INSPIRED BY THE UK REGIME, SINGAPORE INTRODUCES DEFERRED PROSECUTION AGREEMENTS FOR CORRUPTION AND MONEY LAUNDERING OFFENCES

The Singapore parliament has enacted a framework for Deferred Prosecution Agreements. This will apply to corporate offences including corruption, money laundering and the receipt of stolen property. DPAs will need to be supervised by a judge and confirmed by the Singapore High Court.

The new law largely copies the UK's DPA law, with two main exceptions:

(1) Singapore DPAs cover a more limited range of criminal offences

(2) Singapore prosecutors are not required to issue guidelines on when a DPA is appropriate, meaning that prosecutors retain maximum flexibility regarding terms.

This development heralds a change of approach regarding corporate criminal liability. However, with corporate liability still contingent on the common law identification principle, there may be limited appetite on the part of corporates to pursue DPAs when the actual risk of prosecution remains low. Putting corporate liability on a legislative footing, as is the case in the US, the UK and a growing number of other jurisdictions, may be the logical next step for Singapore. The US approach, advocating significant discounts on penalties for voluntary disclosure of corporate violations, may also be required to help push the regime forward.

Overview of key features

DPAs provide a tool for prosecutors to agree not to prosecute companies (the Singapore regime, like that in the UK, does not apply to individuals) in exchange for the defendant company agreeing to comply with certain conditions. These can include implementing compliance programmes, strengthening internal policies, cooperating with investigations, compensating victims and financial penalties. If the company fails to comply with its obligations under the DPA, the prosecutor may resume proceedings against the company. For companies, entering into a DPA can mean avoiding the reputational damage of a criminal conviction, as well as potentially lesser penalties than the equivalent criminal sanctions.

In qualifying cases, including the offences of corruption, money laundering and receiving stolen property, a DPA may be negotiated between the prosecutor and the company directly. The final agreement must then be approved by the Singapore High Court, who must be satisfied that the agreement is in the interests of justice and that its terms are "fair, reasonable and proportionate". Once approved by the High Court, the DPA will be published.

At present, the Singaporean criminal law retains the "identification principle" in corporate cases, requiring at least one sufficiently senior individual in the company to have the requisite mens rea. This presents a high bar for prosecutors, meaning that companies may be reluctant to enter into DPAs on the basis that they are unlikely to be convicted in criminal proceedings. However, this may change in the coming months, with some suggesting that a new corporate criminal attribution standard is in the works.

One of the aims of the new DPA framework is to encourage self-reporting and robust compliance programmes. However, as no guidelines have been issued as to the circumstances in which a DPA will be appropriate, how negotiations will be conducted, or the discounts on penalties which may be available, companies may be reluctant to come forward, limiting the impact of the new regime.

Comment

The new DPA regime may signal an increased appetite on the part of regulators to investigate and prosecute corporate bodies. However, its practical application may mean that the number of companies choosing to pursue this route is a trickle rather than a stream. If Singapore wishes to promote the DPA as a tool for resolving corporate criminal liability, guidelines advocating significant discounts for voluntarily disclosing violations would operate as an effective "carrot", while a new, stricter corporate criminal attribution standard would serve as a "stick".