of FCPA violations and money laundering. In 2010, Ms Siriwan was charged in an indictment for money laundering and related offences in the US in respect of the conduct, but she was not extradited or tried in the US.
Trade ministry officials and an importer businessman under investigation for suspected corruption
The director general of foreign trade at Indonesia's trade ministry, Partogi Pangaribuan is being investigated on suspicion of taking bribes in relation to the granting of trade permits. Partogi was named as a suspect after US$ 42,000 in cash was found inside a desk in his office during a raid conducted in late July by investigators from Jakarta police's special crimes division relating to an investigation into the reasons of the notoriously long dwelling time (ie the average length of time a container spends in a seaport terminal) at the Tanjung Priok port. Two more officials, and an importer businessman who Indonesian police said acted as an intermediary between importers and officials, are also under investigation.
State prosecutor suspended for demanding bribes
The Sandiganbayan (a special court in the Philippines) has ordered the suspension of a state prosecutor from the Department of Justice. Diosdado B. Solidum, Jr, who faces bribery charges for allegedly demanding money from members of the Philippine Airlines Employees Association (PALEA) in exchange for the dismissal of the charges filed against the PALEA members. According to the complaint filed by the Office of the Ombudsman with the Sandiganbayan, in August 2013, Mr Solidum, demanded a total of P2.5 million (which was later lowered to P1.2 million) from more than 200 PALEA members who were facing a case filed by the Philippine Airlines Inc. (PAL) before the Pasay City Prosecutor’s Office. The case against Mr Solidum remains pending before the Sandiganbayan First Division.
Bribery scandal of Formosa Plastics
Formosa Plastics Group, a leading Taiwanese manufacturing conglomerate, has released a statement that 25 employees, including its president Lin Chen-jung, are suspected of taking bribes from a supplier that ultimately secured contracts with Formosa Plastics. After an internal investigation, some of the employees involved reportedly admitted violations of the company rules, and the company is said to be implementing disciplinary action. Lin has reportedly resigned for "personal reasons". The Bureau of Investigation under the Ministry of Justice is said to be investigating the case.
Court orders arrest of former Prime Minister and Commerce Minister on charges of corruption
On 27 August, an anti-corruption federal court in Pakistan issued a non-bailable arrest warrant against former Pakistan Prime Minister Yousuf Raza Gilani and former Commerce Minister Makhdoom Amin Fahim, after the Federal Investigation Agency had presented a charge sheet with 12 cases relating to the multi-million rupee scandal involving the Trade Development Authority of Pakistan.
Supreme Court upheld bribery conviction against former Prime Minister
The Supreme Court of South Korea has upheld the bribery conviction against Ms Han Myung-sook, a former South Korean prime minister (served in 2006-2007), who was found guilty and sentenced to two years in prison for taking around US$758,850 in bribes from a businessman in 2013 ruling by the Seoul High Court. The Supreme Court's ruling is final, and Ms Han has been sent to prison.
Vietnam working with Singapore to recover corrupt official's illegally obtained property
According to the Vietnam Government Inspectorate, Vietnam is working with Singapore to seize the assets of a former executive (Mr Giang Kim Dat) of the Vietnam state-owned shipbuilding giant Vinashin Ocean Shipping Co., Ltd who was involved in a corruption scandal at Vinashin that caused a loss of about US$43.5 million to the state budget. He also allegedly embezzled US$18.6 million at Vinashin. Despite the lack of a mutual judicial assistance treaty between the two countries, both countries are parties to the mutual criminal judicial assistance treaty among ASEAN countries which may be used to help coordination between the countries in tracking down and recovering assets acquired by criminals from their illegal activities. Further, both countries are parties to the United Nations Convention on Anti-Corruption which contains the foundations for cooperation and mutual assistance in regaining losses in corruption cases.