Business ethics and anti-corruption

140 Pages·2014·10.18 MB·English

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Business ethics
and anti-corruption
Asia Pacific laws
Norton Rose Fulbright
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Business ethics
and anti-corruption
Asia Pacific laws
A Norton Rose Fulbright guide
June 2014

Preface
Preface
We are pleased to present the latest edition of the Norton The global anti-corruption movement continues to gain
Rose Fulbright Guide to Business ethics and anti-corruption momentum and key jurisdictions in Asia Pacific are joining
Asia Pacific laws. The rapid and extensive developments in the campaign against corruption. It is of crucial importance
the anti-corruption landscape in the Asia Pacific region and for multinational companies to have a strong grasp of the
elsewhere in the world, as well as the growing importance fundamental features of the local laws in each jurisdiction
of certain jurisdictions, have rendered the publication of in which they operate, as well as the extraterritorial
this updated edition both timely and necessary. application of enforcement regimes around the world.
The purpose of this Guide is to provide legal, governance, We look forward to supporting you as you navigate the
risk and compliance practitioners who are interested in anti-corruption regimes in your business dealings in this
the region with an overview of anti-corruption regimes dynamic, entrepreneurial and exciting region.
and related laws in the Asia Pacific context. The sheer
diversity within Asia Pacific presents those who have Wilson Ang
regional responsibility with both complex and unique Partner, Singapore
Norton Rose Fulbright (Asia) LLP
challenges. We hope this Guide goes some way towards
meeting those needs.
This new edition of the Guide has an expanded coverage
which includes 19 chapters on Australia, Bangladesh,
Brunei Darussalam, Cambodia, China, Hong Kong, India,
Indonesia, Japan, Macau, Malaysia, Myanmar, New
Zealand, the Philippines, Singapore, South Korea, Taiwan,
Thailand and Vietnam.
The Guide also examines, within an anti-corruption
context, interlinked issues on anti-money laundering,
whistleblowing, extortion, data privacy, disclosure and
privilege in each of the jurisdictions surveyed.

Norton Rose Fulbright – June 2014 05
Business ethics and anti-corruption – Asia Pacific laws
Acknowledgements
The chapters on Australia, China, Hong Kong, Indonesia,
Singapore and Thailand have been provided by Norton
Rose Fulbright. We gratefully acknowledge the support and
assistance of the law firms which have kindly contributed to
the chapters on Bangladesh, Brunei Darussalam, Cambodia,
India, Japan, Macau, Malaysia, Myanmar, New Zealand,
the Philippines, South Korea, Taiwan and Vietnam. These
contributing firms are identified at the start of each chapter
and further contact details on the contributors are given at
the end of each chapter and the Guide.
06 Norton Rose Fulbright – June 2014
Contents
Introduction 09
Australia 15
Bangladesh 25
Brunei Darussalam 29
Cambodia 35
China 41
Hong Kong 49
India 57
Indonesia 65
Japan 69
Macau 73
Malaysia 79
Myanmar 85
New Zealand 91
Philippines 97
Singapore 103
South Korea 109
Taiwan 115
Thailand 121
Vietnam 127
Contacts 133
Contributing law firms 136
Business ethics and anti-corruption – Asia Pacific laws
Abbreviations
A number of abbreviations have been used throughout the guide. For ease of reference, they are as follows:
Institution/Convention/Legislation Abbreviation
Asia Pacific Group on Money Laundering APG
Asian Development Bank ADB
Bribe Payers Index 2011 BPI
Corruption Perceptions Index 2011 CPI
United States Department of Justice DOJ
Dodd-Frank Wall Street Reform & Consumer Protection Act 2010 Dodd-Frank Act
Financial Action Task Force FATF
Foreign Corrupt Practices Act FCPA
OECD Convention on ‘Combating Bribery of Foreign Public Officials’ OECD Anti-Bribery Convention
United States Securities and Exchange Commission SEC
United Kingdom Serious Fraud Office SFO
Transparency International TI
United Nations Convention against Corruption UNCAC
08 Norton Rose Fulbright – June 2014
Introduction
Introduction
For ease of jurisdictional comparison, each chapter in on Combating Bribery of Foreign Public Officials in
the Guide dealing with a specific jurisdiction is organised International Business Transactions 1997 (OECD Anti-
according to the following sections: Bribery Convention) which requires signatory countries to
criminalise the bribery of foreign public officials. The OECD
• Transparency International (TI) rankings Anti-Bribery Convention was signed on 17 December 1997
and entered into force on 15 February 1999. There are 34
• International anti-corruption conventions and inter- OECD Member countries and seven non-member countries
governmental organisations which have adopted this Convention.
• Key anti-corruption laws The OECD Anti-Bribery Convention requires that signatory
countries enact implementing national legislation that
• Features of bribery offences makes bribery and attempted bribery of foreign public
officials a crime, prohibits off-the-books accounts, false
• Compliance defence and mitigation documents and other actions aimed to hide bribery,
imposes effective, proportionate and dissuasive penalties,
• Facilitation payments and requires mutual legal assistance to be rendered to other
parties in their investigations and proceedings. The OECD
• Gifts and entertainment has established a peer review system whereby a Working
Group is tasked to monitor each adhering country’s
• Corporate liability for the acts of intermediaries compliance with the OECD Anti-Bribery Convention and
to assess the steps the country has taken to implement its
• Liability of individual directors and officers requirements in national law.
• Penalties Another important international framework agreement, the
United Nations Convention against Corruption (UNCAC),
• Enforcement agencies was adopted by the United Nations General Assembly on
31 October 2003 and came into force on 14 December
• Anti-money laundering laws 2005. It has a much higher rate of participation with 140
signatories. The UNCAC requires participating states to
• Whistleblowing implement legislation prohibiting the bribery of public
officials as well as persons in the private business sector.
• Data privacy It has a much broader scope than the OECD Anti-Bribery
Convention and includes, among others, anti-money
• Disclosure and privilege laundering provisions.
In respect of the monetary penalties that may be imposed in Within the regional context, the Asian Development Bank
the event of violation of the laws, we have sought to provide (ADB) and the OECD developed an initiative to combat
the figure in the local currency as well as in US dollars for corruption in Asia Pacific in 2001. The initiative led to
ease of comparison. The exchange rate we applied was that the development of an action plan of legally non-binding
prevailing on 1 May 2014. principles and standards towards policy reform which
participating governments of the Asia Pacific region
voluntarily committed to implement in order to combat
International anti-corruption regimes corruption and bribery. This came to be known as the ADB/
OECD Anti-Corruption Initiative for Asia and the Pacific.
One of the most important international anti-corruption A steering group was established in accordance with the
framework agreements is the Organisation for Economic initiative to review the progress achieved by regional
Cooperation and Development (OECD) Convention participating countries in implementing the action plan.
Norton Rose Fulbright – June 2014 09
Business ethics and anti-corruption – Asia Pacific laws
US and UK anti-bribery laws national securities exchange or are required to submit
annual filings to the SEC and their employees, officers,
The United States and United Kingdom anti-bribery laws directors, and agents; “domestic concerns” or individual US
merit specific consideration in the Asia Pacific context due residents or nationals and companies organised under the
to their broad extraterritorial reach and profound impact on laws of the US, and their employees, officers, directors, and
business conduct taking place around the world. agents; and to companies or individuals using US mail or
other means of US interstate commerce.
The US Foreign Corrupt Practices Act (FCPA) was passed in
1977 in the wake of the Watergate scandal and subsequent The FCPA prohibits corrupt payments made directly or
federal investigations uncovering illicit practices in both indirectly through intermediaries. The FCPA targets public
government and private businesses, including payments bribery and does not cover commercial bribery, although
to domestic and foreign government officials. The FCPA such conduct may violate other US statutes, such as the
contains two types of provisions: (a) anti-bribery provisions Travel Act.
which prohibit covered individuals and entities from
offering or making corrupt payments to non-US government The UK Bribery Act 2010, which came into force on 1 July
officials to obtain or retain business or a business 2011, was passed to replace a patchwork of antiquated
advantage; and (b) accounting and internal control anti-bribery laws in the aftermath of OECD criticism and a
provisions, which require companies to keep books and scandal involving the sale of arms to Saudi Arabia. The UK
records that accurately and fairly reflect the transactions Bribery Act has four separate offences. Section 1 prohibits
of the corporation and to devise and maintain a robust a person offering, promising or giving a financial or other
internal controls program. advantage to another person directly, or through a third
party to (a) induce or reward the improper performance
The FCPA provides two affirmative defences and one by that other person of a relevant function, or (b) where
exception. First, it is a defence if the relevant payment the person knows or believes that the acceptance of the
was lawful under the written laws of the non-US country. advantage offered, promised or given in itself constitutes
This is a very narrow defence, because it is interpreted to the improper performance of a relevant function or activity.
require an affirmative statement in the laws of the non-US Section 2 prohibits a person from requesting, agreeing
country that the type of payment contemplated would be to receive or accepting a financial or other advantage
lawful. Second, it is a defence to provide things of value in intending that, in consequence, a relevant function or
respect of reasonable and bona fide expenditures directly activity should be performed improperly. Section 6 creates
relating to the promotion, demonstration, or explanation a “standalone” offence for bribery of a foreign public
of a company’s products or services or the execution or official. Section 7 provides for a strict liability corporate
performance of a contract with a non-US government offence of failure by the “relevant commercial organisation
official or instrumentality thereof. As for the exception, to prevent bribery by persons associated with it” to obtain
“facilitating payments”, or small amounts paid to a non-US or retain business or to obtain or retain an advantage in the
government official to induce that, or another, official to conduct of business for that commercial organisation. In
perform or expedite a routine, non-discretionary act that he addition to the above, an ancillary offence under section 14
or she would otherwise be required to perform in the course states that if any of the general offences under sections 1,
of his or her ordinary duties, do not violate the FCPA. 2 and 6, of bribing another person, being bribed or bribing
Examples include obtaining permits or licences, providing a foreign public official, is committed by a body corporate,
police protection, mail pick-up and delivery, or providing any “senior officer” of that body corporate would be guilty
phone service, power and water supply. of the offence if it is proved to have been committed with
his or her consent or connivance. A “senior officer” is
The FCPA allows for both criminal and civil liability, and defined to include a director, manager, secretary or other
is enforced by the Department of Justice (DOJ) and the similar officer.
Securities and Exchange Commission (SEC). The FCPA
applies to: “issuers” who either have stock listed on a US
10 Norton Rose Fulbright – June 2014