A recent landmark change to Singapore’s criminal justice system providing for Deferred Prosecution Agreements (“DPAs”), or voluntary alternatives to adjudication, should increase corporate accountability for acts of bribery, corruption, and money laundering.
DPAs a Dual-Purpose Enforcement-Prevention Tool
DPAs provide a powerful enforcement tool for prosecutors seeking to hold accountable companies that commit crimes and to prevent unlawful conduct from reoccurring.
Broadly stated, a DPA is an agreement between a prosecutor and a corporate offender, under which the corporate offender commits to meet certain conditions and take certain measures over a period of years in lieu of facing a prosecution for past offenses. These measures may include the payment of a monetary penalty, continued cooperation with the government’s investigation, instatement of a corporate monitor, and implementation of an enhanced compliance program.
DPAs create powerful incentives for compliance. If a corporate offender fails to fulfil the terms of the agreement to the government’s satisfaction, the company faces the looming threat of future prosecution.
Although prosecutors have wide discretion to shape the agreements, DPAs can be subject to judicial approval and oversight. In the U.S., courts have a narrow role in the process, generally approving DPAs without substantial intervention. By contrast, DPAs in the UK are subject to judicial involvement from an early stage. The U.S. and UK DPA frameworks differ in other material respects. For example, U.S. prosecutors have the authority to enter into DPAs for a wide range of offenses, while UK law constrains the use of DPAs to specific offenses.
In an emerging trend, several countries have recently enacted, or have announced plans to enact, their own DPA frameworks. These countries include France, Australia, Canada, and, topically, Singapore.
Singapore Enacts DPA Framework for Money Laundering and Corruption Offenses
The Singaporean government signaled that it would introduce into law its own DPA framework as part of a broader criminal justice reform initiative. On March 19, 2018, the Singaporean parliament passed the Criminal Justice Reform Act, legislation formally enacting DPA provisions as part of Singapore’s Criminal Procedure Code. Modeled on the UK regime, Singapore’s DPA scheme has many recognizable features:
- The law applies to legal entities; therefore, the Public Prosecutor cannot enter into DPAs in connection with the prosecution of an individual;
- The Public Prosecutor may only enter into DPAs with respect to certain offenses set forth in the law, including corruption- and money laundering-related crimes;
- DPAs may require, inter alia, payment of an unlimited monetary penalty, implementation of a compliance program, instatement of a monitor, and ongoing cooperation with the Public Prosecutor in its investigation;
- DPAs are subject to approval by the Singaporean High Court, which must find that a DPA is “in the interests of justice” and its terms are “fair, reasonable and proportionate”; and
- The Singaporean High Court has ongoing supervisory authority with respect to any changes to the terms of DPAs.
It is now crucial that Singaporean corporates evaluate the robustness of their existing compliance functions, to ensure that they operate in a manner that is fully compliant with anti-bribery, corruption, and money laundering laws. Historically, it has been difficult for Singaporean prosecutors to attribute criminal liability to corporates because of the need to prove that an employee sufficiently senior to be considered the “directing mind” of the corporation instructed the illegal activities in question. Upon the introduction of the proposed DPA framework, this will no longer be necessary and Singaporean corporates will be faced with an increasing likelihood of regulatory scrutiny and enforcement activity.