Financial crime in Singapore: overview

A Q&A guide to corporate crime, fraud and investigations in Singapore.

The Q&A gives a high level overview of matters relating to corporate fraud, bribery and corruption, insider dealing and market abuse, money laundering and terrorist financing, financial record keeping, due diligence, corporate liability, immunity and leniency, and whistleblowing.

To compare answers across multiple jurisdictions, visit the Financial Crime Country Q&A tool.

This Q&A is part of the global guide to corporate crime, fraud and investigations law. For a full list of jurisdictional Q&As visit www.practicallaw.com/corporatecrime-guide.

Samuel Sharpe, Duane Morris & Selvam
Contents

Fraud

Regulatory provisions and authorities

1. What are the main regulatory provisions and legislation relevant to corporate or business fraud?

In Singapore, the main laws concerning fraud and related crimes are contained in:

  • The Penal Code (Chapter 224).

  • The Companies Act (Chapter 50).

  • The Income Tax Act (Chapter 134).

  • The common law.

Case law (from Singapore and other commonwealth jurisdictions adopting penal codes, in particular India and Malaysia) is relevant to the interpretation of the Penal Code, but is not a primary source of law.

 

Offences

2. What are the specific offences that can be used to prosecute corporate or business fraud?

Penal Code

Under the Penal Code there is not one specific offence of fraud. There are a number of offences that can constitute fraud in certain jurisdictions under the Penal Code:

  • Dishonest misappropriation of property (section 403, Penal Code). This offence is committed when a person dishonestly misappropriates or converts to that person's own moveable property. Conversion means appropriating the property of others and then making use of it (Durugappa v State of Mysore [1956] Cri LJ 630). Misappropriation means setting apart for or assigning to the wrong person or a wrong use (Sohan Lal v Emperor [1915] AIR All 380).

  • Criminal breach of trust (section 405, Penal Code). This offence is committed where a person has been entrusted with property (or is entrusted with any dominion over property) and:

    • dishonestly misappropriates or converts to that person's own use;

    • dishonestly uses or disposes of the property in violation of any direction of law prescribing the mode in which the trust is to be discharged;

    • dishonestly uses or disposes of the property in violation of any legal contract, (express or implied); or

    • wilfully allows any other person to do so.

  • Cheating (section 415, Penal Code). This offence is similar to fraud in a number of common law jurisdictions and is committed where a person, by deceiving another person, fraudulently or dishonestly induces that person to:

    • deliver any property to any person; or

    • consent to any person retaining any property.

  • A person also cheats where they intentionally induce another person (by deception) to do or omit to do anything that the person would not do or omit to do if the person had not been deceived, and which act or omission causes or is likely to cause damage or harm to any person in body, mind, reputation or property.

  • Dishonest or fraudulent disposition of property (section 421, Penal Code). This offence is committed where a person dishonestly or fraudulently removes, conceals or delivers to any person without adequate consideration, any property, intending to prevent the distribution of the property among the person's creditors.

  • Dishonest or fraudulent prevention of payment of a debt (section 422, Penal Code). This offence is committed where a person dishonestly or fraudulently prevents any debt or demands due, being made available to that person's creditors.

  • Dishonest or fraudulent execution of a deed of transfer (section 423, Penal Code). This offence is committed where a person dishonestly signs, executes or becomes a party to any deed or instruments that purports to transfer or subject to any charge, any property, or any interest, and which contains any false statement relating to the consideration of the transfer or charge, or relating to the person(s) for whose use or benefit it is intended to operate.

  • Dishonest or fraudulent removal or concealment of property or release of claim (section 424, Penal Code). This offence is committed where a person dishonestly or fraudulently conceals or removes any property of that person or any other person (or assists another in doing so) or dishonestly releases any demand or claim to which that person is entitled.

  • Forging documents (section 463, Penal Code). This offence is committed where a person makes a false document (or part of a document) with the intent to cause damage or injury to any person, or to cause any person to part with property, or enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed.

  • Falsification of accounts (section 477A, Penal Code). This offence is committed where an officer or employee wilfully and with intent to defraud, alters, conceals, mutilates or falsifies a document held by that person's employer.

  • Theft (section 378, Penal Code). This offence is committed where a person, intending to dishonestly take any movable property out of the possession of any person without that person's consent, moves the property in order to take it.

The offences can be committed by individuals (including officers of a company in their personal capacity) as well as companies and other legal entities (unless otherwise stated).

Persons (including companies) who attempt, abet and/or conspire to commit the above offences will also be guilty of offence(s) under the Penal Code.

Companies Act

The Companies Act includes offences for false accounting, which are applicable against directors of a company (sections 201(1A), (3), (3A), (3C) and 15, Companies Act). The offences can be committed by directors where a company's accounts do not give a true and fair view of the financial status of the company.

Tort of deceit

Companies or their officers can commit the tort of deceit and an action will arise when all of the following elements apply:

  • A person makes a factual misrepresentation, verbally or through their conduct.

  • The representation must be made with the knowledge that it is false; it must be wilfully false (or the person must have no belief in its truth or being reckless as to whether it is true).

  • The person intends it to be relied on by the recipient.

  • The recipient acts to his detriment in reliance on it.

  • The recipient suffers damage as a result.

Other causes of action that may be relevant where there has been fraudulent conduct include breach of fiduciary duty, breach of trust, dishonest assistance, conversion and restitutionary causes of action.

Income Tax Act

Under the Income Tax Act (section 96A(1)), a person is guilty of an offence if they wilfully with the intent to evade tax or assist another person to evade tax by omitting any income or make any false statement in an income tax return or give any false answer to any question or request for information under the Income Tax Act.

 

Enforcement

3. Which authorities have the powers of prosecution, investigation and enforcement in cases of corporate or business fraud? What are these powers and what are the consequences of non-compliance? Please identify any differences between criminal and regulatory investigations.

Authorities

In Singapore, the main authorities are the:

  • Commercial Affairs Department (CAD). The CAD is a branch in the Singapore police force and the principal white collar crime enforcement agency in Singapore. It has several specialist departments and groups focusing on specialised areas such as commercial fraud and financial fraud.

  • Monetary Authority of Singapore (MAS). The MAS conducts investigations and audits to ensure compliance with provisions and regulations under statutes such as the Securities and Futures Act (Chapter 289).It is also Singapore's central bank and body responsible for the regulation and supervision of financial institutions in Singapore.

Investigations are conducted by the main authorities with investigative powers such as the CAD and MAS. Decisions on whether a case is subject to civil penalty action or criminal prosecution will be made when investigations are concluded.

Prosecution powers

The Attorney General (AG) has the sole prosecution powers and has control, direction and discretion of prosecution of offences in Singapore. The AG discharges his responsibilities and duties through the Economic Crimes and Governance Division (EGD), which is responsible for all prosecutions in respect of financial crimes and corruption cases in Singapore.

Powers of interview

A person can be compelled by an investigator to assist in investigations. A warrant of arrest can be issued to secure attendance (section 21, Criminal Procedure Code (CPC), Chapter 68).

Powers of search/to compel disclosure

Under the CPC, the police can:

  • Compel the attendance of witnesses for interview.

  • Conduct searches without a warrant.

  • Search computer records.

  • Require the claimant and witnesses to put up a bond to attend court to give evidence against the accused.

Powers to obtain evidence

The investigator can issue orders to persons (individuals or companies) to produce any document or exhibit relevant to the investigation (section 20, CPC) and to seize them if necessary (section 38, CPC). If not complied with, the investigator can conduct a search at any place or premises, or apply to the court for a search warrant to retrieve any documents or exhibits (section 24, CPC).

Power of arrest

An arrest can be made without a warrant when the police reasonably suspect a man of committing a serious offence (section 17, CPC). Alternatively, a warrant can be made out to allow the police to make an arrest for a generally non-arrestable offence (section 16, CPC).

Criminal investigation and charging process

The charge is the first stage in the prosecution of a criminal offence. This stage is where the accused is informed that the offence will be tried. Criminal cases can be heard in the High Court, or in the Subordinate Courts. For trials in the High Court, the accused must first attend a hearing before a magistrate court where the charge must be read. The matter will then be heard in the High Court where the accused will enter a plea and the prosecution and defence cases will be heard.

The court conducting a criminal trial has the power to order the production of any document or material that is considered necessary for conducting an investigation, inquiry or trial or other court proceeding (section 235(1), CPC).

The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDTOSC) (Chapter 65A) contains further powers for investigating officers and the courts investigating serious criminal conduct (including fraud-related offences).

The court can order the production of certain material to an investigating officer. The court can also grant an officer entry to any premises, to obtain the material (sections 30 and 31, CDTOSC) (applicable to financial institutions). Financial institutions that comply with such an order must not be treated as being in breach of any restriction on the disclosure of information or material imposed by law, contract or rules of professional conduct (section 31(4), CDTOSC). The court can also order a warrant allowing the entry and search of premises (section 34, CDTOSC).

The court, on any conviction of certain serious offences, can make a confiscation order confiscating relevant assets (section 5, CDTOSC).

The court can make a restraint order to prohibit any person from dealing with any realisable property, subject to certain conditions and exceptions (section 16, CDTOSC) or a charging order on interests in realisable property (section 17, CDTOSC).

Persons who know or have reasonable grounds to suspect that any property represents or was used or is intended to be used in connection with serious criminal conduct must report that knowledge or suspicion to the relevant authorities (section 39, CDTOSC).

The investigatory powers under the CDTOSC apply to serious criminal conduct in Singapore and overseas (section 2, CDTOSC). The authorities can communicate information to foreign authorities, subject to certain conditions (section 41, CDTOSC).

Court orders or injunctions

Confiscation orders (sections 4(1) and 5(1), Corruption Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA)). In the event where an accused is convicted of one or more drug dealing and/or serious offences and on application of the Public Prosecutor, the court can make confiscation order against the accused if the court is satisfied that such benefits have been so derived.

Restraint orders (section 16, CDSA). Regardless of whether an accused is convicted, on application of the Public Prosecutor, the High Court can make a restraint order to prevent a person from dealing with any realisable property held by an accused charged with a drug dealing offence or a serious offence. A restraint order may apply to all realisable property held by a specified person, whether the property is described in the order or not.

Charging orders in respect of land, securities and so on (section 17, CDSA). On application of the Public Prosecutor, the High Court may make a charging order on realisable property for the purposes of securing payment to the government.

 
4. Which authority makes the decision to charge and on what basis is that decision made? Are there any alternative methods of disposal and what are the conditions of such disposal?

In the past, an initial assessment was made of whether the offence was likely to result in a civil penalty or criminal prosecution. The Monetary Authority of Singapore (MAS) would then take over and investigate all cases classified as "civil". Cases classified as "criminal" would all be passed to the Commercial Affairs Department (CAD) for investigation.

Since 17 March 2015, the MAS announced a new market misconduct enforcement regime, which came into force with immediate effect. The new regime will see the MAS and CAD jointly investigating all potential market misconduct cases at the outset. Decisions on whether a case is subject to civil penalty action or criminal prosecution will be made when investigations are concluded.

For criminal prosecution, the decision to charge is subject entirely to the discretion of the Attorney General (Article 35(8), Constitution of Singapore).

 

Conviction and sanctions

5. What are the sanctions for participating in corporate or business fraud?

Civil/administrative proceedings or penalties

The Monetary Authority of Singapore (MAS) regulates the financial services sector in Singapore, including banks, insurance companies, finance companies, securities or capital market services companies, licensed trust companies (among others). The MAS is governed by the Monetary Authority of Singapore Act (Chapter 186) (MAS Act).

The MAS has the power to issue binding directions and regulations to financial institutions where it considers it is in the public interest to do so (sections 27 and 28, MAS Act) to prevent money laundering or the financing of terrorism (section 27B, MAS Act). In general, the MAS has the power to conduct investigations, issue fines and revoke the operating licence of regulated financial institutions (section 28(5), MAS Act).

Criminal proceedings

Right to bail. An accused has a right to bail if the offence is a bailable offence. If the offence is non-bailable, bail is not available as of right although the court may exercise its discretion and offer bail.

Penalties. The following criminal penalties may apply to participating in corporate or business fraud:

  • Companies Act (sections 201(1A), (3), (3A), (3C) and 15). Fine up to S$50,000 (and/or two years' imprisonment in certain circumstances).

  • Dishonest misappropriation of property (section 403, Penal Code). Up to two years' imprisonment and/or a fine. Imprisonment term can be extended to three or seven years in certain cases.

  • Criminal breach of trust (section 405, Penal Code). Up to seven years' imprisonment or a fine, or both. Imprisonment term can be extended to 15 or 20 years in certain cases.

  • Cheating (section 415, Penal Code). Up to three years' imprisonment and/or a fine. Imprisonment term can be extended to five or ten years in certain cases.

  • Dishonest or fraudulent disposition of property (section 421, Penal Code). Up to three years' imprisonment and/or a fine.

  • Dishonest or fraudulent removal or concealment of property or release of claim (section 424, Penal Code). Up to three years' imprisonment and/or a fine.

  • Falsification of accounts (section 477A, Penal Code). Up to ten years' imprisonment and/or a fine.

  • Theft (section 378, Penal Code). Up to three years' imprisonment and/or a fine. Imprisonment term can be extended to seven or ten years in certain cases. The penalty can include up to three strokes of the cane in certain cases.

Civil suits

Parties suffering damages can initiate civil suits in respect of fraud cases to recover losses under the law of tort. The court also can issue injunctions to locate and preserve assets (among other remedies) pending trial. These can usually be obtained quickly.

Punitive damages are not available.

Under Order 15, Rule 12 of the Rules of Court, it is possible to bring a representative action (similar to a class action in the US), subject to the discretion of the court.

6. Are there any measures in place to safeguard the conduct of investigations? Is there a process of appeal? Is there a process of judicial review?

In Singapore, the main measures to safeguard the conduct of investigations are as follows:

  • Voluntariness rule (section 258(3), CPC). Statements from accused persons are inadmissible if they are procured involuntarily.

  • Procedural impropriety. Court has discretion to exclude evidence for procedural impropriety. It is for the prosecution to show that the probative value of the statement outweighs its prejudicial effect by giving a reasonable explanation for the procedural irregularity. The burden is also higher where violations are deliberate or reckless (Muhammad bin Kadar and another v PP [2011] SGCA 32).

  • Legal privilege. Legal advice privilege protects disclosure of confidential communication between client and solicitor which arises in a legal context in the course of the relationship (Yap Sing Lee v MCST No 1267 [2011] 2 SLR 998). Litigation privilege protects communications between a third party and lawyer or between a third party and client if they were made for the dominant purpose of litigation (Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd and Other Appeals [2007] 2 SLR 367).

  • Process of appeal. Once a decision on the conviction and sentence has been made by the judge, either party can generally make an appeal to the High Court.

  • Judicial review. Judicial review of administrative action can generally be brought under the headings of illegality, irrationality and procedural impropriety.

 

Bribery and corruption

Regulatory provisions and authorities

7. What are the main regulatory provisions and legislation relevant to bribery and corruption?

The main anti-bribery and corruption legislation in Singapore is the Prevention of Corruption Act (PCA). The main legislation that provides for the confiscation of benefits of corruption in Singapore is the Corruption Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA).

Corruption offences are investigated by the Corrupt Practices Investigation Bureau (CPIB), which reports directly to the Prime Minister and is independent from the Singapore Police Force.

The CPIB's report of detailed corruption statistics released in April 2015 indicated that 736 complaints were lodged and 136 cases were investigated by CPIB in 2014. Out of these 136 cases, 85% of the investigations involved private individuals giving, offering or receiving bribes.

 
8. What international anti-corruption conventions apply in your jurisdiction?

The following international anti-corruption conventions apply in Singapore:

  • The UN Convention against Corruption 2003.

  • The UN Convention against Transnational Organised Crime 2000.

Offences

9. What are the specific bribery and corruption offences in your jurisdiction?

The Prevention of Corruption Act (PCA) provides that it is an offence to corruptly receive, solicit, or agree to receive a gratification, and, corruptly promise or offer any person a gratification (sections 5 and 6, PCA).The term "corruptly" requires there to be a corrupt element in the transaction and a corrupt intention on the part of the person giving or receiving the gratification (Tan Tze Chye v PP [1997] 1 SLR 134). The PCA covers bribery between private persons and bribery involving public servants. It also covers the activities of agents or employees who act on the instructions of their principals or employers carrying out corrupt acts.

Foreign public officials (FPO)

There is no separate offence for bribing a FPO. Singapore citizens who bribe FPOs outside of Singapore commit an offence under sections 5 and/or 6 of the PCA and can be prosecuted by the Singapore courts.

Domestic public officials

There is no separate offence for bribing a domestic public official. Persons who bribe Singapore public officials commit an offence (sections 5 and/or 6 of the PCA). There is a statutory presumption that any payment to a public official is corrupt (section 8, PCA).

Private commercial bribery

Both public and private sector bribery are offences under the PCA.

Defences

10. What defences, safe harbours or exemptions are available and who can qualify?

There is no statutory defence for bribery under the PCA. There are no exceptions for facilitation payments or grease payments or for customary payments in any trade.

 
11. Can associated persons (such as spouses) and agents be liable for these offences and in what circumstances?

Associated persons (including agents) can be held liable under sections 5 and 6 of the PCA if they:

  • Commit a bribery offence in Singapore.

  • Are Singapore citizens and commit a bribery offence overseas.

Agents who abet a bribery offence outside of Singapore on behalf of their principal in Singapore commit an offence under the PCA (see Question 9, Offences).

Companies and other legal bodies can be held liable under the PCA. However, there is no statutory provision for a company to be held liable for the actions of its employees, agents or other associated persons.

Enforcement

12. Which authorities have the powers of prosecution, investigation and enforcement in cases of bribery and corruption? What are these powers and what are the consequences of non-compliance? Please identify any differences between criminal and regulatory investigations.

Authorities

The Corrupt Practices Investigation Bureau (CPIB) has extensive powers to investigate allegations of corruption under the PCA and the CPC. This includes the power to:

  • Conduct searches (including by forcible entry onto premises).

  • Seize evidence.

  • Carry out arrests (without a court order).

Where the public prosecutor is satisfied that there are reasonable grounds to suspect that an offence under the PCA has been committed, an order can be made to investigate any person's bank and other accounts (section 18, PCA).

The courts can make orders in support of any investigation or during trial. The orders are summarised above (see Question 3, Enforcement).

The CPIB works closely with its counterparts in the region, in particular Malaysia, Indonesia and Hong Kong, and also internationally.

Prosecution powers

The Public Prosecutor has prosecution powers and the written consent of the Public Prosecutor is required before a prosecution under the PCA can commence (section 33, PCA).

Powers of interview

If ordered by the Public Prosecutor, the CPIB or a special investigator can exercise police powers of interview (sections 20 to 22, CPC and section 19, PCA), which allows them to compel anyone within Singapore who appears to have knowledge of the facts of the case in question to be present and interviewed.

Powers of search/to compel disclosure

The Public Prosecutor can authorise the CPIB or special investigator to investigate various accounts, including bank accounts, safe deposit accounts and share accounts, where he is satisfied that there are reasonable grounds for suspecting that an offence under the PCA has been committed (section 18, PCA).

Powers to obtain evidence

In the event where an investigation involves a person in the service of the government or public body, the Public Prosecutor can by written notice require (section 21, PCA) that:

  • The person provides a sworn statement declaring all movable or immovable assets owned.

  • A third party declares his assets if the Public Prosecutor has reasonable grounds to believe that information can assist the investigation.

  • A manager of any bank to give copies of accounts of that person or of those of their spouse or children.

There is a legal obligation for anyone requested to provide information by the director or officer of the CPIB to give that information (section 27, PCA).

Power of arrest

Right to bail. See Question 5, Convictions and sanctions.

Court orders or injunctions

See Question 3, Enforcement.

 
13. Which authority makes the decision to charge and on what basis is that decision made? Are there any alternative methods of disposal and what are the conditions of such disposal?

The Attorney General has absolute discretion to make the decision to charge (Article 35(8), Constitution). An alternative to bringing a charge is to issue a conditional warning, where the prosecution retains the power to charge on the offence at a later time if the accused reoffends or commits other offences.

Factors considered in the exercise of prosecutorial discretion include:

  • Case theory. Interpretation of the facts as to the events that have occurred.

  • Evidentiary proof. Whether it is possible to prove the hypothesis in court.

  • Question of law. Whether this is a test case for contentious criminal law.

  • Public policy. Whether it is in the public interest to prosecute the accused.

 
14. What are the sanctions for participating in bribery and corruption?

Civil/administrative proceedings or penalties

Under section 14 of the PCA, where any gratification has been given by any person to an agent in contravention of the PCA, the principal may recover the amount or the value of the gratification as a civil debt either from the agent or from the person who gave the gratification to the agent. This is distinct from the criminal proceeding to surrender the bribes (Leong Wai Kay v Carrefour Singapore Pte Ltd [2007] 3 SLR 78).

Under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), confiscation orders can also be made against a person convicted of bribery offences in respect of benefits derived from those offences. When assessing the value of such benefits, the court will have regard to any order made under section 13 of the PCA and leave out of account the benefits that were taken into account under that order.

Criminal proceedings or penalties

Right to bail. See Question 5, Convictions and sanctions.

Penalties. Under sections 5 and 6 of the PCA, any person found guilty of an offence will be liable on conviction to a fine up to S$100,000 and/or to imprisonment of up to five years.

Under section 7 of the PCA, where the events relate to a government contract proposal, the maximum term of imprisonment is extended to seven years.

Under section 5 of the CDSA, the Public Prosecutor can apply for a court order to confiscate the benefits derived by the defendant from criminal conduct. Where a person holds property or any interest in it is disproportionate to that person's known sources of income (and it cannot be explained) there will be a presumption that the property was the benefit of criminal conduct and may be subject to a confiscation order.

15. Are there any measures in place to safeguard the conduct of investigations? Is there a process of appeal? Is there a process of judicial review?

See Question 6, Safeguards.

Tax treatment

16. Are there any circumstances under which payments such as bribes, ransoms or other payments arising from blackmail or extortion are tax-deductible as a business expense?

Bribes, ransoms or other such payments are not tax-deductible as a business expense.

 

Insider dealing and market abuse

Regulatory provisions and authorities

17. What are the main regulatory provisions and legislation relevant to insider dealing and market abuse?

The Securities and Futures Act (Chapter 289) (SFA) is the principal legislation dealing with insider dealing and market abuse. Violation of the SFA related to prohibited conduct by a connected person and others in possession of inside information as well as other offences relating to market rigging and manipulation constitutes a criminal offence. Punishment can include a fine up to S$250,000 and/or imprisonment for a term of up to seven years. Criminal proceedings cannot be brought after a court has ordered payment of a civil penalty, which may include a fine up to S$2 million, if required by the Monetary Authority of Singapore (MAS) or the amount of profit made or losses avoided by the contravening party, if required by the harmed investors. The limitation periods have recently been increased to six years.

Offences

18. What are the specific offences that can be used to prosecute insider dealing and market abuse?

Insider trading

Insider trading is defined in sections 218 and 219 of the Securities and Futures Act (SFA) (subject to certain exceptions).

Insider trading is where both:

  • A person who is not a connected person under section 218 of the SFA (referred to as the insider) possesses information that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities.

  • The insider knows that:

    • the information is not generally available;

    • if the information were generally available, it may have a material effect on the price or value of the securities.

The insider must not (whether as principal or agent):

  • Subscribe for, purchase, sell or enter into an agreement to subscribe for, purchase or sell any such securities.

  • Procure another person to subscribe for, purchase, sell or enter into an agreement to subscribe for, purchase or sell any such securities.

Where the trading in the securities is permitted on the securities market of a securities exchange or futures market of a futures exchange, the insider must not, directly or indirectly, communicate the information, or cause the information to be communicated, to another person if the insider knows, or ought reasonably to know, that the other person would or would be likely to:

  • Subscribe for, purchase, sell or enter into an agreement to subscribe for, purchase or sell any such securities.

  • Procure a third person to subscribe for, purchase, sell or enter into an agreement to subscribe for, purchase or sell any such securities.

  • It is not necessary to prove intention to use information concerning the corporation in contravention of sections 218 and 219 of the SFA (section 220(1), SFA).

False trading

False trading (section 197, SFA) prohibits the creation of a false and misleading appearance with respect to the volume of trading, the price of or market for any securities on a securities market.

Market rigging

Market rigging is prohibited under the SFA. Market rigging is defined as securities transactions that do not involve a change in the beneficial ownership of the securities, which are intended to maintain, increase, reduce or cause fluctuations in the market price of any securities (section 197, SFA).

Market manipulation and inducing others to deal in securities

A person cannot effect, take part in, be concerned in or carry out (directly or indirectly), two or more transactions in securities of a corporation that will affect or maintain the price of the securities, with the intent to induce others to subscribe for, purchase or sell securities of the corporation or of a related corporation. The SFA prohibits recklessly or knowingly making any misleading, false or deceptive statements or concealing any material facts which induces another person to deal in securities (sections 198 and 200, SFA).

False or misleading statements

A person is prohibited from making or disseminating false or misleading statements that are likely to either induce others to subscribe for securities; or induce the sale or purchase of securities of the corporation or affect the market price of the securities (section 199, SFA).

 
19. What defences, safe harbours or exemptions are available and who can qualify?

Exemptions

The following exemptions apply to insider trading:

  • The transmission of inside information for the purpose of procuring someone to enter into an underwriting agreement, or by an underwriter to another person solely for the purpose of procuring that other person to enter into a sub-underwriting agreement or to subscribe for or purchase securities are exempted from the communication offence (section 223, Securities and Futures Act (SFA)).

  • Communication of information or purchases of securities are exempted (section 224, SFA).

  • An individual or corporation is not in violation when entering into transactions with knowledge or intent of the individual or corporation having made or planning to make other transactions related to the securities.

  • A corporation will not be attributed with the knowledge of its officers if (section 226 (2), SFA):

    • the decision to enter into a transaction was not made by an officer;

    • a sufficient ethical wall existed; and

    • no relevant information was passed to the person deciding to enter the transaction.

Other exceptions include:

  • Directors obtaining share qualifications in accordance with the Companies Act.

  • Subscription for and acquisition of securities by employees or trustees for employees of the corporation or a related corporation under an employee benefits scheme.

  • Transactions entered into by market-makers in securities to which that transaction relates.

  • Transactions by personal representatives of a deceased, a liquidator or someone acting as Official Assignee under the Bankruptcy Act in good faith performance of the functions of the office.

  • Transactions by way of or arising out of a mortgage or charge of securities or a pledge or lien of documents to title of securities.

  • Transactions by the manager of an issue of securities, in accordance with their obligations under an agreement with the issuer or corporation.

Defences

It is a defence to a proceeding for maintaining, increasing, reducing or causing fluctuations in the market price of any securities, by means of any purchase or sale of securities that do not involve a change in the beneficial ownership of those securities, if the person establishes that he did not have the purpose of creating a false or misleading appearance in the market price of securities (section 197(6), SFA).

Enforcement

20. Which authorities have the powers of prosecution, investigation and enforcement in cases of insider dealing and market abuse? What are these powers and what are the consequences of non-compliance? Please identify any differences between criminal and regulatory investigations.

Authorities

The Monetary Authority of Singapore (MAS) has the power to investigate and enforce the provisions of the Securities and Futures Act (SFA), primarily through the civil penalty regime (section 232, SFA). The Commercial Affairs Department (CAD) and the Attorney General's Office may investigate any criminal violation of the SFA. However, the powers of criminal investigations (see Question 3, Enforcement) will apply to any police investigation. The SFA allows for the CAD to transfer information on any investigation to the MAS.

Prosecution powers

See Question 3.

Powers of interview

See Question 3.

Powers of search/to compel disclosure

See Question 3.

Court orders or injunctions

During an investigation, the MAS (or the relevant exchange, clearing house or licensed trade repository) can apply to the court for several orders where it appears to the court that a person (section 325, SFA):

  • Has committed an offence.

  • Has contravened their licence or the rules of the relevant exchange.

  • Is about to commit an offence related to dealing in securities or trading in futures contract.

The court can issue the orders to:

  • Restrain a person from carrying on business to deal in securities or trade in futures contracts, or act as a representative of such a person, or from holding themselves out as carrying out the business.

  • Restrain a person from acquiring, disposing of or otherwise dealing with any securities or trading in any futures contracts as specified in the order.

  • Appoint a receiver of the property of the holder of a capital markets services licence to deal in securities or trade in futures contracts or of property that is held by the holder for or on behalf of another person (whether on trust or otherwise).

  • Declare a contract relating to any dealing in securities or trading in futures contracts to be void or voidable.

  • Direct a person to act in a specified way or refrain from acting in a specified way.

  • Any ancillary order that is considered to be desirable as a result of making any of these orders.

 
21. Which authority makes the decision to charge and on what basis is that decision made? Are there any alternative methods of disposal and what are the conditions of such disposal?

See Question 13.

 
22. What are the sanctions for participating in insider dealing and market abuse?

Civil/administrative proceedings or penalties

On an application by MAS (with the consent of the Public Prosecutor), the court can impose a civil penalty of up to three times the amount of profit made or loss avoided by the defendant given the defendant's breach of the SFA (section 232(2), SFA). In the event where there is no profit made or loss avoided (for instance, in the event where a corporation breaches disclosure requirements), the court can fine the defendant up to S$2 million (section 232(3), SFA).

Criminal proceedings

Right to bail. See Question 5, Convictions and sanctions.

Penalties. A person who contravenes the SFA provisions relating to prohibited conduct by connected persons and other persons in possession of insider information is liable on conviction to a fine up to S$250,000 and/or imprisonment of up to seven years. Similar penalties apply for the offences of market manipulation, market rigging and false trading.

Civil suits

Purchasers and sellers of or subscribers for securities and those entering into futures contracts or arrangements relating to foreign exchange who have suffered loss, must be entitled to be compensated by the contravening person (section 234, SFA). Civil suit remedies are not generally available if the contravening person has already been convicted of a criminal offence or been subject to a civil penalty (section 235, SFA). Punitive damages are not available.

 

Safeguards

23. Are there any measures in place to safeguard the conduct of investigations? Is there a process of appeal? Is there a process of judicial review?

See Question 6, Safeguards.

 

Money laundering, terrorist financing and financial/trade sanctions

Regulatory provisions and authorities

24. What are the main regulatory provisions relevant to money laundering, terrorist financing and/or breach of financial/trade sanctions? What are the specific offences that can be used to prosecute money laundering, terrorist financing and breach of financial/trade sanctions?

Money laundering

The Corruption Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) is the principal legislation covering money laundering in Singapore.

Singapore's financial regulator, the Monetary Authority of Singapore (MAS), publishes guidelines for regulated entities including (for example) the Prevention of Money Laundering and Countering the Financing of Terrorism – Bank Guidelines (MAS Notice No. 626). The Association of Banks in Singapore has also published Guidelines on Anti-Money Laundering and Combating of Financing of Terrorism.

Terrorist financing

The Terrorism (Suppression of Financing) Act (Chapter 325) (TSFA) is the principal legislation covering terrorist financing in Singapore.

Financial/trade sanctions

The United Nations Act (Chapter 339) empowers the minister to make regulations to give effect to Article 41 of the UN Charter (UNSC Resolutions). In June 2014, the United Nations Act was invoked for the first time where charges were laid against a Singapore-registered shipping firm (Chinpo Shipping Company Private Limited) for allegedly financing activities related to weapons of mass destruction in North Korea.

The MAS Act provides that Singapore's financial regulator, MAS, can make any regulations it considers necessary against financial institutions to discharge any binding obligation in Singapore by virtue of the decision of the UN Security Council (section 27A(1)(b)).

There are also a number of regulations in force in Singapore that implement financial and trade sanctions against certain countries.

 

Defences

25. What defences, safe harbours or exemptions are available and who can qualify?

It is a defence to a charge under sections 46(3), 47(3), 46(2), 47(2), 43(1) and 44(1) of the CDSA to show that the defendant did not have the knowledge and/or did not have reasonable grounds to believe that the property represented the benefits of criminal conduct. A company or individual's compliance with industry best practice codes will improve the chances of this defence being accepted by the courts.

It is a defence to a charge under sections 43(1) and 44(1) of the CDSA where a person discloses to an authorised officer any suspicion or belief that the property is subject to an arrangement deriving from the benefits of criminal conduct. This is so long as the disclosure is made before he enters into the arrangement or does so of his own volition and as soon as reasonably possible.

It is a defence to a charge under sections 46(3) and 47(3) of the CDSA where the defendant can show they paid adequate consideration for the property concerned.

Lawyers (including in-house counsel) are not required to disclose documents and items that are subject to legal privilege under section 39 of the CDSA.

It is a defence to a "tipping-off offence" under sections 48(1) and (2) of the CDSA where the defendant did not know and did not have reasonable grounds to suspect that an authorised officer was acting on an investigation or that a disclosure had been made to the authorised officer under the CDSA.

Lawyers (including in-house legal counsel) also have a defence to a "tipping-off offence" under sections 48(1) and (2) of the CDSA where information is given to clients in connection with giving advice and in the course of the lawyer's employment (and not for any illegal purpose).

Terrorist financing

Under the TSFA, the minister can make regulations exempting certain persons from the provisions prohibiting the provision of property or services (section 4(b), TSFA) and the prohibition against dealing with the property of terrorists (section 6, TSFA) in relation to specific transactions or activities.

Financial/trade sanctions

If the relevant offence is not a strict liability offence, the defendant can raise a defence of lack of knowledge that it was dealing with a sanctioned jurisdiction or designated person to argue there was no intention of committing the offence. However, this may be difficult to establish where the relevant regulation provides a duty to exercise vigilance when dealing with entities that are related to the sanctioned jurisdiction or a designated person (for example, Regulation 15 of the United Nations (Sanctions-Iran) Regulations 2014).

 

Enforcement

26. Which authorities have the powers of prosecution, investigation and enforcement in cases of money laundering? What are these powers and what are the consequences of non-compliance? Please identify any differences between criminal and regulatory investigations.

Authorities

The Commercial Affairs Department (CAD) of the Singapore police force is responsible for the investigation of most financial crimes in Singapore. The Financial Investigation Group of the CAD is responsible for investigating money laundering, terrorist financing as well as other financial crimes.

The CAD's powers are governed by the CDSA and the CPC and are wide-ranging, including the power to search premises, require the production of documents, seize travel documents, carry out arrests and compel the appearance of witnesses. There are wide powers to arrest a person, search and seize property without a warrant or order from the court.

The CAD frequently works with other financial crime agencies in the region and internationally.

Prosecution powers

See Question 3, Enforcement.

Powers of interview

See Question 3, Enforcement.

Powers of search/to compel disclosure

The CDSA grants power to an authorised officer, on application to court, to compel persons (other than financial institutions) to produce a specific material or material of a specific description (section 30, CDSA). The power to compel disclosure from financial institutions is also provided under the CDSA (section 31, CDSA) and an authorised officer can apply to the court for warrants to enter and search premises, including an order to photograph and make copies of documents (section 34, CDSA).

Powers to obtain evidence

See Question 3, Enforcement.

Power of arrest

See Question 5, Convictions and sanctions.

Court orders or injunctions

Court orders can be obtained in support of an investigation, including production orders, search warrants, restraint orders, charging orders, confiscation orders and other injunctions. The orders can relate to individuals or property within Singapore or outside of Singapore.

Suspects have the right to apply to court for an order to release them from detention (for example ,where a person has been arrested without a warrant and detained for more than 48 hours, (section 68, CPC)), set aside a search warrant (section 27, CPC), return documents or exclude evidence that has been unlawfully obtained. However, the grounds are limited. The Singapore Constitution also provides for basic rights, which may be enforced, including the right of an arrested person to consult and be defended by a lawyer of his choice (Article 9(3), Singapore Constitution).

Protections available

See Question 6, Safeguards.

 
27. Which authority makes the decision to charge and on what basis is that decision made? Are there any alternative methods of disposal and what are the conditions of such disposal?

See Question 13.

 

Conviction and sanctions

28. What are the sanctions for participating in money laundering, terrorist financing offences and/or for breaches of financial/trade sanctions?

Money laundering

Right to bail. See Question 5, Convictions and sanctions.

Penalties. The following penalties are applicable for money laundering offences in Singapore:

  • Direct concealment or transfer of the benefits of criminal conduct (sections 46(1) and 47(1), CDSA):

    • individuals: a fine up to S$500,000 and/or up to ten years' imprisonment;

    • companies and corporate bodies: a fine up to S$1 million.

  • Acquiring the benefits of criminal conduct for inadequate or no consideration (sections 46(3) and 47(3), CDSA):

    • individuals: a fine up to S$500,000 and/or up to ten years' imprisonment;

    • companies and corporate bodies: a fine not exceeding S$1million.

  • Assisting a person to commit a money laundering offence (sections 46(2) and 47(2), CDSA):

    • individuals: a fine up to S$500,000 and/or up to ten years' imprisonment;

    • companies and corporate bodies: a fine up to S$1million.

  • Entering into arrangements to deal with the benefits of criminal conduct (sections 43(1) and 44(1), CDSA):

    • individuals: a fine up to S$500,000 and/or up to ten years' imprisonment;

    • companies and corporate bodies: a fine up to S$1 million.

Penalties for other offences are as follows:

  • Tipping-off (sections 48(1) and (2), CDSA). A fine up to S$30,000 and/or imprisonment up to three years for individuals, companies and corporate bodies.

  • Failure to report (section 39, CDSA). A fine up to S$20,000 for individuals, companies and corporate bodies.

Terrorist financing

Right to bail. See Question 5, Convictions and sanctions.

Penalties. Individuals who are guilty of offences under sections 3 to 6 of the TSFA will be liable on conviction to a fine up to S$500,000 and/or up to ten years of imprisonment. Companies who are guilty can face a fine of up to S$1 million.

Financial/trade sanctions

Right to bail. See Question 5, Convictions and sanctions.

Penalties. Any person who commits an offence under regulations made under the United Nations Act (including incitement, aiding and abetting) will be liable on conviction to:

  • A fine up to S$500,000 and/or between two and ten years of imprisonment (for individuals).

  • A fine up to S$1 million (for companies or other corporate bodies).

Any financial institution that commits an offence under the regulations or the MAS Act will be liable to a fine of up to S$1 million on conviction.

 

Safeguards

29. Are there any measures in place to safeguard the conduct of investigations? Is there a process of appeal? Is there a process of judicial review?

See Question 6, Safeguards.

 

Financial record keeping

30. What are the general requirements for financial record keeping and disclosure?

The Monetary Authority of Singapore (MAS) provides that the relevant financial documents must generally be retained for five years. Commercial banks must prepare, maintain and retain records of data, documents and information relating to customer due diligence (CDD) for at least five years (MAS Notice 626, 24 April 2015, Article 12), as are merchant banks (MAS Notice 1014, 24 April 2015, Article 12) and finance companies (MAS Notice 824, 24 April 2015, Article 12). Bank documents, records or information (that are required to be retained under written law) can be kept in an electronic form (section 9(1), Electronic Transactions Act 2011; MAS Notices 626, 1014 and 824, Article 12(4)).

In the context of combatting drug trafficking, money-laundering and other serious crimes, the CDSA requires prescribed persons to maintain records of cash transactions with their customers (section 48I(1)(3)(a), CDSA). The CDSA also requires that records of all information relating to a customer that is obtained through the requisite CDD must be retained (section 48I (1)(3)(b), CDSA).

Money-changers licensed under Singapore law (Money-changing and Remittance Businesses Act (Chapter 187) (MCRBA)) must keep complete records in English of all their transactions in the books, accounts, records and registers for at least five years after the day on which the transaction to which they relate takes place (sections 21(1) and (2), MCRBA).

The existing requirements for retaining records of CDD by financial institutions for anti-money laundering and combatting terrorist financing purposes are now required by the Monetary Authority of Singapore (Amendment) Act 2015, but the details of the measures continue to be reflected in the relevant MAS notices.

In the context of Singapore companies, directors of companies have a duty to keep proper accounting records of the company, as well as other records that will sufficiently explain the transactions and financial position of the company and enable true and fair profit, loss accounts and balance sheets (section 199(1), Companies Act). The records must be retained for at least five years (section 199(2), Companies Act). The records must be disclosed to the company's shareholders at the company's annual general meeting (section 201, Companies Act).

 
31. What are the penalties for failure to keep or disclose accurate financial records?

The penalty for a regulated financial institution (including commercial and merchant banks and finance companies) that does not comply with the record retention requirements is a fine of up to S$1 million. For continuing offences, a further fine of S$100,000 will apply for every day the offence continues after conviction (section 27B (2), MAS Act).

The penalty in relation to failure of maintaining money-changers' records is a fine of up to S$50,000. For continuing offences, a further fine of S$5,000 will apply for every day the offence continues after conviction (section 21(3), MCRBA).

The penalty in relation to failure of maintaining records of cash transactions and customer information under section 48I of the CDSA is a fine up to S$20,000 or imprisonment for a term of up to two years, or both (section 48I(1)(4), CDSA)..

 
32. Are the financial record keeping rules used to prosecute white-collar crimes?

There are penalties for breaches of the financial record keeping rules, such as fines and imprisonment. The offence provisions of the CDSA, read with section 35 of the CPC, allow the relevant authorities in Singapore to freeze bank accounts to prevent any dealings with the bank accounts of persons or entities that the authorities suspect may contain the proceeds of crime.

 

Due diligence

33. What are the general due diligence requirements and procedures in relation to corruption, fraud or money laundering when contracting with external parties?

Customer due diligence measures and internal control measures can be prescribed from time to time (see below) and they must be carried out before entering into cash transactions with customers. Certain cash transactions will not proceed in certain circumstances (sections 48I (1) and (2), CDSA) (for example, where a cash transaction is proposed with an entity/person subject to sanctions (under the United Nations Act) or person covered by the Terrorism (Suppression of Financing) Act).

A prescribed person must maintain:

  • Records of each cash transaction containing the prescribed information on that transaction.

  • A record of all information relating to a customer that is obtained through the customer due diligence measures performed for that transaction.

  • A copy of each supporting document relied on in support of any information referred to above (section 48I(3), CDSA).

The MAS has issued notices to various institutions including banks (MAS Notice 626, 24 April 2015), merchant banks (MAS Notice 1014, 24 April 2015), finance companies (MAS Notice 824, 24 April 2015) and money-lenders (MAS Notice 3001, 1 July 2014), providing guidelines to follow when entering into business transactions to prevent money laundering and the financing of terrorism.

 

Corporate liability

34. Under what circumstances can a corporate body itself be subject to criminal liability?

Unless the person with the relevant knowledge or who performed the criminal act is considered as the embodiment of the company, a corporate body cannot be subject to criminal liability (Tesco Supermarkets Ltd v Nattrass 919720 AC 153, cited in the Singapore High Court decision of Tom-Reck Security Services Pte Ltd v Public Prosecutor 920010 1 SLR(R) 327).

Cartels

35. Are cartels prohibited in your jurisdiction? How are cartel offences defined? Under what circumstances can a corporate body be subject to criminal liability for cartel offences?

Legislation

The main legislation relating to anti-competitive behaviour, which include cartel offences in Singapore is the Competition Act (Chapter 50B) (CPA).

The CPA is applicable to all private sector undertakings that are capable of carrying out commercial and economic activities, regardless of whether the undertaking is owned by a foreign entity, except for the matters or mergers excluded as specified in the Third and Fourth Schedules. There are three main restrictions under the CPA:

  • Agreements, decisions and practices which prevent, restrict or distort competition (section 34, CPA). Unless exempted under the Third Schedule of the CPA, arrangements which have an object or effect of distorting competition within Singapore such as directly or indirectly engaging in price fixing activities or limiting markets or production are prohibited.

  • Abuse of a dominant position (section 47, CPA). Unless exempted under the Third Schedule of the CPA, conduct by one or more undertakings that result in an abuse of a dominant market position in any market in Singapore, such as engaging in predatory behaviour towards competitors or limiting markets or production are prohibited. The CCS uses indicative market share thresholds to determine what constitutes dominance and considers a market share above 60% as likely to indicate that an undertaking is dominant in the relevant market.

  • Mergers that substantially lessen competition (section 54, CPA). Unless exempted under the Fourth Schedule of the CPA, mergers that have resulted, or can be expected to result, in a substantial lessening of competition within any market in Singapore are prohibited. The prohibition applies to both mergers and anticipated mergers. The creation of a joint venture which performs on a long term basis, all functions of an independent economic entity will also constitute a merger.

Powers to investigate

The Competition Commission of Singapore (CCS) is the primary authority with powers to prosecute, investigate and enforce infringements of the prohibitions under the CPA (section 62, CPA). The CCS can commence investigation if there are reasonable grounds for suspecting that the prohibitions under the CPA have been infringed.

Power to require documents or information

The CCS can also require any person to produce documents or information that it considers relevant to an investigation by written notice (sections 61A and 63, CPA).

Power to enter premises without a warrant

An authorised officer of the CCS can enter any premises without a warrant after giving advance notice in writing if the investigating officer has reasonable grounds for suspecting that the premises are or have been occupied by an undertaking which is being investigated in relation to a prohibition under the CPA (section 64, CPA).

Powers to compel persons

Where the CCS decides that any agreement, conduct or (anticipated) merger constitutes a breach of the CPA, the CCS may provide directions for such persons to remedy, mitigate or eliminate any adverse effects of such infringements and to prevent the repeat of such infringements (section 69(1), CPA).

Penalties

The CCS can impose a financial penalty for an infringement of any prohibition under the Act provided that infringement has been committed intentionally or negligently. The CCS can impose a financial penalty of up to 10% of the yearly turnover of the business of the person in Singapore, for each year of infringement, up to a maximum of three years (section 69(4), CPA).

Immunity and leniency

36. In what circumstances is it possible to obtain immunity/leniency for co-operation with the authorities?

Singapore's case law suggests that co-operation with the authorities is a mitigating factor in sentencing. In Public Prosecutor v Ang Seng Thor (2011) 4 SLR 217, the High Court of Singapore recognised the defendant's high degree of co-operation with the authorities as a consideration and gave him a lesser sentence.

In addition, there are several protection measures available to whistleblowers and those who comply with the disclosure rules under the legislation.

See Question 41, Whistleblowing.

 

Cross-border co-operation

37. What international agreements and legal instruments are available for local authorities?

Obtaining evidence

The Attorney General (AG) can request that the appropriate foreign authority arranges for evidence to be sent to the AG, if they are satisfied that there are reasonable grounds for believing that the evidence is relevant to any criminal proceedings in Singapore (section 8, Mutual Assistance in Criminal Matters Act (MACMA), Chapter 190A).

Seizing assets

If the AG is satisfied that there are reasonable grounds for believing that some or all of the property concerned is located in a particular foreign country (section 13, MACMA), the AG can request that the appropriate foreign authority to arrange for the enforcement and satisfaction of a Singapore confiscation order and to restrict the dealing in any property against which a confiscation order may be enforced or which may be available to satisfy the order (in the event where criminal proceedings are instituted in Singapore).

Sharing information

The AG can request that another country assists in locating a person if the AG is satisfied that there are reasonable grounds for believing that there is (in any foreign country) a person who either (section 14, MACMA) is or may be concerned in or affected by any criminal matter in Singapore or can give or provide evidence or assistance relevant to any criminal matter in Singapore.

There are also other means through which information can be shared, such as:

  • Suspicious Transaction Reporting Office (STRO). The STRO is Singapore's Financial Intelligence Unit (FIU) and can share information with its foreign counterparts if there is an arrangement with the foreign agency for the sharing of information on the basis of reciprocity and confidentiality (section 41, Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits Act) (CDSA)). This can be done through memoranda of understanding (MOUs) with other FIUs. The STRO also can exchange information through the Egmont Group of FIUs, and has access to other forms of co-operation available to enforcement agencies such as the International Criminal Police Organisation (INTERPOL). The STRO proactively forwards financial intelligence reports to foreign FIUs to assist foreign law enforcement agencies in their detection of crime and their investigations. In 2014, there were 341 instances of spontaneous provision of information by the STRO.

  • Singapore Police Force (SPF). The SPF has a MOU with its strategic partners in INTERPOL, such as the Australian Federal Police Force, Hong Kong Police Force and New York Police Department to enhance bilateral exchanges and joint co-operation in various fields.

  • Central Narcotics Bureau (CNB). The CNB co-operates actively with foreign law enforcement agencies on a bilateral basis, which involves the exchange of information and intelligence relating to drug-trafficking and drug-related money laundering offences. The CNB also works closely with international and regional drug law enforcement agencies such as the US Drug Enforcement Administration.

  • Corrupt Practices Investigation Bureau (CPIB). The CPIB co-operates with regional anti-graft agencies in the exchange of information, intelligence and joint operations, including the:

    • Anti-Corruption Commission (Malaysia);

    • Anti-Corruption Bureau (Brunei Darussalam);

    • Corruption Eradication Commission (Indonesia);

    • Independent Commission Against Corruption (Hong Kong);

    • Federal Bureau of Investigation (US); and

    • Serious Fraud Office (UK).

  • Monetary Authority of Singapore (MAS). The MAS can obtain and exchange supervisory information in respect of regulated entities and groups. The MAS is a signatory to numerous bilateral MOUs and also multilateral MOUs such as the International Association of Insurance Supervisors and the International Organisation of Securities Commissions. These arrangements strengthen MAS's ability to co-operate and exchange information with foreign supervisors as well as facilitate effective consolidated supervisions of international financial institutions.

Singapore exchanges information for tax purposes in accordance with the internationally agreed Exchange of Information Standards. Singapore has over 70 tax treaties, which facilitate the exchange of information of individuals who evade taxes.

Examples of information sharing include the:

  • Production of bank records. Singapore assisted the US in its investigations into the three largest internet poker companies and their principals, focusing on bank fraud, illegal gambling offences and the laundering of billions of illegal gambling proceeds. The assistance provided included the production of bank records, and contributed to a successful resolution of the case.

  • Enforcement of a foreign confiscation order. In 2009, Singapore started corruption investigations against a Singapore company after receiving information from Bangladesh and the US that large amounts of bribes in relation to certain infrastructure projects were being paid into the company's bank account in Singapore. Singapore accepted a joint MLAT request from Bangladesh and the US to enforce a US confiscation order in connection with the company's account, resulting in the return of US$2 million to Bangladesh.

 
38. In what circumstance will domestic criminal courts assert extra-territorial jurisdiction?

Singapore criminal jurisdiction is traditionally confined to the territory of Singapore. Unless expressly stated, a domestic statute is presumed to have no extra-territorial effect. Acts committed outside of Singapore are presumed not to constitute an offence, even if they would have amounted to an offence had they been committed in Singapore (Yong Vui Kong v PP (2012) SGCA 23).

The following are examples of statutes that expressly allow for the assertion of criminal extra-territorial jurisdiction:

  • The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits Act).

  • Section 37 of the Prevention of Corruption Act.

  • Section 3 of the Penal Code.

Under Order 11 of the Rules of Court (Cap. 322 R 5) (Rules of Court), the claimant can request permission from the court to serve on the defendant outside Singapore. Leave can be granted if several conditions are satisfied, including that:

  • There is a good arguable case that a specific connection has been established between the case and Singapore. In most cases, this will involve a connection between the facts, the law, the subject matter of the dispute, or the parties, with Singapore.

  • The Singapore court is the natural forum to determine the dispute.

  • There is a serious issue to be tried on the merits.

 
39. Does your jurisdiction have any statutes aimed at blocking the assertion of foreign jurisdictions within your territory? Are there statutes aimed at blocking the assertion of foreign jurisdictions within their territory?

Although there are presently no statutes blocking the assertion of foreign jurisdiction within Singapore, the common-law enforceability of foreign judgments in Singapore is subject to the general requirement that the foreign judgment must not be for the enforcement (directly or indirectly) of any foreign penal, revenue or other public law. In addition, any judgment sought to be recognised and enforced under the Reciprocal Enforcement of Foreign Judgments Act (REFJA) and the Reciprocal Enforcement of Commonwealth Judgments Act (RECJA) can be refused if it is contrary to public policy in Singapore.

 

Whistleblowing

40. Are whistleblowers given statutory protection?

There are many statutory provisions in Singapore law that protect whistleblowers. However, there is no coherent or comprehensive legal regime.

In the context of corruption, the PCA protects the anonymity of whistleblowers by providing that the names and addresses must not be disclosed in any civil or criminal proceeding under the PCA (section 36, PCA). The Companies Act offers protection to company auditors by ensuring that they will not be liable for defamation for any statement made in the course of their duties (section 208, Companies Act).

Any person who complies with a production order of bank documents will not be treated in breach of any restriction on the disclosure of information or rule imposed by law, contract or rules of professional conduct (section 24(2), MACMA)).

In the context of drug dealing and other criminal conduct, disclosure will not be treated as a breach of any restriction on the disclosure imposed by law, contract or rules of professional conduct and the person will not be liable for any consequent losses (section 39(6), CDSA). The informer's identity will also be protected (section 41, CDSA).

In the context of terrorism financing, section 10A of TSFA protects the anonymity of the informer by providing that evidence provided under sections 8 to 10 must not be disclosed in any criminal or civil proceedings.

 

Reform, trends and developments

41. Are there any impending developments or proposals for reform?

The Monetary Authority of Singapore (MAS) issued a Consultation Paper on the Proposed Amendments to the Securities and Futures Act in February 2015, to complete the expansion of MAS's scope to regulate over-the-counter derivatives.

The MAS recently released new AML/CFT notices and guidelines on targeting various financial institutions. In addition, the new Monetary Authority of Singapore (Amendment) Act has been passed which strengthens MAS's supervisory powers in relation to AML/CFT and enhances the MAS' ability to co-operate with its foreign supervisory counterparts. These changes align Singapore's regime with the international standards set by the FATF and the Basel Committee on Banking Supervision. The Act includes the following:

  • Requirements for financial institutions to conduct customer due diligence and retain such records.

  • Powers for MAS to conduct AML/CFT inspections on financial institutions and to approve such inspections by home AML/CFT supervisors.

  • Subject to strong safeguards, it enables MAS to provide information to:

    • foreign AML/CFT supervisors, in connection with the AML/CFT supervision of foreign financial institutions carrying out financial activities in that country; and

    • domestic authorities, in connection with the investigation or enforcement action of an offence, or any supervisory action taken against a person regulated by that authority for the contravention of AML/CFT requirements.

The Prime Minister, Lee Hsien Loong, has announced that there are plans to review the Corrupt Practices Investigation Bureau to keep up with international developments, including increasing the manpower strength of the Corrupt Practices Investigation Bureau and the establishment of a one-stop Corruption Reporting Centre to report suspected corrupt activities.

The Financial Action Task Force (FATF) held its fourth round of mutual evaluations of the anti-money laundering (AML) regime in Singapore between 17 November and 3 December 2015. The FATF delivered its report in September 2016, citing some improvements that could be made to Singapore's AML and CFT regimes.

It was also announced that the MAS was taking further measures to strengthen Singapore's AML/CFT regime by:

  • Progressively increasing the level of disclosure on supervisory actions taken for breaches of AML/CFT requirements, as well as publishing details of more severe penalties imposed on financial institutions for such breaches. This is to deter errant behaviour, reinforce MAS's preventive supervisory approach, and draw financial institutions' attention to more severe instances of deficiencies and breaches, allowing them to pre-emptively strengthen their own controls.

  • Discontinuing the issuance of the S$10,000 note to reduce the risks associated with large value cash transactions and high face-value notes.

  • Creating a dedicated Anti Money Laundering Department that will streamline the existing responsibilities for regulatory policies relating to money laundering and other illicit financing risks.

  • Changes to the Trustees Act are proposed which will make the ownership and control of trusts more transparent and which will give powers to the Ministry of Law to impose duties on trustees to obtain and maintain financial records on all beneficial owners.

 

Market practice

42. What are the main steps foreign and local companies are taking to manage their exposure to corruption/corporate crime?

The MAS has issued notices and guidelines for the various financial companies to take measures to manage their exposure to corruption/corporate crime.

Concrete measures have also been taken by companies. Singapore's DBS Bank has begun a major overhaul of its financial crime prevention strategy, as it seeks to upgrade its suspicious activity monitoring, due diligence and risk tools.

 

The regulatory authorities

Monetary Authority of Singapore (MAS)

W www.mas.gov.sg

Status. The MAS is a governmental organisation established by statute. Its chairman is Singapore's Deputy Prime Minister and the Minister for Finance, Tharman Shanmugaratnam.

Principal responsibilities. The MAS is Singapore's central bank. It is also an integrated supervisor and regulator overseeing all financial institutions in Singapore including banks, insurers, capital market intermediaries, financial advisers, and the stock exchange.

The MAS issues various documents using its powers under the MAS Act and its subsidiary legislation, providing guidance on anti-money laundering regulations, countering the financing of terrorism, corporate governance, risk management and enforcement actions.

Corrupt Practices Investigation Bureau (CPIB)

Status. The CPIB is a government agency with statutory powers under the Prevention of Corruption Act (PCA).

Principal responsibilities. The CPIB is responsible for investigating corruption under the PCA and any other offence that is disclosed during any corruption investigation. It also provides reviews and makes recommendations on anti-corruption practices and the procedure of public entities.



Online resources

Monetary Authority of Singapore (MAS)

W www.mas.gov.sg/regulations-and-financial-stability/anti-money-laundering-countering-the-financing-of-terrorism-and-targeted-financial-sanctions/anti-money-laundering-and-countering-the-financing-of-terrorism.aspx

Description. The official website of the MAS that contains the latest notices and guidelines relating to anti-money laundering and countering the financing of terrorism.

Singapore Statutes Online

W http://statutes.agc.gov.sg ( www.practicallaw.com/2-524-0334)

Description. The official website for all Singapore statutes, maintained and kept up to date by the Attorney General's Chambers.



Contributor profiles

Samuel Sharpe, Director and Head of the corporate crime and investigations practice group

Duane Morris & Selvam

T +65 6311 0030
F +65 6311 3691
E ssharpe@duanemorrisselvam.com

W www.duanemorrisselvam.com/

Professional qualifications. England and Wales, Solicitor; Advocate and Solicitor of the Supreme Court of Singapore

Areas of practice. Corporate criminal investigations; regulatory compliance; dispute resolution.

Recent transactions

  • Investigation across multiple jurisdictions in Asia into a multi-million US dollar fraud conducted against an international fund with respect to a property development project.

  • Internal investigation into alleged bribery of public officials for a major multinational hotel and leisure company in respect of its hotels in Southeast Asia.

  • Internal investigation into allegations of money laundering made against an international corporate services provider.

  • Conducting an investigation into an MNC client's Vietnamese operations and advising on liabilities under the UK Bribery Act and UK anti-money laundering legislation.

  • Advising a former employee of a major MNC in relation to allegations against the company of bribery and fraud.

  • Advising a multinational engineering company on their anti-bribery policies and procedures for their China business.

  • Advising a Japanese manufacturing company on their anti-bribery policies and procedures for their Southeast Asia business.

  • Advising a major international investment bank in carrying out a bribery risk assessment and drafting FCPA and UK Bribery Act compliant policies and procedures for a JV real estate holding company in China.

  • Advising a UK JV property development company in carrying out a bribery risk assessment of its business and drafting FCPA and UK Bribery Act compliant anti-bribery policies and procedures.

  • Advising a MNC property development company in carrying out a bribery risk assessment of its business and drafting FCPA and UK Bribery Act compliant anti-bribery policies and procedures.

Languages. English

Professional associations/memberships. Law Society of England and Wales;

Law Society of Singapore.


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