On January 15, 2018, Singapore’s Law Minister, Kasiviswanathan Shanmugam SC, announced during an event held by the Law Society of Singapore a proposal for up to 50 different amendments to the city’s Criminal Procedure Code and Evidence Act, to include a procedure for Deferred Prosecution Agreements (“DPA”).  The proposed legislation, if introduced, would make a significant change in the enforcement tools available to Singaporean prosecutors, and comes against a backdrop of an increasingly high-profile focus on corruption and anti-money laundering prosecutions.

Deferred Prosecution Agreements: A Global Trend

The DPA procedure has long been used in the United States as a mechanism for resolving criminal investigations with penalty less severe than a criminal conviction.  First used in cases against individuals, the use of DPAs to resolve large and complex investigations involving corporate defendants has become increasingly common.  Under the procedure typically used in the United States, a criminal charging document is filed with the court along with a motion to defer prosecution, which requires suspension of the 70-day deadline for bringing federal prosecutions to trial under the 1974 Speedy Trial Act.  If the conditions of the DPA are satisfied, at the conclusion of the period of deferral the government agrees to dismiss the charges.  DPA conditions typically include payment of a financial penalty, remediation and, in some cases, appointment of an independent compliance monitor.  Under the U.S. procedure, the role of the court in approving a DPA is exceptionally limited; DPAs agreed by the government are presumptively approved in the absence of a clear showing of prosecutorial misconduct.  United States v. HSBC Bank USA, N.A., 863 F.3d 125 (2017); United States v. Fokker Servs. B.V., 818 F.3d 733 (D.C. Cir. 2016).

Other countries have more recently adopted the DPA procedure, but their approach has generally differed from that of the United States, particularly when it comes to the level of judicial supervision required.  For example, in 2013, the U.K. adopted the Crime and Courts Act 2013, which established a DPA procedure for resolving criminal cases against entities.  At a high level, the following are the key features of a DPA under English law:

  • DPAs can only be used to resolve criminal cases against companies, partnerships and unincorporated associations (not individuals), and are only available for certain offences, which are primarily economic in nature (including, for example, fraud, certain tax offences, forgery, certain offences under the Financial Services and Markets Act 2000, certain offences under the Proceeds of Crime Act 2000);
  • Prosecutors have unfettered discretion to decline to resolve a prosecution through a DPA; on the other hand, where a DPA is pursued it is subject to court approval;
  • A DPA must be approved by the Crown Court pursuant to a declaration that the DPA is in the interests of justice and is fair, reasonable and proportionate; and
  • The amount of any financial penalty must be broadly comparable to the fine a court would have imposed on conviction for the alleged offence following a guilty plea.

The U.K. Serious Fraud Office (“SFO”) and Crown Prosecution Service have published detailed joint guidance on the procedures for obtaining a DPA, including – importantly – the factors that prosecutors are to consider when agreeing to enter into a DPA.  Key among those considerations is the extent to which the defendant company cooperates with the ongoing investigation.  In a December 2015 Q&A, the SFO’s then-Joint Head of Bribery and Corruption emphasised that cooperation is the indispensable ingredient in obtaining a DPA:

Q: is cooperation the one factor that would have to be present for a DPA? A: Cooperation, and of course, the gravity of the conduct. I think it probably would to be honest. I am trying to imagine a situation where a company met all the criteria set out in the code, but the company had not worked with us. Even here, I think, the answer is no – a DPA would not be appropriate.

The SFO’s General Counsel, Alun Milford, re-emphasised the importance of cooperation in a late 2017 speech at the Cambridge Symposium on Economic Crime:

[W]e have been clear and consistent that only co-operative companies will ever be offered the opportunity of entering into a DPA with us. Since we have started exercising our powers under the Act, we have the court’s endorsement of that approach.

To date, the SFO has resolved two major cases under the DPA procedure, both involving corporate violations of the Bribery Act 2010.  These are the prosecutions of Standard Bank in 2015 and of Rolls Royce in 2017.

More recently, in December 2016 France adopted its Law Regarding Transparency, the Fight Against Corruption and the Modernization of Economic Life, commonly referred to as Sapin II.  The legislation permits corporate entities in France to resolve prosecutions related to corruption, money laundering, and various tax offences in exchange for (a) payment of a fine of up to 30% of the company’s turnover in the last three years, (b) implementation of a compliance program under the supervision of the French anticorruption agency, and (c) compensation of victims.  Like the U.K. legislation, a DPA under Sapin II required judicial approval and is only available to corporate defendants.  French authorities recently resolved their first prosecution using the DPA procedure, in a case involving HSBC.

In March 2017, the Attorney-General for Australia published a formal consultation paper proposing a framework for introducing the DPA procedure to Australia.  The proposed Australian procedure would largely mirror the U.K. approach:  DPAs would be available only to corporate defendants, and only in cases involving “serious corporate crime” such as fraud, bribery and money laundering.  In December 2017, the Australian Coalition Government introduced the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, which would have established the DPA procedure.  That proposed legislation has not yet been adopted.

To date, other major Commonwealth jurisdictions, including India, Malaysia and Hong Kong, have not adopted their own DPA procedures, although there has been considerable discussion among their respective legal communities about whether to do so.

What To Expect In Singapore

While draft legislation has yet to be introduced in Singapore, some early observations can be made about what to expect in any legislation to adopt a DPA procedure.

First, the procedure is likely to follow the model adopted in the U.K. in prescribing a formalized process for obtaining a DPA, subject to judicial oversight.  Indeed, in his statement on the matter, Mr. Shanmugam made clear that the procedure in Singapore would require judicial supervision.

Second, it is reasonable to believe that DPAs will be restricted in their availability to cases involving corporate defendants and financial crimes, such as bribery, corruption, money laundering or tax evasion.  This would follow the model in the other major countries that have adopted or considered express DPA legislation.

Third, insofar as the legislation vests discretion in prosecutors to resolve their cases via a DPA – or not – it is reasonable to expect that the extent of cooperation by the defendant with the investigation, as well as the defendant’s efforts to put in place compliance policies and procedures in advance of the investigation, will be important factors in considering whether a company qualifies for a DPA.  While Singapore’s Prevention of Corruption Act, unlike the U.K. Bribery Act, does not include an express defence for companies that implement adequate compliance procedures ex ante, the existence of such procedures has typically been treated as a matter that can be raised by means of a plea in mitigation.  Introduction of a DPA procedure, under which a less severe penalty may be imposed in the discretion of the prosecutor, increases the importance of implementing a robust compliance program.  Recent guidance issued by the U.S. Justice Department’s Fraud Section provides useful benchmarks against which to measure such a program.

Fourth, it is likely that the DPA procedure, if adopted, will be increasingly used in Singapore to resolve major cross-border investigations in cooperation with authorities in other jurisdictions.  In recent years, authorities in Singapore have been increasingly active in conducting investigations in coordination with foreign authorities.  Recent examples include the USD$105 million resolution reached between the Attorney General and Keppel Offshore & Marine Ltd. pursuant to Section 5 of the Prevention of Corruption Act, as part of a broader USD$422 million settlement that included the U.S. Justice Department and authorities in Brazil, as well as the ongoing investigation of the 1MDB matter.  (Singapore is currently the only country to have successfully prosecuted individuals in connection with that worldwide investigation).

Mr Shanmugam’s statement comes at a time when Singapore’s public authorities are signalling an intention to become even more active in the area of white collar prosecution.  In recent weeks, for example, the Singapore Police Force, Commercial Affairs Department – the authority with primary responsibility for investigating money laundering offences – announced that in the coming year it would target illicit funds “more proactively,” with a particular focus on funds flowing from overseas.  Last year, Singapore’s anti-corruption authority, the Corrupt Practices Investigation Bureau (“CPIB”) joined with authorities in Australia, Canada, New Zealand, the U.K. and the U.S. to establish an International Anti-Corruption Coordination Centre, to be hosted by the U.K.’s National Crime Agency in London.

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Amendments to the Criminal Procedure Code to adopt a DPA procedure in Singapore, among other revisions, are expected to be introduced this year in the form of a draft bill that would require approval by Singapore’s Parliament and Presidential assent.