DPA Framework for Money Laundering and Corruption in Singapore
- Posted by admin
- 17 May 2019
- Articles, Company Secretarial
Singapore has taken another step forward in the fight against money laundering and corruption. A landmark change to the country’s criminal justice system allows for Deferred Prosecution Agreements, better known as “DPAs” or voluntary alternatives to adjudication.
The aim of the new DPA framework is to improve corporate accountability for acts of corruption, bribery and money laundering.
How DPAs are Used as an Enforcement and Prevention Tools
On the enforcement end, DPAs can be used by prosecutors to hold companies accountable for their crimes. At the same time, a DPA can also be a powerful preventative tool, discouraging companies from engaging in unlawful conduct.
Essentially, a DPA is an agreement between a prosecutor and a corporate offender in which the corporate offender agrees to meet certain obligations in lieu of facing prosecution. These measures might include:
- Continued cooperation with a government investigation
- Monetary penalties
- Instatement of a corporate monitor
- Implementation of an improved compliance program
A DPA provides incentive for compliance. If the corporate offender does not meet the obligations set forth in the agreement, the company faces the threat of future prosecution.
Prosecutors are generally afforded wide discretion when creating these agreements, but a DPA may require judicial approval and oversight.
Singapore Enacts its Own DPA Framework for Money Laundering and Corruption
The Singaporean government announced that it would introduce its own DPA framework as part of the Criminal Justice Reform Act passed on March 19, 2018. The legislation enacted DPA provisions as part of the Criminal Procedure Code.
Singapore’s DPA framework is modeled on the UK scheme:
- Public Prosecutors may only enter into DPAs with respect to certain offenses, including money laundering- and corruption-related crimes.
- The law only applies to legal entitles. A Public Prosecutor may not enter into a DPA with an individual.
- DPAs will be subject to final approval by the Singaporean High Court, which must determine that the DPA’s terms are “fair, reasonable and proportionate,” and “in the interests of justice.”
- A DPA may require: implementation of a compliance program, unlimited monetary penalty, compensation to victims, ongoing cooperation with the Public Prosecutor in the investigation, and instatement of a monitor.
- The Singaporean High Court retains ongoing supervisory authority with regards to any changes to the DPA’s terms.
- Once approved, DPAs must be published and made accessible to the public. However, the Court retains the right to redact or postpone publications of DPA public notices if the Court believes it is “in the interests of justice, public safety, public security or propriety, or for other sufficient reason.”
Under the DPA framework, a company faces prosecution if it fails to adhere to the terms of the DPA.
The DPA regime applies to corruption offenses as well as money laundering and the receipt of stolen property. There are no statutory limits under the DPA provisions.
Under the DPA framework, companies may be compelled to pay financial penalties that are substantially higher than the maximum fine of S$100,000 under the Singapore’s Prevention of Corruption Act (PCA).
Sections of 5 and 6 of the PCA provide a maximum penalty of imprisonment not exceeding five years and a fine of S$100,000. The imprisonment term is increased to seven years if the offense involves the bribing of a Member of Parliament or member of a public body.
The Key Advantages of a DPA
Although we cannot yet determine the effects of Singapore’s DPA framework, these agreements – in general – do offer advantages.
DPAs allow law enforcement agencies to identify and prove corporate crimes through information gathered during the DPA process. This is, perhaps, one of the biggest advantages with DPAs, as corporate crimes can be difficult to establish or detect unless a whistle blower or someone “in the know” reports illegal activities to the authorities.
DPAs also save government funds and resources by avoiding lengthy legal proceedings. They encourage companies to engage in self-reporting of wrongdoings in hopes of avoiding prosecution.
Additionally, DPAs allow for the facilitation of compensation to victims of corporate crimes. Victims are generally able to receive their payouts more quickly and reliably.
Singapore’s DPA framework may deliver many of these advantages.
Implementing the DPA Framework
Singaporean prosecutors typically have a difficult time holding corporates accountable for criminal liability.
Under current corruption laws, prosecutors must prove that the employee is sufficiently senior to act as a “directing mind” of the company and ordered the alleged illegal activities. The new DPA framework would eliminate this need. Singaporean corporates will likely be facing increased regulatory scrutiny and enforcement.
While the Singaporean DPA framework borrows many features of the UK and U.S. models, it does have one unique feature: Singapore is not likely to publish prosecutorial guidelines for DPAs. This was stated during the second reading of the bill in the Singapore Parliament. The reason for this feature is that the Singaporean government wants to avoid having the guidelines be used as a “tool” to manipulate “the criminal justice system and escape punishment.”
With that said, it is believed that Singaporean prosecutors will apply some factors that are considered by anti-corruption enforcement agencies in other countries when determining whether a DPA is appropriate. This includes cooperation level, self-reporting, and remedial steps the company has taken to address breaches and compliance risks.
It is still unclear how much weight, if any, the Singapore courts will place on these factors when the terms of a DPA are being considered for approval.
The move by the Singaporean government to establish a DPA framework is part of a growing trend among many jurisdictions. It’s viewed as an effective alternative to resolving corporate criminal liability, particularly for economic-related crimes.
The DPA regime also highlights the recognition by Singaporean authorities of the need for greater corporate accountability for bribery and corruption. The move is consistent and supportive of the country’s “zero-tolerance” approach to these pressing issues.
The landmark change to Singapore’s criminal justice system comes after the country’s first major foreign corruption case involving Keppel Offshore & Marina Ltd. and its U.S. subsidiary. Keppel has agreed to pay a penalty of $422 million to resolve the corruption charges related to alleged bribes paid in Brazil. The terms of this penalty were laid out in a DPA with the U.S. Department of Justice.