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“Stern Warnings”

Emoticon saying no with his finger

In late 2017 Keppel Offshore & Marine resolved an FCPA enforcement action concerning conduct in Brazil. (See here for the prior post). The enforcement action against Keppel was believed to be the first FCPA enforcement action ever against a company based in Singapore. In resolving the net $105.5 million FCPA enforcement action, Keppel agreed to a deferred prosecution agreement.

As highlighted in this prior post, Jeffrey Chow (a U.S. citizen and Tulane educated lawyer who had various positions in the legal department of KOM) was also criminally charged in connection with the Keppel Offshore & Marine Foreign Corrupt Practices Act enforcement action.

Thereafter, in connection with both the Keppel enforcement action (and a related enforcement action against TechnipFMC) the DOJ also criminally charged Zwi Skornicki (a citizen of Brazil) with conspiracy to violate the FCPA’s anti-bribery provisions. According to the DOJ, Skornicki and others “knowingly and willfully conspired to pay, and paid, approximately $55 million in bribes in connection with at least 13 projects in Brazil tendered by Petrobras and, later, a company that employed several former Petrobras officials.”

Recently, Singapore’s Corrupt Practices Investigation Bureau (“CPIB”) – in consultation with the Attorney-General’s Chambers (“AGC”) “issued stern warnings … to six individuals who were formerly senior management staff of Keppel Offshore & Marine Limited (“KOM”) … “in lieu of prosecution for offences punishable under the Prevention of Corruption Act (“PCA”).”

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Friday Roundup


Scrutiny alerts, compliance defense, be a scholar, industry news, and for the reading stack.  It’s all here in the Friday roundup.

Scrutiny Alerts

The Bank of New York Mellon Corp (BNY Mellon) recently disclosed:

“In January 2011, the Enforcement Division of the U.S. Securities and Exchange Commission (the “SEC Staff”) informed several financial institutions, including BNY Mellon, that it had commenced an inquiry into certain of their business practices and relationships with sovereign wealth fund clients.  BNY Mellon has fully cooperated with the SEC Staff’s investigation.  In the third quarter of 2014, the SEC Staff issued Wells notices to certain current and former employees of BNY Mellon, informing them that the SEC Staff has made a preliminary determination to recommend enforcement action against them for alleged violations of the U.S. Foreign Corrupt Practices Act in connection with the provision of a limited number of internships to relatives of sovereign wealth fund officials.  BNY Mellon received a similar Wells notice in the fourth quarter of 2014.  Although it is not possible to predict the ultimate resolution or financial liability with respect to this matter, BNY Mellon is currently of the opinion that the outcome of this matter will not have a material effect on BNY Mellon’s business, financial condition or results of operations.”

A Wells Notice is not common in the FCPA context.  As highlighted earlier this week regarding Cobalt, just because the SEC issues a Wells Notice does not mean there will be an enforcement action.

Compliance Defense

Singapore, a country hardly viewed as a slouch on law and order issues, is in the process of reviewing its Prevention of Corruption Act (PCA).  As noted in this Norton Rose Fulbright update, among the areas for potential reform is corporate liability and a compliance defense.  As noted in the update:

Corporate Liability

Prosecutions in Singapore for bribery-related offences have primarily focused on individuals. While Singapore law allows corporations to be prosecuted, and international obligations under the OECD Anti-Bribery Convention require corporations to be legally liable for corrupt practices, the reality is that it is evidentially difficult to prove that a corporation had the requisite intent and carried out the relevant corrupt conduct. This is usually proven by showing the individual who committed the crime can be regarded as the “embodiment of the company” or its “directing mind and will” – not an easy task in an era of large multinational corporations with complex decision-making trees.

Any reform to the PCA may do well to take a leaf out of the pages of Singapore’s own anti-money laundering law – the Corruption, Drug-Trafficking and Serious Crimes (Confiscation of Benefits) Act (CDSA). The CDSA renders money-laundering by a corporation a criminal offence that can be proven through the state of mind as well as the conduct of any “director, employee or agent” who was acting within the scope of his or her actual or apparent authority. In other words, the evidential threshold is significantly lowered and the outdated “directing mind and will” test is done away with.

Compliance Defense

If the threshold for proving corporate liability is lowered, some balance can be restored by introducing a compliance defence. A corporation that is found liable for bribes paid by its “director, employee or agent” can be absolved of legal liability if it can show that it took reasonable steps to prevent such corrupt practices from taking place. Such a compliance defence provides a legal impetus for companies to adopt prudent business practices and foster ethical corporate cultures through the implementation of anti-corruption compliance programs.

This notion of a compliance defence finds support in the form of the “adequate procedures” defence enshrined in the recent UK Bribery Act 2010, and has been the subject of a movement in the US to introduce a similar affirmative defence in the context of the reform of the Foreign Corrupt Practices Act (FCPA).

Be a Scholar

Trace International has announced that “applications for the 2015-2016 TRACE Scholar Program at the University of Washington School of Law are being accepted now until February 28, 2015.”  Click here and here to learn more.

Industry News

King & Spalding recently announced that Jason Jones (the Assistant Chief of the DOJ’s FCPA Unit) is returning to the firm.

As stated in the release:  “As a supervisor in the Justice Department’s FCPA unit, Jones oversaw investigations and prosecutions of corporations and their employees for making improper payments to foreign officials in business transactions. He is well versed in the Justice Department’s increasing enforcement in this area.”

In the release, Christopher Wray, leader of King & Spalding’s Special Matters and Government Investigations practice, states: “We are pleased to welcome Jason back to the firm. Jason is well-known by many lawyers in the firm – and highly respected. His FCPA oversight experience at a national level and his strong trial skills provide added bench strength to the broad range of defense work we offer our clients. Jason is a natural fit for our team.“


Debevoise & Plimpton recently announced that “David A. O’Neil, former Acting Assistant Attorney General for the Criminal Division and former Deputy Assistant Attorney General for the Fraud Section at the Department of Justice, has joined the firm as a partner in Washington, D.C.”  As noted in the release, O’Neil “has experience across a broad range of high-profile matters, including the most significant FCPA prosecutions …”.

In this recent Corporate Crime Reporter interview, O’Neil talks about the shift of the corporate crime universe from New York City to Washington, D.C. and states:

“I have witnessed in my time in the Department a significant growth in the work that Main Justice is doing. It is not that the Southern District [of New York] is doing less. It’s that Main Justice is doing more. There are a number of reasons for that. Some are the result of the U.S. Attorney’s Manual, which requires that the Fraud Section have a role in every Foreign Corrupt Practices Act (FCPA) case. Much of it is FCPA driven.”

“When I started out, I actually worked some FCPA cases in private practice. But at that time, it was more of a niche practice. It was not the same kind of focus that it is now.”

“Today, in some ways, white collar practice is synonymous with FCPA practice. As a result, in every FCPA case, Main Justice’s Fraud Section is going to be an active player.”

Asked whether “the FCPA pipeline is still loaded,” O’Neil states:

“The FCPA is going to continue to be an active area. I don’t think we are anywhere near the end of the pipeline. In fact, you see the Department devoting greater resources, including through the creation of a dedicated FCPA unit at the FBI. My prediction would be that FCPA cases continue at their current pace or increase.”

For the Reading Stack

Reagan Demas (Baker & McKenzie) “Biting the Hands That Feed:  Corporate Charity and the U.S. Foreign Corrupt Practices Act.”

A Texas-sized double standard?  See here from the Texas Tribune in an article that begins as follows.  “It is illegal to bribe a public official in Texas, of course. But you might be surprised with what you can get away with if that public official is a state lawmaker.”


A good weekend to all.

Anti-Corruption Developments In Singapore – Ten Things To Know

A guest today from Wilson Ang (a Partner at Norton Rose Fulbright in Singapore).


Corruption in Singapore has recently been characterised by high-profile cases involving public officials. These cases involving two former senior public officials allegedly obtaining sexual gratification in exchange for favouring certain companies and a university professor allegedly obtaining sexual gratification and other gifts from a student in exchange for better grades, have raised interesting issues in relation to Singapore’s anti-corruption laws.

On 14 May 2013, former director of the Central Narcotics Bureau (CNB), Ng Boon Gay was acquitted of four charges of corruptly obtaining sexual gratification from a female sales executive in exchange for assisting to further the business interests her two IT company employers on the grounds that there was neither a corrupt element, nor guilty knowledge on the part of the accused as the parties were in a pre-existing romantic relationship.

Conversely, both Peter Lim and Tey Tsun Hang faced guilty verdicts. On 31 May 2013, Lim, the ex-commissioner of the Singapore Civil Defence Force (SCDF), was convicted of one charge of corruptly obtaining sexual gratification from a female general manager of a vendor in the IT industry in exchange for favouring the business interests of her employer. He later admitted to seven other corruption charges for trysts with two other women, who were working for technology companies that were SCDF vendors. He was sentenced to six months in jail. On 28 May 2013, Tey, a professor at the National University of Singapore (NUS), was found guilty of six charges of corruption including two acts of sexual intercourse with, and the receipt of four gifts of varying monetary values from, one of his law students and was sentenced to five months in jail. Both Lim and Tey claimed they were in a romantic relationship with their gratification-giver. However, these claims failed.

While these cases captured the attention of the media and the public, the judgments handed down by the courts also clarified and advanced the understanding of the Singapore legal landscape. Here are ten things to know about anticorruption developments in Singapore.

1 – Sex is Gratification

It is trite law that sexual favours amount to gratification under Singapore laws.  Sex between consenting adults in an intimate relationship can amount to gratification for the purposes of establishing corruption.  Gratification is defined in isolation without the notion of corrupt intent. It would be erroneous to define gratification by the reason it takes place. The context in which the gratification was received is only relevant to establish the intention behind it.

2 – Presumption of Guilt

If any gratification is given to a person employed by the Government or a public body by any person who has or seeks to have dealings with the Government or that public body, it is presumed that there is corrupt intent and that the gratification was an inducement or reward, unless this presumption is successfully rebutted on the facts.

In all three cases, the “public body” test was satisfied. However, only Ng managed to successfully rebut the presumption. The judge found that the sexual acts took place in the context of a romantic relationship, and that both the intentions of the recipient and giver of gratification were innocuous. Although the presumption of corruption was triggered by law when the sexual relationship began, due to the fact that Ng knew of her dealings with the Government, Ng was able to successfully rebut the presumption.

3 – Quid Pro Quo Not Needed

Under Singapore law, on satisfaction of the “public body” test, there is no need to prove that the receipt of gratification was an inducement for a specific corrupt act. It is sufficient for the gratification to be given in anticipation of some future corrupt act.  However, the accused must have corruptly accepted the gratification i.e. believing that it was offered as an inducement, before this presumption is triggered.

Case law refers to the sense of obligation the receipt of the gratification must create in the recipient. The relationship has been characterised by the courts as the purchase of the recipient’s “servitude,” establishing a “retainer relationship and the accused being “beholden to” the giver.

4 – Ability to Favor Not Required

Under Singapore law, on satisfaction of the “public body” test, there is no requirement for the accused to have the ability to show favor in exchange for the gratification. It is sufficient that the accused believed that the gratification was offered as an inducement to favourable treatment.

In Tey’s case, it was argued that Tey was never in a position to show favour in relation to the student’s grades due to NUS’ anonymous marking system. As the defence failed to rebut the presumption of corrupt intent, Tey’s supposed lack of power to alter grades had no effect on his guilt.

5 – Gift Thresholds in Singapore

Although there is no specific guidance on monetary thresholds of gifts in Singapore law, practical guidance can be found in the approach of public bodies.

The Instruction Manual, published by the Singapore Government, which applies to all Singapore public officials, details when gifts and entertainment can be accepted and when they must be declared. As a matter of practice, all gifts need to be approved by a permanent secretary and only gifts under S$50 can be accepted. Any gifts valued at more than S$50 can only be kept if they are donated to a governmental department or independently valued and purchased from the Government. Taking a slightly different approach, Tey’s case revealed that the NUS Policy on Acceptance of Gifts by Staff requires consent to be sought for all gifts over S$100.

6 – What is a Public Body?

Under Singapore law, the definition of “public body” is broad, encompassing a wide range of bodies on a purposive reading. Both the CNB and SCDF were held to be public bodies, being departments of the Government.

Despite the defence’s arguments, NUS was also found to be a public body in Tey’s case, being a “corporation … which has the power to act… relating to… public utility or otherwise to administer money levied or raised by rates or charges…”, since the public utility include the provision of public tertiary education.

NUS’ receipt of funds from the Government and function as an instrument of implementing the Government’s tertiary education policy further supported the finding that NUS was a “public body.”

7 – Violation of Internal Codes and Policies Can Indicate Corrupt Intent

If internal codes of conduct and policies and procedures are knowingly breached, the court may infer that the accused knew what he did was corrupt. Therefore, knowingly acting in conflict of internal codes or policies invites an inference of guilty knowledge. In Tey’s case, his breach of the NUS Code of Conduct was found to be tantamount to corrupt intent.

8 – Not Every Conflict of Interest Permits the Inference of Corruption

A corrupt element is not always constituted due to the contravention of some code or policy. The fact that Ng’s sexual acts were carried out in the context of a romantic relationship led to the court’s finding that there was no corruption, despite his breach of internal conflict of interest rules.

9 – Statements Can Be Retracted, Credibility Can Be Impeached

The retraction of earlier statements made to enforcement agencies was a common feature. Whilst this is procedurally permitted by the courts, the risk is that the witness’s credibility will be impeached. Applications for impeachment were made in all three cases. However, the court will only impeach witnesses if there are serious discrepancies or material contradictions in their evidence.

Both Lim himself and Ng’s gratification-giver were successfully impeached. One should note, however, that the totality of the impeached witness’ evidence does not have to be rejected by the court. The evidence must be scrutinised to determine what is true and what should be disregarded.

10 – Focus on Abuse of Power and Position

The abuse of power and position has been the common underlying basis.

In Tey’s case, it was determined that there was a clear imbalance of power between Tey and his student. The court emphasised his self-portrayal as a person who could influence her academic prospects, that he revealed her examination results before they were officially released, and that he took her out for lunch and disclosed information to her that was not available to other students.

In Lim’s case, the court pointed to Lim’s substantial control over SCDF’s procurement procedures and noted that, whilst his gratification-giver may not have had direct knowledge of the full extent of his power, she did have an impression of his substantial influence. The court further determined that Lim was aware that she would factor this in when he asked her for oral sex, considering that she did not want her company’s business interests with SCDF to be negatively affected but wanted to have them enhanced.

Conversely, the court in Ng’s case pointed to the lack of imbalance of power, noting that his gratification-giver was not “someone who could be easily taken advantage of or someone who would cower in the fear of persons in authority”.

[A version of this post first appeared on]

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