Thailand’s Experience: Foreign Bribery, Corporate Criminal Liability and Their Impact on Business Integrity

Akharakit Keeratithanachaiyos International Affairs Strategy Specialist

National Anti-Corruption Commission (ป.ป.ช.)

NACC Organizational Structure

9-Member-Commission

Investigation

Receives on average 2000 complaint/year

Both in private & public sector

Prevention

Office of the NACC – 2,400 staff

Secretary-General

Deputy/Assistant Secretary-Generals

Examine assets & liabilities

of politicians & public officials

Asset Examination/ Unusual Wealthiness

National Anti-Corruption Commission

Investigation of public sector corruption and unusual wealth cases:

subpoena powers, search and seizure, witness protection, immunity agreements

Design/implement prevention corruption schemes across the /

public and private sector

Conduct Assets/Liabilities Examination of politicians and specified

high-ranking public officials

Investigate, Freeze and Forfeit proceeds of corruption

Authority to initiate prosecution if the Attorney-General decides not to

prosecute a case forwarded by the NACC

(Powers and duties as stipulated in the Organic Act on Counter Corruption)

https://www.youtube.com/watch?v=7a4jv-Z6BMQ

Parallel Bribery Enforcement Actions: Tourism Authority of Thailand

Paid USD 2 mil.

11 projects = THB 500 mln.

2003-2007

Country where bribes were paid

No. of FCPA cases

China 65

Indonesia 22

India 21

Thailand 12

Vietnam 10

South Korea 8

Malaysia 5

Taiwan 4

Philippines 4

Lao PDR 1

Source: Stanford Law School, FCPA Clearinghouse

Destination of US FCPA Bribes in Asia

Top 10 Monetary Penalties Paid for Violation of the US FCPA

Rank Company Headquartered/ Origin

Sector Year Penalties (USD mln.)

1 Airbus Netherlands/France Aerospace 2020 2,090

2 Petroleo Brasileiro Brazil Oil & Gas 2018 1,780

3 Ericsson Sweden Telecom. 2019 1,060

4 Telia Sweden Telecom. 2017 1,010

5 MTS Russia Telecom. 2019 850

6 Siemens Germany Engineering 2008 800

7 VimpelCom Netherlands Telecom. 2016 795

8 Alstom France Transport. 2014 772

9 Société Générale France Banking 2018 585

10 KBR/Haliburton United States Oil & Gas 2009 579

3rd Revision of the Organic Act on Counter

Corruption: Effective July 2015

Paying bribes to Thai & foreign officials Criminal liability of legal persons Suspension of statute of limitation Value-based forfeiture International cooperation

Thailand’s Law on Corporate Criminal Liability for Bribery Offences

Thailand first introduced corporate criminal liability for bribery in 2015, under

OACC “Section 123/5”

It is also included in new Organic Act on Anti-Corruption B.E. 2561 (2018)

“Section 176”

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More referrals from

domestic and foreign

law enforcement and

regulatory bodies:

share evidence or

parallel investigations

Increased use of

immunity agreements for individuals

Bribery Enforcement Trends:

Hypothetic Case: A Corruption Case of a US$100-Highways Construction Project

Corrupt Politician

Briber: Manager A Awards construction contract

worth $100 million USD

:

• Paid Bribes of $ 20 million USD • Calculated Profit = $30 million USD

Before 15 July 2015

1. Corrupt politician fined and jailed

2. Manager fined and jailed

Typical Enforcement Outcome for a Bribery Case

Corrupt Politician

Manager A

3. US$20 million bribe confiscated as proceeds/instrumentalities of crime

Before 15 July 2015

Has Justice Been Fully Served?

Briber

Who did the manager represent?

Where did the $20 million bribe money come from?

Who is the ultimate beneficiary of the $30 million

profits?

Was the $30 million profits forfeit?

Was Company A directly affected by the

law enforcement action?

Why was Company A not penalized?

Is Company A likely to continue to

engage in similar corrupt conduct?

Before 15 July 2015

Organic Act on Anti-Corruption Section 176

1. Any person who gives, offers to give, or promises to give any property or benefit to a public official, foreign public official, official of a public international organisation with an intent to induce such person to wrongfully perform, not perform or delay the performance of any duty in his or her office shall be liable to an thousand Baht or to both. imprisonment for a term of not exceeding five years or a fine of not exceeding one hundred thousand baht;

2. In case the offender under paragraph one is a person associated with any juristic person and the action was taken for the benefit of such juristic person, provided that such juristic person does not have in place appropriate internal control measures to prevent the commission of such offence, the juristic person shall be deemed to have committed the offence under this Section and shall be liable to a fine of one to two times of the damages caused or benefits received;

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The juristic person under paragraph two shall mean juristic person established under Thai laws and juristic person established under the foreign laws which operates business in Thailand.

A person associated with a juristic person under paragraph two shall mean a representative, employee, agent, affiliated company, or any person acting for or on behalf of such juristic person, regardless of whether having the power or authority to take such action.

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Organic Act on Anti-Corruption Section 176

Employees/agents/intermediaries gave bribes/benefits to Thai/foreign officials, or agents of international organizations (covers state-owned enterprises, consortiums and joint venture partnership);

For the benefit of/to the advantage of the company (regardless of outcome of bribery effort);

Allows for prosecution of both natural and legal persons;

Legal persons shall be criminally liable if the legal person has not put in place sufficient measures to prevent the bribery;

Forfeiture of up to twice the amount of profits received by legal person if criminally convicted;

Forward case to relevant law enforcement (e.g. anti-money laundering office), regulatory (SEC) and tax authorities (Revenue Dept.)

Key provisions of OACC

Section 176

Drafting Committee of the NACC Guidelines on Anti-Bribery Principles

for Legal Persons

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• NACC and relevant public and regulatory bodies

• The Securities and Exchange Commission (SEC)

• The Federation of Thai Industries

• Thai Institute of Directors (IOD)

• Chambers of Commerce

• Professional Associations

“ NACC Guidelines on Appropriate Internal Control Measures for Juristic Persons to Prevent Bribery…”

Periodic review of effectiveness of anti-bribery measures

Fundamental Principles of Internal Control for Legal Persons to Prevent Bribery

NACC Guidelines:

Risk assessment to effectively identify exposure to bribery

Enhanced measures for high-risk and vulnerable areas

Application of anti-bribery measures to business partners

Strong policy and support from top-level management

Accurate books and accounting records

HR policies complementary to anti-bribery measures

Communication channels to encourage reporting of bribery

NACC Seminar on

Empowering the Private Sector in the Fight Against Bribery

1 July 2016

Afternoon Session: over 300 business representatives were divided into 8 face-to-face survey groups according to types of industry to gather their feedback on and suggestions on improving the draft guidance.

Over 300 business representatives from 8 major industries and business sectors participated in survey groups discussions to provide feedback on draft NACC guidelines.

Dinner Talk to Promote Public-Private Collaboration to Fight Against Bribery

September 27, 2017

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National Seminar to Launch NACC Anti-Bribery Guidance for Private Sector (Clean Business, Sustainable Thailand) September 2017

Regional Seminars on Promoting Anti-Bribery Business Culture

North

South

East

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Northeastern

NACC’s key partners The Thai Chamber of Commerce

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NACC’s key partners Joint Foreign Chambers of Commerce

NACC’s key partners Securities and Exchange Commission

of Thailand

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Learn more about the CAC at www.thai-cac.com

See more:

dtac AC Handbook

Telecommunication Industry

In compliance with Principles 1 & 3 of NACC Guidance

Banking and Finance Industry

Whistleblower hotline

Periodic review of anti-bribery compliance systems by third

parties

In compliance with Principle 7 of NACC Guidance

In compliance with Principle 8 of NACC Guidance

Banking and Finance Industry

NACC representative conducting a training workshop for c-suite executives of UOB (Thailand)

In compliance with Principle 4 of NACC Guidance

In compliance with Principle 4 of NACC Guidance

No Gift Polices: Thai State-owned enterprises

In compliance with Principle 3 of NACC Guidance

Promotion of Anti-Bribery Business Culture

Promotion of Anti-Bribery Business Culture

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Available for download at: www.nacc.go.th/abas

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NACC Guidelines on Anti-Bribery Principles

for Legal Persons/Business

Thai English Japanese Chinese