In light of Singapore’s approach to corporate criminal liability for bribery and corruption, the use of the ‘conditional warning’ by the Singapore authorities in a recent global resolution involving the U.S. and Brazil was a novel development.
Under the terms of the global resolution, the Singapore Corrupt Practices Investigation Bureau (CPIB) issued a ‘conditional warning’, including an undertaking by the Singapore corporation to make payment of a stipulated sum, for corruption offences under section 5(1)(b)(i) of the PCA, as part of the total criminal penalties imposed pursuant to the global resolution.
A ‘conditional warning’ is a variant of a ‘stern warning’, which is an exercise of prosecutorial discretion granted to the Attorney-General as the Public Prosecutor and is not governed by written law. Neither ‘stern warning’ nor ‘conditional warning’ result in a conviction; the accused person will not have any criminal record for the infraction. The difference between a ‘stern warning’ and a ‘conditional warning’ lies in the stipulation that the public prosecutor’s exercise of his discretion not to prosecute is contingent on the recipient’s fulfilment of certain conditions, typically to stay crime-free for a period of between 12-24 months and/or to pay a sum of money as compensation or restitution to the victim. Traditionally, ‘conditional warnings’ were used in minor criminal offences involving youths or in a community/domestic context as a means of diverting such cases from the criminal justice system.
In a recent Singapore High Court decision, PP v Wham Kwok Han Jolovan  1 SLR 1370, the legal effect of a ‘stern warning’ was considered. In that case, the High Court held that a ‘stern warning’ was not binding on its recipient such that it affected his/her legal rights, interests or liabilities, and that it is ‘no more than an expression of the relevant authority that the recipient has committed an offence… [i]t does not and cannot amount to a legally binding pronouncement of guilt or finding of fact.’
In this regard, the use of the ‘conditional warning’ mechanism by Singapore authorities to resolve the criminal violations as part of the global resolution was a novel development.
First, as ‘conditional warnings’ are not governed by written law, such resolutions are opaque and lack transparency. It is not common for the terms of a ‘conditional warning’ to be made public; the exact terms of such warnings are typically known only to the offender and the authorities.6 While it may be argued that opacity and lack of transparency of a ‘conditional warning’ may not be a cause for major concern in cases involving minor offences because the stakeholders involved are few and the impact of the conduct is likely to be localised, this may not be the case for serious corporate criminal conduct, which has the potential of impacting a greater number of stakeholders, such as shareholders, employees and other third parties across multiple jurisdictions. To this end, it should be noted that in jurisdictions such as the United States and UK, DPA resolutions are often accompanied with statements of facts that detail the misconduct of the corporate entity, which serve to inform the public about the degree of wrongdoing and provide a level of transparency to the process of achieving the resolution.
Second, under the terms of the global resolution, the payment made to the Singapore authorities far exceeded the maximum fine of S$100,000 per charge under the PCA. While being able to extract a penalty far in excess of what is provided for under written law may be desirable from an enforcement perspective, it is nevertheless dissonant and suggests that the current state of the law may require amendment.
Third, as warnings in general are not legally binding pronouncements of guilt or findings of fact, it is likely that in the event the recipient breaches any of the terms of the ‘conditional warning’ and a decision is made to prosecute the company, authorities in Singapore will need to embark on the usual criminal justice process against the company, without the benefit of relying on documents such as a statement by the company setting out the company’s formal admission of the misconduct to aid in the prosecution. In such a case, as prosecution would have possibly been delayed by a few years, the prosecution would find further challenges in collating evidence.
Fourth, this resolution potentially marks a shift in focus for Singapore authorities, who have traditionally focused on personal criminal liability (see above), to one that focuses on ensuring both corporates and individuals remain accountable for criminal misconduct.
In light of the issues raised, the use of the ‘conditional warning’ to participate in a global resolution is certainly unprecedented. While it allowed Singapore to achieve a robust outcome, the ‘conditional warning’ approach may not necessarily be the most appropriate tool to be employed in future similar cases in light of the concerns raised above.