International anti-corruption conventions
To which international anti-corruption conventions is your country a signatory?
Singapore has been a member of the Financial Action Task Force since 1992. It was one of the founding members of the Asia-Pacific Group on Money-Laundering in 1997.
Singapore became a signatory to the United Nations Convention against Transnational Organised Crime on 13 December 2000 and ratified that Convention on 28 August 2007.
Singapore is also a member of the ADB/OECD Anti-Corruption Initiative for Asia and the Pacific, which it endorsed on 30 December 2001.
Singapore was admitted as a member of the Egmont Group of Financial Intelligence Units in 2002.
Singapore became a signatory to the United Nations Convention Against Corruption (UNCAC) on 11 November 2005 and ratified the UNCAC on 6 November 2009.
Foreign and domestic bribery laws
Identify and describe your national laws and regulations prohibiting bribery of foreign public officials (foreign bribery laws) and domestic public officials (domestic bribery laws).
The primary Singapore statutes prohibiting bribery are:
- the Prevention of Corruption Act (the PCA) (Cap 241, 1993 Rev Ed); and
- the Penal Code (Cap 224, 2008 Rev Ed).
The PCA contains provisions (sections 5 and 6) which prohibit bribery in general. The PCA also contains a number of provisions prohibiting bribery in specific situations, some of which are dealt with further below.
The general prohibitions relate to both private commercial activities and acts of a public nature, target both giver and recipient of the bribe and extend to both private individuals and public officials. In addition, there are specific provisions in the PCA (sections 11 and 12) pertaining to domestic public officials. The PCA does not specifically target bribery of foreign public officials, although such bribery could fall under the ambit of the general prohibitions.
The Penal Code also contains provisions (sections 161 to 165) that deal with bribery of public officials. These provisions describe the following scenarios:
- a public servant taking a gratification, other than legal remuneration, in respect of an official act;
- a person taking a gratification in order to influence a public servant by corrupt or illegal means;
- a person taking a gratification for exercising personal influence over a public servant;
- abetment by a public servant of the above offences; and
- a public servant obtaining anything of value, without consideration or with consideration the public servant knows to be inadequate, from a person concerned in any proceedings or business conducted by such public servant.
‘Gratification’ is defined very broadly (see question “To what extent do your anti-bribery laws restrict providing foreign officials with gifts, travel expenses, meals or entertainment?” below).
The provisions in the Penal Code focus on the bribery of domestic public officials.
This is because the term ‘public servant’ is used, which has been defined in the Penal Code to include mainly domestic public officials. By way of example, section 21 of the Penal Code defines a ‘public servant’ to include an officer in the Singapore Armed Forces, an officer of the Singapore government, an officer acting on behalf of the Singapore government and a member of the Public Service Commission or Legal Service Commission.
It should also be noted that the Singapore Interpretation Act defines the term ‘public officer’ as ‘the holder of any office of emolument in the service of the [Singapore] Government’.
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Describe the elements of the law prohibiting bribery of a foreign public official.
As mentioned in the response to question above, there are no provisions in the PCA or the Penal Code which specifically prohibit bribery of a foreign public official. However, the general prohibition against bribery in the PCA, read together with section 37of the PCA (which deems a bribery offence committed outside Singapore by a Singapore citizen to be committed within Singapore), prohibits, in effect, the bribery of a foreign public official by a Singapore citizen. The elements of the law are outlined below.
Under section 5 of the PCA, it is an offence for a person (whether by himself or in conjunction with any other person) to:
- corruptly solicit, receive, or agree to receive for himself or for any other person;
- corruptly give, promise, or offer to any person, whether for the benefit of that person or of another person,
any gratification as an inducement to or reward for or otherwise on account of:
- any person doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed;
- any member, officer or servant of a public body doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which such public body is concerned.
It is also an offence under section 6 of the PCA:
- for an agent to corruptly accept or obtain any gratification as an inducement or reward for doing or forbearing to do any act in relation to his principal’s affairs;
- for a person to corruptly give or offer any gratification to an agent as an inducement or reward for doing or forbearing to do any act in relation to his principal’s affairs; or
- for a person to knowingly give to an agent a false or erroneous or defective statement, or an agent to knowingly use such statement, to deceive his principal.
If the act of bribery takes place outside Singapore and the bribe is carried out by a Singapore citizen, section 37 of the PCA would apply and the offender would be dealt with as if the bribe had taken place in Singapore.
In addition, the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) deals with the prevention of laundering of the proceeds of corruption and crime. Section 47 of the CDSA provides that any person who knows or has reasonable ground to believe that any property represents another person’s benefits from criminal conduct is guilty of an offence, if he conceals, disguises, converts, transfers or removes that property from the jurisdiction for the purposes of assisting any person to avoid prosecution.
Definition of a foreign public official
How does your law define a foreign public official?
As the PCA and the Penal Code do not specifically deal with the bribery of a ‘foreign public official’, the statues do not define this term.
Travel and entertainment restrictions
To what extent do your anti-bribery laws restrict providing foreign officials with gifts, travel expenses, meals or entertainment?
There are no express restrictions in the PCA or Penal Code on providing foreign officials with gifts, travel expenses, meals or entertainment. However, any gift, travel expense, meal or entertainment provided with the requisite corrupt intent will fall within the general prohibition under the PCA, and would constitute an offence.
As noted in the response to question “Describe the elements of the law prohibiting bribery of a foreign public official.” above, the PCA prohibits (amongst other things) the offer or provision of any ‘gratification’ if accompanied with the requisite corrupt intent. The term ‘gratification’ is defined under the PCA to include money or any gift, loan, fee, reward, commission, valuable security or other property or interest in property; any office, employment or contract; any part or full payment, release from or discharge or any obligation or other liability; and any other service, favour or advantage of any description whatsoever.
Do the laws and regulations permit facilitating or ‘grease’ payments?
Neither the PCA nor the Penal Code expressly permits facilitating or ‘grease’ payments. Such payments would technically fall within the general prohibitions against bribery set out in the PCA and the Penal Code.
Payments through intermediaries or third parties
In what circumstances do the laws prohibit payments through intermediaries or third parties to foreign public officials?
Corrupt payments through intermediaries or third parties, whether such payments are made to foreign public officials or to other persons, are prohibited. It is expressly provided in section 5 of the PCA that the offence of bribery can be committed either ‘by himself or by or in conjunction with any other person’.
Individual and corporate liability
Can both individuals and companies be held liable for bribery of a foreign official?
Both individuals and companies can be held liable for bribery offences, including bribery of a foreign official.
The various provisions in the PCA and Penal Code set out certain offences which may be committed by a ‘person’ if such person were to engage in certain corrupt behaviour. The term ‘person’ has been defined in the Singapore Interpretation Act to include ‘any company or association of body of persons, corporate or unincorporated’.
In addition, Singapore case law indicates that corporate liability can be imposed on companies for crimes committed by their employees, agents etc. (see Tom Reck Security Services Pte Ltd v PP  2 SLR 70).
Civil and criminal enforcement
Is there civil and criminal enforcement of your country’s foreign bribery laws?
Yes, criminal enforcement against corrupt activities is provided for in both the PCA and the Penal Code. In particular, if the court rules that there has been a violation of the general prohibitions on bribery in the PCA, a fine and/or imprisonment will be imposed on the offender. The offender may also have to pay the quantum of the bribe as part of the fine imposed.
As for civil enforcement, a victim of corruption will be able to bring its own civil action to recover the property of which it has been deprived. Section 14 of the PCA also expressly provides that, where gratification has been given to an agent, the principal may recover as a civil debt the amount or the money value thereof either from the agent or the person paying the bribe. This provision is without prejudice to any other right and remedy that the principal may have to recover from his agent any money or property.
What government agencies enforce the foreign bribery laws and regulations?
The main government agency which enforces bribery laws in Singapore is the Corrupt Practices Investigation Bureau (CPIB). The CPIB derives its powers from the PCA.
The CPIB carries out investigations into complaints of corruption but does not prosecute cases itself. It refers the cases, where appropriate, to the public prosecutor for prosecution. The PCA provides that no prosecution under the PCA shall be instituted except by or with the consent of the public prosecutor.
A new Economic Crimes and Governance Division was established within the attorney-general’s chambers in January 2011 to focus on and specialise in sophisticated financial crimes and regulatory offences as well as quasi-criminal matters potentially involving cross-border elements. One of the three departments in this new division is the Corruption Directorate (the other two being the Financial & Securities Offences Directorate and the Commercial Affairs Department (CAD) Satellite Office). It is expected that the Economic Crimes and Governance Division led by its chief prosecutor will be tasked, among other things, with the enforcement and prosecution of bribery offences which take place outside Singapore.
Is there a mechanism for companies to disclose violations in exchange for lesser penalties?
The PCA and the Penal Code do not expressly provide for a formal mechanism for companies to disclose violations of bribery laws in exchange for leniency.
While there are no formal mechanisms in place, there has been a recent court ruling in October 2010 involving the CEO of AEM-Evertech, a Singapore-listed company, who exposed corrupt practices by that company’s top management, including himself (see Public Prosecutor v Ang Seng Thor DACs 20430 - 5/2010). In sentencing the CEO, the judge took into consideration the fact that his whistle-blowing helped to secure the conviction of other members of the company’s management. The judge considered this to be a mitigating factor and did not impose a jail sentence on the whistle-blower.
Where companies disclose violations voluntarily, this may similarly be taken into account as a mitigating factor during sentencing. However, as of February 2011, the case was the subject of an appeal.
Can enforcement matters be resolved through plea agreements, settlement agreements, prosecutorial discretion or similar means without a trial?
Prosecutorial discretion is granted to the public prosecutor to initiate, conduct or discontinue any criminal proceedings. It may be possible for a person under investigation to convince the public prosecutor not to initiate criminal proceedings against him.
In the event criminal proceedings have been initiated, an accused person may still submit letters of representation (on a ‘without prejudice’ basis) to the public prosecutor to negotiate the possible withdrawal, amendment, or reduction of charges. The public prosecutor has sole discretion whether to accede to such letters of representation.
It may also be possible for an accused person to plead guilty to certain charges, in return for which the public prosecutor will withdraw or reduce certain other charges. The accused may also plead guilty to the charges brought against him so as to resolve a particular matter without a trial, and then to enter a mitigation plea.
Patterns in enforcement
Describe any recent shifts in the patterns of enforcement of the foreign bribery rules.
The establishment of the Economic Crimes and Governance Division in January 2011 (see question “What government agencies enforce the foreign bribery laws and regulations?” above) could signal an intent to more actively enforce and prosecute complex bribery offences committed outside Singapore, which involve foreign companies and foreign public officials.
Prosecution of foreign companies
In what circumstances can foreign companies be prosecuted for foreign bribery?
Foreign companies can be prosecuted for the bribery of a foreign public official if the acts of bribery were committed in Singapore. Foreign companies could also be prosecuted for bribery that was substantively carried out overseas if the abetment of such bribery took place in Singapore.
What are the sanctions for individuals and companies violating the foreign bribery rules?
The PCA imposes a fine and/or custodial sentence for the contravention of the general anti-corruption provisions under sections 5 and 6 (which include the bribery of foreign public officials in Singapore, and the bribery of foreign public officials overseas by a Singapore citizen when read with section 37). The guilty individual/company may be liable to a fine not exceeding S$100,000 and/or imprisonment for a term not exceeding five years. There are also civil remedies and penalties pursuant to the PCA (see question “Is there civil and criminal enforcement of your country’s foreign bribery laws?” above).
There are other statutes imposing sanctions on the guilty individuals/companies. For example, under the CDSA (see question “Describe the elements of the law prohibiting bribery of a foreign public official.” above), where a defendant is convicted of a ‘serious offence’ (which includes bribery), the court has the power, under section 4, to make a confiscation order against the defendant in respect of benefits derived by him from criminal conduct. Under the Singapore Companies Act, a director convicted of bribery offences may be disqualified from acting as a director.
Recent decisions and investigations
Identify and summarise recent landmark decisions or investigations involving foreign bribery.
There are no recent landmark decisions in Singapore involving foreign bribery. However, in a civil suit recently taken out by technology company Apple Inc in the US courts against its former employee Paul Devine for receiving kickbacks from Asian suppliers (the Apple case), a number of Asian companies have been implicated, including JLJ Holdings, a Singapore-listed company. The CPIB has in 2010 reportedly commenced its own investigations into the staff of JLJ Holdings in connection with the Apple case.
The Singapore franchisee of Inter Ikea Systems BV, which owns and runs the Ikea furniture store, was recently involved in a bribery case involving its former food services manager (the Ikea case). The manager reportedly received kickbacks totalling S$2.4 million in return for favouring a particular food supplier for Ikea’s restaurant. The payer of the bribes has pleaded guilty to the corruption charges and is awaiting sentencing. Although there are no foreign public officials involved, this case demonstrates that international corporations need to be conscious of reputational repercussions to their brands in the event that franchisees or associated parties are involved in corruption.
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Financial record keeping
Laws and regulations
What legal rules require accurate corporate books and records, effective internal company controls, periodic financial statements or external auditing?
The Singapore Companies Act is the main statute which regulates the conduct of Singapore-incorporated companies. It contains provisions on audit, reporting and corporate governance.
Among other things, the Companies Act requires keeping of proper corporate books and records, maintaining of proper accounting records (including the profit and loss accounts and balance sheet of the company), appointment of external auditors, and filing of annual returns.
Companies that do not comply with the laws and regulations are answerable to the CAD and the Accounting and Regulatory Authority of Singapore (ACRA).
Singapore-listed companies are subject to even more stringent disclosure, auditing and compliance requirements as provided by the Securities and Futures Act, the Listing Rules and other relevant rules.
Disclosure of violations or irregularities
To what extent must companies disclose violations of anti-bribery laws or associated accounting irregularities?
The CDSA (see question “Describe the elements of the law prohibiting bribery of a foreign public official” above), through section 39, imposes reporting obligations on persons who know or have reasonable grounds to suspect that there is property which represents the proceeds of, or that was used or intended to be used in connection with, criminal conduct. Criminal conduct includes acts of bribery (which potentially extends to acts of bribery overseas). A breach of these reporting obligations attracts a fine of up to S$20,000. The Criminal Procedure Code also imposes a reporting obligation in respect of most of the corruption crimes (relating to bribery of domestic public officials) set out in the Penal Code.
Apart from these express reporting and disclosure obligations under the CDSA and the Criminal Procedure Code, the requirements imposed by the Companies Act, Securities and Futures Act, Listing Rules and regulations issued by the Monetary Authority of Singapore (to certain regulated financial institutions) may also impose obligations on a company to disclose corrupt activities and associated accounting irregularities.
Prosecution under financial record keeping legislation
Are such laws used to prosecute domestic or foreign bribery?
No. The laws primarily used to prosecute domestic or foreign bribery are the PCA and the Penal Code.
Sanctions for accounting violations
What are the sanctions for violations of the accounting rules associated with the payment of bribes?
There are no specific accounting rules associated with the payment of bribes in Singapore.
Sanctions for violations of the laws and regulations relating to proper account-keeping, auditing, etc, include fines and terms of imprisonment. The amount of any fine and length of imprisonment will depend on the specific violation in question. Liability may be imposed on the company, directors of the company and other officers of the company.
Tax-deductibility of domestic or foreign bribes
Do your country’s tax laws prohibit the deductibility of domestic or foreign bribes?
Tax deduction for bribes (whether domestic or foreign bribes) is not permitted. Bribing is an offence under the PCA and the Penal Code.
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Describe the individual elements of the law prohibiting bribery of a domestic public official.
The general prohibition on bribery in the PCA (see question “Describe the elements of the law prohibiting bribery of a foreign public official” above) specifically states, at section 5, that it is illegal to bribe a domestic public official. Where it can be proved that gratification has been paid or given to a domestic public official, section 8 provides for a rebuttable presumption that such gratification was paid or given corruptly as an inducement or reward.
Prohibition of the bribery of a domestic public official is also set out in sections 11 and 12 of the PCA as outlined below.
Section 11 relates to the bribery of a member of parliament. It is an offence for any person to offer any gratification to a member of parliament as an inducement or reward for such member’s doing or forbearing to do any act in his capacity as a member of parliament. It will also be an offence for a member of parliament to solicit or accept the above gratification.
Section 12 relates to the bribery of a ‘member of a public body’. A ‘public body’ is defined as any corporation, board, council, commissioners or other body which is empowered to act under any Singapore legislation relating to areas including (but not limited to) public health, public utility or taxation. It is an offence for a person to offer any gratification to a member of such a public body as an inducement or reward for:
- the member’s voting or abstaining from voting at any meeting of the public body in favour of or against any measure, resolution or question submitted to that public body;
- the member’s performing, or abstaining from performing, or aid in procuring, expediting, delaying, hindering or preventing the performance of, any official act; or
- the member’s aid in procuring or preventing the passing of any vote or the granting of any contract or advantage in favour of any person.
It will, correspondingly, be an offence for a member of a public body to solicit or accept such gratification described above.
The Penal Code also sets out a number of offences relating to domestic public officials (termed ‘public servant’). The prohibited scenarios are outlined in question “Identify and describe your national laws and regulations prohibiting bribery of foreign public officials (foreign bribery laws) and domestic public officials (domestic bribery laws).” above.
Does the law prohibit both the paying and receiving of a bribe?
Yes. Singapore law prohibits both the paying and receiving of a bribe. In particular, sections 5, 11 and 12 of the PCA prohibit both the paying of a bribe to, and receiving of a bribe by, a domestic public official.
How does your law define a public official and does that definition include employees of state-owned or state-controlled companies?
The provisions in the PCA pertaining to domestic public officials refer to a ‘member, officer or servant of a public body’. There are also specific provisions at section 11 in respect of members of parliament.
‘Public body’ has been defined in section 2 of the PCA to mean any ‘corporation, board, council, commissioners or other body which has power to act under and for the purposes of any written law [ie, Singapore legislation] relating to public health or to undertakings or public utility or otherwise administer money levied or raised by rates or charges in pursuance of any written law’.
The provisions in the Penal Code pertaining to domestic public officials use the term ‘public servant’. This has been defined in section 21 to include an officer in the Singapore Armed Forces, a judge, an officer of a court of justice, an assessor assisting a court of justice or public servant, an arbitrator, an office-holder empowered to confine any person, an officer of the Singapore government, an officer acting on behalf of the Singapore government and a member of the Public Service Commission or Legal Service Commission.
It would appear from the above definitions under the PCA and the Penal Code that an employee of state-owned or state-controlled companies may not necessarily be a domestic public official. Such employees of state-owned or state-controlled companies may be considered domestic public officials if they fall within the definitions set out in the PCA and the Penal Code.
It should also be noted that the Singapore Interpretation Act defines the term ‘public officer’ as ‘the holder of any office of emolument in the service of the [Singapore] Government’.
Public official participation in commercial activities
Can a public official participate in commercial activities while serving as a public official?
The Singapore government instruction manual (instruction manual), which applies to all Singapore public officials, contains provisions to prevent conflicts of interest from arising and prohibits domestic public officials from holding shares in private companies (unless prior approval is obtained from the appropriate authority). The CPIB also advises domestic public officials not to undertake any paid part-time employment or commercial enterprise without the written approval of the appropriate authorities. Subject to such safeguards and approvals, a public official is allowed to participate in commercial activities while in service.
Travel and entertainment
Describe any restrictions on providing domestic officials with gifts, travel expenses, meals or entertainment. Do the restrictions apply to both the providing and receiving of such benefits?
The analysis in the response to questions “To what extent do your anti-bribery laws restrict providing foreign officials with gifts, travel expenses, meals or entertainment?” above will apply to both the providing and receiving of such benefits.
It should also be noted that domestic public officials are not permitted to receive any money or gifts from people having official dealings with them, nor are they permitted to accept any entertainment etc. that will place them under any real or apparent obligation.
Gifts and gratuities
Are certain types of gifts and gratuities permissible under your domestic bribery laws and, if so, what types?
There are no specific types of gifts and gratuities which are considered permissible under the PCA and the Penal Code. Any gift or gratuity is potentially caught by the PCA and Penal Code if accompanied with the requisite corrupt intent, and if the other elements required by the statutes are met.
Domestic public officials are also subject to the instruction manual, which contains guidelines regarding the receipt of gifts and entertainment by public officials.
Private commercial bribery
Does your country also prohibit private commercial bribery?
Yes. The PCA contains provisions which prohibit bribery in general, and these prohibitions extend to both private commercial bribery as well as bribery involving public officials.
Penalties and enforcement
What are the sanctions for individuals and companies violating the domestic bribery rules?
The sanctions for individuals and companies violating the domestic bribery rules are similar to those set out in question “What are the sanctions for individuals and companies violating the foreign bribery rules?” above, save for the following.
The penalties for bribery of domestic public officials under the PCA are harsher than those for general corruption offences. While the general bribery offences under sections 5 and 6 are punishable by a fine not exceeding S$100,000 and/or imprisonment not exceeding five years, the bribery of a member of parliament or a member of a public body under sections 11 and 12 respectively may result in a fine not exceeding S$100,000 and/or imprisonment for a term not exceeding seven years.
In addition, the domestic public official involved in corruption would be exposed to departmental disciplinary action, which could result in punishment such as dismissal from service, reduction in rank, stoppage or deferment of salary increment, fine or reprimand and/or involuntary retirement.
Furthermore, the instruction manual debars companies that are guilty of corruption involving public officials (which probably refers to domestic public officials) from public contract tenders. Other measures include the termination of an awarded contract and the recovery of damages from such termination.
Have the domestic bribery laws been enforced with respect to facilitating or ‘grease’ payments?
As stated in question “Do the laws and regulations permit facilitating or ‘grease’ payments?” above, facilitating or ‘grease’ payments are technically not exempt under Singapore law.
In particular, as regards domestic public officials, section 12 of the PCA prohibits the offering of any gratification to such officials as an inducement or reward for the official’s ‘performing, or… expediting… the performance’ of any official act. Correspondingly, it is also an offence under section 12 of the PCA for the domestic public official to accept any gratification intended for the purposes above.
Recent decisions and investigations
Identify and summarise recent landmark decisions and investigations involving domestic bribery laws, including any investigations or decisions involving foreign companies.
The Apple case (mentioned in question “Identify and summarise recent landmark decisions or investigations involving foreign bribery.” above) highlights the impact foreign proceedings or investigations can have on triggering parallel investigations by the CPIB in Singapore. The Ikea case (also mentioned in question “Identify and summarise recent landmark decisions or investigations involving foreign bribery.” above) demonstrates the need for foreign companies to be aware of international reputational repercussions if their local franchisees or associated parties are involved or implicated in corruption.
An investigation has been commenced by the CPIB into a S$380 million motorsports project called the Changi Motorsports Hub. The tender, which was announced in 2009 by the Singapore Sports Council, awarded the 30-year project to the SG Changi Consortium in March 2010. The CPIB was reportedly tipped off about possible irregularities in the tendering process, in particular, the leakage of information.
There have also been other recent decisions involving domestic bribery laws, primarily the bribery of domestic police officers. These cases affirm the position that a custodial sentence is the norm where the bribery involves a domestic public official.
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Update and trends
There is a growing awareness that bribery and corruption, often coupled with elements of fraud and money-laundering, are becoming increasingly complex and trans-national in nature. Given the effect of international anti-corruption laws with broad extraterritorial reach and the position of Singapore as an international financial centre, the Singapore authorities appear to be focusing their attention and resources on combating sophisticated financial crime. The Singapore attorney general commented in January 2010 that ‘corporate criminals can often afford to buy the best legal advice from all over the world; we intend to match them brain for brain’. The following year, in January 2011, the Economic Crimes and Governance Division (referred to in question “What government agencies enforce the foreign bribery laws and regulations?”) was established.
International corporations, often with regional headquarters established in Singapore, operate in emerging markets in Asia and are likely to be subject to stringent anti-corruption laws such as the US Foreign Corrupt Practices Act 1977 and the more recent UK Bribery Act 2010. Given the exposure to high risk locations, the perception of a pervasive culture of corruption in some Asian countries and the common business practice of using third party local agents to act on their behalf, the emerging trend is for such international corporations to review their internal positions and ensure that they have an anti-corruption culture and adequate procedures in place, including effective compliance programmes, to prevent bribery from occurring.
Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through - Anti-Corruption Regulation 2011, (published in April 2011; contributing editor: Homer E Moyer Jr). For further information please visit www.GettingTheDealThrough.com.
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