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Towards the end of 2017, it was widely reported that Keppel Offshore & Marine (KOM) had reached a global resolution with authorities in the United States, Brazil, and Singapore for charges faced by it in respect of acts of bribery carried out by KOM's agents in Brazil. As part of this global resolution, KOM entered into a Deferred Prosecution Agreement (DPA) with the US Department of Justice and settlement agreements with the Attorney General's Chambers in Singapore and the Ministério Público Federal in Brazil.
Shortly after news of KOM's global resolution became public, Singapore's Minister for Home Affairs and Law K. Shanmugam announced on 15 January 2018 that the introduction of a DPA framework will be one of several proposed amendments to Singapore's Criminal Procedure Code. The proposed DPA framework, if introduced, would represent a significant addition to the enforcement tools available to Singapore prosecutors against companies, and comes at a time of heightened focus on anti-corruption and bribery prosecutions globally.
A DPA is an agreement entered into between an accused company and the prosecuting authority to defer, and eventually drop (or “settle”), criminal charges. The terms of a DPA often involve the accused company undertaking to fulfill various conditions in exchange for the prosecuting authority deferring prosecution for a defined period of time. Upon conclusion of the defined period of time, and provided that the company has fulfilled all of the conditions attached to the DPA, the prosecution will be discontinued.
The conditions that can be imposed under a DPA are many and varied. DPAs will almost invariably require the accused company paying financial penalties which may be far in excess of what the company may be liable to pay as a criminal fine. For example, KOM is required to pay an aggregate fine in excess of US$422 million under the terms of its DPA. Other conditions may include requiring the accused company to implement compliance programmes (or enhance existing ones), or cooperate with authorities (both local and foreign) on ongoing investigations.
The following general features of the proposed DPA framework have been announced to the public:
DPAs will be offered only to corporate offenders represented by counsel and are fully voluntary;
DPAs will contain, amongst other details, the statement of facts, expiry date, and relevant financial penalties; and
The terms of the DPA will need to be approved by the Singapore High Court which must be satisfied that the DPA is in the interests of justice and that its terms are fair, reasonable and proportionate. Upon approval, the terms of the DPA will be made public.
No other details on the proposed DPA framework have been provided at this time.
Historically, anti-corruption and bribery prosecutions in Singapore have often only been brought against individuals rather than companies. One possible reason for this is that the act of bribery is carried out by individuals, and there are significant legal challenges on the part of the prosecution in attributing the individual's act to the company for the purposes of securing a conviction. Upon the introduction of the proposed DPA framework, companies in Singapore will now be faced with the real possibility of official sanction.
Now is an opportune moment for companies to carefully evaluate the robustness of their existing compliance programmes and internal checks to ensure that their operations are carried out in a manner that is compliant with anti-bribery and corruption laws. Robust internal controls may also allow a company to detect illegal activity at an early stage and self-report. Experience in other jurisdictions have shown that self-reporting can often be a powerful mitigating factor in the company's favour and can lead to comparatively less harsh terms in a DPA. Robust internal controls can also hopefully prevent illegal activity within the company from escalating to a level where the option of a DPA is no longer made available to the company.
Amendments to the Criminal Procedure Code to implement the DPA framework in Singapore, among other revisions, are expected to be introduced later this year.
If you would like more information or to know how the changes may affect you and your business, please contact the following individuals:
07 March 2018
T +65 6416 3358
M +65 8139 1527
This publication is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Readers should take legal advice before applying the information contained in this publication to specific issues or transactions.
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