The standards of corporate governance play a major role in the maintenance of Singapore's reputation as a secure and established financial and business centre. Singapore is ranked first in Doing Business 2016 by the World Bank Group, and has been lauded for its high standards of corporate governance by the 2014 CG Watch, ranking first with Hong Kong. A number of regulatory bodies in Singapore are empowered to investigate and prosecute corporate misconduct:
a The Monetary Authority of Singapore (MAS) acts as the central bank of Singapore. The MAS is responsible for regulating and supervising the financial services sector, administering the Securities and Futures Act (SFA) and conducting surveillance on financial stability in Singapore. Pursuant to Part IX of the SFA, the MAS has powers to require the disclosure of information about securities and futures contracts, require the production and inspection of the books of companies, enter premises to carry out investigations and examine witnesses. In 2015, it was announced that the MAS and Commercial Affairs Department (CAD) of the Singapore police force will jointly investigate potential market misconduct offences such as insider trading and market manipulation under Part XII of the SFA.
b The Singapore Exchange Limited (SGX) acts as a frontline regulator to promote a fair, orderly and transparent marketplace and a safe and efficient clearing system through the monitoring of the continuing compliance of the Singapore Exchange Securities Trading Limited (SGX-ST) Listing Manual (the Listing Manual), as well as the review of listings applications. Enforcement of compliance with the Listing Manual by listed companies is performed through investigations by the SGX, with appropriate sanctions imposed for breaches.
c The Accounting and Corporate Regulatory Authority (ACRA) acts as the regulator of business entities, public accountants and corporate service providers in Singapore.
d The Competition Commission of Singapore (CCS) is tasked with administering and enforcing the provisions of the Competition Act (the Competition Act), which promotes competition in the markets. The CCS will take action against anticompetitive agreements, abuse of dominant positions, and mergers and acquisitions that substantially lessen competition. The CCS has the power to require the production of specified documents or information, enter premises without a warrant, and enter and search premises with a warrant, if the CCS has reasonable grounds for suspecting that the provisions of the Competition Act have been infringed.
e The Singapore police force has wide investigative powers pursuant to Part IV of the Criminal Procedure Code (CPC). In the course of its investigations, the police may issue written orders to summon any person within Singapore to attend and assist in investigations, failing which a warrant may be issued to order the attendance of that person. The police may also order the production or access to documents and other relevant evidence necessary or desirable to any investigation, and may search or apply for a search warrant in the event of non-compliance. The CAD is the principal department of the Singapore police force investigating white-collar commercial and financial crimes, and has similar powers. On 24 April 2017, the MAS and CAD announced the launch of a government-industry partnership to strengthen Singapore's capabilities in the fight against money laundering and terrorism financing.
f The Corrupt Practices Investigation Bureau (CPIB) operates with functional independence and is mandated to investigate corruption offences under the Prevention of Corruption Act (PCA) and other related offences. CPIB officers have wide investigative powers pursuant to the PCA and may exercise all of the powers in relation to police investigations given by the CPC in the course of the CPIB's investigations. Additionally, CPIB officers may, on the authorisation of the Public Prosecutor, investigate any financial account or safe deposit box in any bank.
g The Financial and Technology Crime Division (FTCD) of the Attorney-General's Chambers (AGC) is responsible for the prosecution and appeals of white-collar and other commercial crimes, including corruption cases investigated by the CAD and CPIB.
It is generally advisable for all businesses, corporate entities and individuals under investigation to cooperate fully with the authorities, and provide full and frank disclosure of material information. This is in view of the legislation in place to secure cooperation with many of the above authorities. For example, it is an offence under the SFA to refuse or fail to appear before the MAS and render assistance in investigations. Further, Chapter IX and Chapter X of the Penal Code specify further offences such as (1) failing to attend before; (2) failing to produce a document; or (3) furnishing false information to any public servant.
Singapore's legislative and regulatory corporate governance framework has shifted from a merit-based approach to a disclosure-based regime of supervision. Under a disclosure-based regime, market participants are provided better information, thus allowing greater choice and freedom to market participants to take calculated risks, which promotes a more dynamic market.
In order to be successful, a disclosure-based regime requires an effective and robust enforcement regime to ensure accurate disclosure of material information in order to maintain the confidence of market participants.
Companies listed on the SGX-ST are required to comply with the Manual on a continuous basis. Pursuant to Rule 703 of the Listing Manual, listed companies must announce any information known to it concerning itself, or any of its subsidiaries or associated companies that is (1) necessary to avoid the establishment of a false market in the securities of the listed company, or (2) would be likely to materially affect the price or value of its securities. Under Section 203 of the SFA, a listed company must not intentionally, recklessly or negligently fail to notify the SGX of information that is required to be disclosed under the Listing Manual. A breach of Section 203 of the SFA is not a criminal offence unless the failure to notify, if the company withholds disclosure, is intentionally or recklessly in non-compliance with Rule 703 of the Listing Manual. Section 331 of the SFA provides that directors may be prosecuted in their personal capacity for acts of the company provided that the non-compliance was committed with the consent or connivance of, or could be attributable to any neglect on the part of, the directors.
The Listing Manual is complemented by the revised Code of Corporate Governance 2012 (the CG Code 2012), issued by the MAS. Although compliance with the CG Code 2012 is not mandatory, listed companies are required under the Listing Manual to describe in their annual reports their corporate governance practices with specific references to the principles of the CG Code 2012. Where the company deviates from any guidelines of the CG Code 2012, the deviation must be disclosed together with an appropriate explanation. The CG Code 2012 is aimed at increasing accountability and transparency, and the amendments are related to matters such as director independence, board composition, multiple directorships, alternate directors and disclosure of remuneration. On 27 February 2017, the MAS announced that it had formed a Corporate Governance Council (the Council) to review the CG Code 2012. The Council will consider how the ‘comply-or-explain' regime under the CG Code 2012 can be made more effective. This includes ‘improving the quality of companies' disclosure of their CG practices and explanations for deviations' from the CG Code 2012.
In relation to competition law, the CCS has implemented a leniency programme to incentivise cartel members to come forward and inform the CCS of the cartel activities. To encourage self-reporting, a company stands to benefit from total immunity from financial penalties if the company is the ‘first in the door' to provide the CCS with evidence of the cartel activity before an investigation has commenced, and provided that the CCS does not already have sufficient information to establish the existence of the alleged cartel activity.
The company must also satisfy the following general conditions:
a it provides the CCS with all the information, documents and evidence available to it regarding the cartel activity;
b it grants an appropriate waiver of confidentiality to the CCS in respect of any jurisdiction where the applicant has also applied for leniency or any other regulatory authority which it has informed of the conduct;
c it unconditionally admits to the conduct for which leniency is sought and details the extent to which this had an impact in Singapore by preventing, restricting or distorting competition within Singapore;
d it maintains continuous and complete cooperation throughout the investigation and until the conclusion of any action by the CCS arising as a result of the investigation;
e it refrains from further participation in the cartel activity from the time of disclosure of the cartel activity to the CCS (except as may be directed by the CCS);
f it must not have been the one to initiate the cartel; and
g it must not have taken any steps to coerce another undertaking to take part in the cartel activity.
In this regard, two companies (Koyo Singapore Bearing (Pte) Ltd and DHL Global Forwarding) have avoided financial penalties for their involvement in international cartel activities under the leniency programme. Full immunity was granted to both companies when they reported on price fixing to the CCS.
If the company is not the first-in-the-door leniency applicant, but provides evidence before the CCS issues a proposed infringement decision, the company may still be granted a reduction of up to 50 per cent of the financial penalty, if the general conditions in (a) to (e) above are satisfied. In particular, the CCS had in its revised Guidelines on Lenient Treatment for Undertakings coming forward with information on Cartel Activity 2016 clarified that coercers and initiators of cartels may also apply for leniency and may qualify for up to 50 per cent discount in financial penalty.
The CCS has reportedly seen an increase in the number of leniency applications and has recently stated that antitrust enforcement remains a priority for the CCS, with bid-rigging cases in the pipeline.
ii Internal investigations
Generally, internal investigations are investigations that a company decides to carry out in relation to itself and into its own affairs. Internal investigations may be prompted by regulatory concerns, or complaints from third parties, or concerns raised by independent directors' and shareholders' inquiries.
Internal investigations usually involve the conducting of interviews with the employees, management and directors, and the collection and review of hard-copy documents and electronic files stored on various forms of media (e.g., e-mails, telephone records or other electronic transmissions). The involvement of external parties such as lawyers, forensic accountants, private investigators or computer experts may occasionally be required in internal investigations. During the course of its investigations, the company may be obliged to comply with its legal disclosure obligations (e.g., under the Listing Manual) and legal professional advice should be sought in this regard.
Depending on the seriousness and nature of the matter, the individuals being investigated may retain their own lawyers. If there are reasonable grounds to suspect that the investigations may lead to prosecutions, it is advisable to consider retaining lawyers at an earlier stage so that the statements given during the internal investigations that may be subsequently turned over to the police are given with the benefit of legal advice.
On the issue of maintaining legal professional privilege in the course of an internal investigation, the Court of Appeal considered the doctrine of legal professional privilege in light of significant developments at common law in the case of Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v. Asia Pacific Breweries (Singapore) Pte Ltd. The issue before the Court of Appeal was whether draft reports prepared and produced by an external accounting firm (and law firm) in respect of an internal investigation of Asia Pacific Breweries (Singapore) Pte Ltd's (APBS) internal control systems and procedures attracted both legal advice and litigation privilege. The internal investigation by APBS was prompted by a fraud perpetuated by a finance manager of APBS, who had obtained credit and loan facilities from banks, which brought the action against APBS to recover the monies after the fraud was uncovered. In the action, the banks sought specific discovery of the draft report.
On the issue of legal advice privilege, the Court of Appeal endorsed the decision of the Australian Federal Court in Pratt Holdings Pty Ltd v. Commissioner of Taxation, which held that whether privilege is accorded to documentary communications of a third party is dependent on the nature of the function the third party performed for the party that engaged it. Privilege will be accorded if the function was to enable the engaging party to obtain legal advice if required. This is as opposed to the nature of the relationship of the third party's legal relationship with the party that engaged it. The Court of Appeal stated that ‘the approach taken in Pratt Holdings is principled, logically coherent and yet practical and is also consistent with the reality of legal practice' and held that third-party communications could be covered by legal advice privilege, but it had to be demonstrated that the communications were made for the dominant purpose of obtaining legal advice.
On litigation privilege, the Court of Appeal set out the basic principles or requirements of litigation privilege as set out in Section 131 of the Evidence Act (the Evidence Act) (i.e., if the dominant purpose for which the legal advice had been sought and obtained was for the anticipation or contemplation of litigation, the advice concerned would be protected by litigation privilege). The Court of Appeal held that as litigation was ‘foremost in the mind' of APBS, and the dominant purpose of the draft reports was in aid of litigation at the time, litigation privilege applied to the draft reports.
The Evidence Act was amended in 2012 to extend legal advice privilege to communications with in-house legal counsel for the dominant purpose of seeking legal advice.
It should be noted that there are statutory exceptions to situations where legal advice privilege may be asserted over communications or documents. In particular, Section 128(2) of the Evidence Act expressly states that ‘any communications made in furtherance of any illegal purpose' or where ‘any fact observed by any legal counsel in an entity in the course of his [or her] employment as such showing that any crime or fraud has been committed since the commencement of his [or her] employment' are examples of such exceptions.
In respect of litigation privilege, the High Court held in Gelatissimo Ventures (S) Pte Ltd & Ors v. Singapore Flyer Pte Ltd that litigation privilege under Section 131 of the Evidence Act is subject to the same fraud exception as found in Section 128(2)(b) of the Evidence Act. This is despite the literal wording of Section 131 of the Evidence Act, which suggests that litigation privilege is an absolute privilege.
Although there is currently no general overarching legislation in Singapore specifically addressing whistle-blowing, certain programmes and specific legislation have been created or enacted that address this issue. An example of such a programme is the implementation of the CCS's leniency programme. The CCS encourages businesses that are a part of a cartel agreement or concerted practice, or a member of the general public who is aware of a cartel activity, to blow the whistle and provide information on cartel activity, and the CCS will keep the identity of whistle-blowers confidential. In appropriate circumstances, the CCS may also pay a monetary reward to informants for information that leads to infringement decisions against cartel members.
According to a press release by the CPIB, the CPIB received 808 complaints in 2016, an 8 per cent decrease from the 877 complaints received in 2015, out of which 118 of the complaints received were registered for investigation, as compared with 132 cases registered in 2015. On 9 January 2017, as part of the CPIB's ongoing anti-corruption efforts, the new Corruption Reporting & Heritage Centre (CRHC) began its operations. The CRHC was set up to enable people to make complaints discreetly and in a more accessible manner. The identity of such informants is protected under Section 36 of the PCA, which includes provisions that the complaint of an offence under the PCA shall not be admitted in any civil or criminal proceedings and no witness is obliged or permitted to disclose the name or address of any informer. The court is further obliged to redact or expunge any references to the name or identity of the informer that may be found in any document in evidence in order to protect the informer from discovery. Citing Section 36 of the PCA, the court has observed, in Dorsey James Michael v. World Sport Group Pte Ltd, that there is a compelling public interest consideration ever present in Singapore to encourage whistle-blowing against corruption.
The MAS has stated that supervision can only go so far in preventing corporate misconduct in the financial industry, and that the creation of a safe environment for whistle-blowing is necessary to build a culture of trust and strong values in the financial industry. In this regard, Guideline 12.7 of the CG Code 2012 provides that the company's audit committee ‘should review the policy and arrangements by which staff of the company and any other persons may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters', and the ‘existence of a whistle-blowing policy should be disclosed in the company's Annual Report, and procedures for raising such concerns should be publicly disclosed as appropriate'. Further, the Guidebook for Audit Committees (revised on 19 August 2014) also lays out guidelines on the implementation, conduct and review of whistle-blowing policies within companies. The guidelines for whistle-blowing policies recommend the protection of the identity of the whistle-blower, and provide for independence, objectivity and fairness of the investigation and resolution process.
The courts take a dim view against whistle-blowers who knowingly provide false information. In PP v. Mohd Ghalib s/o Sadruddin, the court imposed a deterrent sentence of six months' imprisonment against the accused for providing false information in a complaint to the CPIB. The court stated that the sentence was meted out as the correct signal must be sent so that like-minded individuals will think twice about blatantly lying about alleged conduct. It should be noted that the court took pains to emphasise that the decision should not apply to whistle-blowing ‘done in good faith, which is a helpful check and balance, and there should not be a chilling effect on such conduct'.
i Corporate liability
Generally speaking, corporate conduct as a whole is punishable. That said, as a legal entity, a company necessarily acts through its officers and servants. Hence, insofar as criminal liability is a concern, any corporate wrongdoing is likely to also involve the acts of particular individuals. These particular individuals may, apart from the company's liability, be themselves guilty of an offence or be subject to civil liability. There is no bar against criminal liability being imposed on both the company and its officers and employees, or civil liability being imposed on both the company and its officers and employees (subject to the principle of double recoverability).
A company can be subject to criminal liability for the conduct of its officers and employees. Under Singaporean law, a ‘person' is defined as including body corporates unless the contrary intention appears. Hence, insofar as a criminal statute purports to impose criminal liability on any person, a company can accordingly directly be held liable unless the criminal statute intends otherwise. This depends on the wording of the criminal statute in question. As a legal entity, a company necessarily acts through its officers and servants. Thus, a company may be subject to criminal liability for the conduct of its officers and employees in one of several ways.
First, a company may be guilty of a strict liability offence (i.e., an offence that does not require the prosecution to prove the existence of a guilty mind such as intention, knowledge, recklessness or knowledge). Where a company's employees have caused the commission of a strict liability offence, the company may be held liable as such.
Second, a company may also be guilty of an offence that requires the existence of a guilty mind. However, as a company, as a legal entity, has no physical existence and cannot have a ‘mind' of its own, the law imposes liability in such cases by attributing the actions and intentions of the relevant human persons as that of the company's. Under Singaporean law, criminal liability of a company may accordingly arise where an offence is committed in the course of the company's business by a person in control of its affairs to such a degree that his or her actions and intent are the actions and intent of the corporation - such person must be found to be the ‘directing mind and will' of the company. It is a question of mixed fact and law whether a person is to be found the ‘directing mind' and will of the company. Typically, persons who may be held to be as such will include ‘the board of directors, the managing director and perhaps in some cases other superior officers of [the] company [who] carry out the functions of management and speak and act as the company'.
Third, a criminal statute may expressly make a company liable for the acts of its officers and employees.
A company can also be subject to civil liability for the conduct of its officers and employees. A company may, in addition to its own personal liability for wrongs, also be liable for the tortious acts of its servants committed in the course of their employment under the doctrine of vicarious liability.
Generally speaking, corporate conduct as a whole is punishable. That said, insofar as criminal liability is concerned, any corporate wrongdoing is likely to also involve the acts of particular individuals. These particular individuals may, apart from the company's liability, be themselves guilty of an offence. There is no bar against criminal liability being imposed on both the company and its officers and employees.
There is generally no objection to a company and its employees being represented by the same counsel in the same matter where their interests are aligned. However, where in a particular case there arises a conflict or a risk of conflict between the interests of the company and the interests of the employee in respect of the matter, it is typically preferable that separate representation be sought as this would avoid the situation of the counsel having to discharge him or herself from acting for both the company and the employees.
The penalties that can be imposed depend on the nature of the liability (criminal or civil) and the specific statute in question.
Where a company is convicted of a criminal offence, the sanction is typically the imposition of a fine. However, depending on the offence in question, the courts may also impose additional sanctions including a compensation order.
The SFA further provides that the MAS may, in relation to certain prescribed offences under the SFA, bring an action in the courts (in lieu of prosecution) for an order for a civil penalty in respect of that offence. A civil penalty made by the courts under that statute will be payable to the MAS. If this is not paid, the MAS may enforce it as though it was a judgment debt due to it. Claimants who have suffered loss may also have a right to recover compensation.
Insofar as a business is a holder of regulatory licences, these licences may be subject to conditions or the authorising statutes under which they are issued may provide for their revocation in the event of contravention of those conditions or of a particular written law. The power to revoke a licence is usually a regulatory power that may not be contingent on a judicial finding of wrongdoing.
Finally, there may also be consequential penalties that flow from a conviction (or even in the absence of a conviction depending on the nature of the misconduct). For example, where the company in question is listed on the SGX-ST, the SGX is empowered under the Listing Manual to impose sanctions on the company such as a private warning, public reprimand, suspension of the trading of its securities, or even a de-listing of the company.
iii Compliance programmes
Unless specifically provided for under a particular statute, the existence of a compliance programme does not function as a legal defence to the commission of a criminal offence. That said, companies should, nevertheless, have in place reasonable compliance programmes. What is a reasonable compliance programme depends on the risk in question that it is intended to address and the costs involved and there is no hard and fast rule as to what any particular programme ought to prescribe. The existence of such compliance programmes may also lower the risk of breaches or the duration of any such breaches (which may affect the penalty that may be imposed on the company).
The existence of a compliance programme may also be relevant in one of two stages insofar as criminal charges levied or contemplated to be levied on the company are concerned. First, the existence of a compliance programme may be a relevant factor that a prosecutor may take into account in the exercise of their discretion whether to prosecute or continue to prosecute a company in respect of which a criminal offence has been disclosed. Second, the existence of a compliance programme may also be relevant after the conviction of the company as a mitigating factor insofar as the appropriate sentence or penalty to be imposed on the company is concerned.
It should also be noted that a compliance programme may assist the officers insofar as their liability is concerned in that it may allow them to show that the offence in question was not committed as a result of their consent, connivance or neglect.
iv Prosecution of individuals
Where there has been corporate wrongdoing, there is no bar against the authorities seeking to hold the particular individual liable under criminal law as well, whether in addition to liability on the part of the company or otherwise. Where an officer of a company, especially a senior officer, is accused of corporate wrongdoing, this will inescapably have reputational effects on the company, regardless of whether the company itself is also charged. How the company manages the continued relations with the individual in question should, therefore, be guided with such considerations in mind.
There is no obligation on the part of the company to terminate or discipline an individual who has been subjected to criminal investigation or charged with a criminal offence. That said, this is subject to the company's internal policies and the view that the company takes with respect to the individual's conduct. For example, most companies would have in place their own disciplinary or investigation procedures, which may apply where there have been allegations of wrongdoing against a particular employee. This is likely to be governed by the relevant employment agreement between the company and the employee (generally contained in an employment handbook that has been incorporated into the employment contract by reference). Where, for example, the evidence that is known to the company suggests there are grounds for taking disciplinary action or for terminating an employee's employment, the company may do so regardless of the outcome of the criminal investigation or prosecution against them.
Needless to say, the company should cooperate with the investigators insofar as they are legally obliged to do so. For example, the authorities may require that the company produce documents or information relevant to their investigations or require that witnesses (such as other employees of the company) attend to be examined. There is no bar against the company coordinating with the individual's counsel. This may be a course that the company may wish to take where, for example, the interests of the company and the individual are aligned.
There is also no legal bar against the company paying for the legal fees of the employee. It is also common for a company to purchase directors' and officers' insurance, which may indemnify the legal costs to be incurred by the individual director or officer subject to the criminal allegations. How such policies may operate, including the scope and extent of coverage, would depend on their precise terms.
i Extraterritorial jurisdiction
There is generally a presumption against the extraterritorial application of Singaporean criminal statutes. That said, specific laws have been enacted by the parliament of Singapore to extend the reach of particular Singaporean statutes beyond the Singapore's borders. Some key examples are discussed below.
Prevention of Corruption Act
The PCA, which is the principal anti-bribery statute in Singapore, expressly provides that it would apply extraterritorially to citizens of Singapore outside of Singapore. Section 37(1) of the PCA reads as follows: ‘The provisions of this Act have effect, in relation to citizens of Singapore, outside as well as within Singapore; and where an offence under this Act is committed by a citizen of Singapore in any place outside Singapore, he may be dealt with in respect of that offence as if it had been committed within Singapore.' Therefore, where a Singaporean citizen commits an offence within the meaning of the PCA outside of Singapore, he or she would be held liable as though it was committed within Singapore.
Terrorism (Suppression of Financing) Act
The Terrorism (Suppression of Financing) Act, which is one of the key pieces of anti-terrorism legislation, also contemplates extraterritorial application, providing at Section 34 that certain offences thereunder if committed outside Singapore would be deemed to be committed in Singapore and that the person in question may be charged, tried and punished accordingly, and, further, that in respect of certain other offences, where a Singaporean citizen commits them outside of Singapore they may be dealt with as though they were committed in Singapore.
Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act
Finally, the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), which is the principal statute criminalising money laundering, also contemplates extraterritorial application. This is clear from Section 3(3) and (5) of the CDSA, which respectively state that the Act ‘shall apply to any serious offence or foreign serious offence' and ‘shall apply to any property, whether it is situated in Singapore or elsewhere', as well as from Section 2(1), which defines ‘criminal conduct' and ‘drug dealing' as the doing of such acts ‘whether in Singapore or elsewhere'.
ii International cooperation
Mutual Assistance in Criminal Matters Act
The Mutual Assistance in Criminal Matters Act (MACMA) sets out the framework for mutual legal assistance between Singapore and other states in criminal matters. It allows the Singaporean authorities to provide assistance in relation to criminal investigations or proceedings to other states in respect of certain prescribed offences, without the need for a mutual legal assistance treaty between the requesting state and Singapore, on the basis of reciprocity. The assistance Singapore may provide to other states in respect of criminal matters under the MACMA includes:
a taking of evidence;
b production of documents;
c requesting the attendance of a person;
d requesting for the custody of a person in transit;
e the enforcement of a foreign confiscation order;
f search and seizure;
g locating or identifying persons; and
h service of process.
Between 2011 and 2014, Singapore complied with 132 of the 179 mutual legal assistance requests it received.
Additionally, Singapore is also a signatory to the Treaty on Mutual Legal Assistance in Criminal Matters among like-minded ASEAN Member States.
Extradition is possible and not uncommon in Singapore. The Extradition Act (EA) is the primary statute in Singapore which governs the extradition of fugitives to and from foreign countries. The EA applies in respect of any of the 40 ‘declared Commonwealth countries' or a ‘foreign State […] between which and Singapore an extradition treaty is in force'.
Extradition is allowed only where the fugitive has committed an ‘extradition crime' within the defined meaning of the EA. In the case of a declared Commonwealth country, this refers to an offence that is punishable with a maximum penalty of death or imprisonment for not less than 12 months and that is an offence described in the First Schedule to the EA. In the case of a foreign state, this refers to ‘an offence against the law of [… the] foreign State [where] the act or omission constituting the offence or the equivalent act or omission would, if [it had taken] place in or within the jurisdiction of Singapore, constitute an offence against the law in force in Singapore' and that is an offence described in the First Schedule to the EA.
Embodied in the definition of an ‘extradition crime' in the case of a foreign state is the requirement of double criminality. In considering whether the requirement of double criminality is satisfied, the Singaporean courts will apply what is known as the ‘conduct test' (i.e., the court will look at the conduct alleged against the fugitive and determine whether the conduct would have been criminal had it been committed within the jurisdiction of the requested state). In this regard, the Singaporean courts will not apply the ‘ingredients test', which requires strict correspondence or identity of the elements of the foreign offence and the elements of the local offence.
In addition to the above, various Singapore agencies are also parties to informal channels of cooperation with agencies of other countries.
The MAS is signatory to a number of bilateral and multilateral memoranda of understanding (MOUs). Separately, the Singapore police force is a member of INTERPOL, and has MOUs with, inter alia, the police forces of Australia, Brunei, Hong Kong and New York, and its Suspicious Transaction Reporting Office is also part of the Egmont Group of Financial Intelligence Units. Various other Singaporean agencies, such as the CPIB, Casino Regulatory Authority, and Central Narcotics Bureau, have their own informal bilateral relationships with their counterparts from other jurisdictions.
V YEAR IN REVIEW
Singapore's authorities have continued to actively investigate alleged and potential corporate misconduct in 2017.
On 30 May 2017, the MAS announced that it had completed its two-year review of banks involved in transactions relating to Malaysian state investor 1Malaysia Development Berhad (1MDB). The MAS's supervisory review of financial institutions involved in 1MDB-related flows had been described as ‘the most extensive anti-money laundering review to-date' in Singapore. In the 1MDB investigation, the MAS worked together with foreign regulators and coordinated its investigation with the AGC and the CAD in Singapore.
Following its 1MDB investigation, the MAS announced that it had imposed financial penalties on several banks in Singapore, and also issued prohibition orders against several individuals, banning them from providing any capital markets and financial advisory services, and taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital markets services or financial advisory firm in Singapore. These included lifetime prohibition orders against two individuals who were convicted and sentenced to jail in 2017 for various charges relating to 1MDB transactions, including failing to report potentially criminal transactions. Such lifetime prohibition orders are rarely issued, and underscore the serious approach that the MAS has taken towards conduct that is seen to undermine trust and confidence in Singapore's financial system.
In its announcement, the MAS also reiterated its commitment to work closely with foreign regulatory authorities in conducting investigations. The MAS emphasised that investigations were still ongoing into 1MDB-related transactions in other jurisdictions, and that Singapore would continue to render assistance to the foreign investigations where needed.
Singapore's authorities have taken steps to engage with financial industry participants in order to detect and identify risk areas for financial misconduct. In April 2017, the MAS and the CAD announced the formation of the Anti-Money Laundering and Countering the Financing of Terrorism Industry Partnership (ACIP), a government-industry partnership to strengthen Singapore's capabilities in dealing with money laundering and terrorism financing. The ACIP is intended to enhance the detection and mitigation of transnational risks arising from Singapore's position as an international financial centre and trade hub.
On 22 March 2017, a remisier was convicted and sentenced to jail for offences involving a scheme to defraud Contracts for Differences providers in Singapore. This was pursuant to the initiative that was commenced in March 2015, when it was announced that the MAS and the CAD would henceforth jointly investigate all potential market misconduct offences from the outset. This was the first conviction for market misconduct arising from an investigation jointly conducted by the MAS and the CAD.
Singapore has continued to safeguard its reputation as a country with zero tolerance for corruption. Private sector cases continued to form the majority (85 per cent) of all the cases registered for investigation for corruption-related offences. In its press release dated 12 April 2017, the CPIB noted that jail sentences were meted out to the majority of private sector employees who were convicted for corruption-related offences, and that a conviction rate of 100 per cent had been attained for corruption-related offences in 2016.
The CPIB had identified two sectors of particular concern, which are likely to be areas of focus for the bureau's future investigations:
a maintenance work (e.g., inspection of electrical equipment, removal of copper cables, cleaning and water-proofing services); and
b wholesale and retail businesses (e.g., purchase and supply of fire safety, electrical and mechanical equipment).
On 6 June 2017, the CPIB officially opened its Corruption Reporting and Heritage Centre. In his speech during the Centre's opening, Singapore's Prime Minister reiterated Singapore's firm stance against corruption, and emphasised that the Singapore authorities would investigate any case of potential corruption that is flagged.
VI CONCLUSIONS AND OUTLOOK
It is expected that Singapore's authorities will continue to deploy significant resources towards criminal and regulatory investigations. In particular, after having achieved the highest-possible conviction rate of 100 per cent for corruption-related offences in 2016, it is anticipated that the CPIB and the AGC will spare no effort in pursuing Singapore's zero-tolerance stance on corruption.
1 Jason Chan, Vincent Leow and Daren Shiau are partners at Allen & Gledhill LLP.
6 FATF Anti-money laundering and counter terrorist financing measures: Singapore: Mutual Evaluation Report (September 2016).
7 These include banking, securities and commodities regulators in the United States, United Kingdom, Malaysia, Brunei, China, Myanmar, Australia, and the United Arab Emirates.
8 This includes the International Association of Insurance Supervisors and the International Organization of Securities Commissions.
9 This grouping consists of 152 FIUs, which include both national-level and local-level FIUs.