Asiaanti Corruption

Asiaanti-corruption
Herbert Smiths Asia anti-corruption report | issue 1 Summer 2012
2 | Asiaanti-corruption Summer 2012
Contents
In this issue:
Introduction Part 1: The international anti-corruption environment (i) The Foreign Corrupt Practices Act (ii) The UK Bribery Act Part 2: Recent anti-corruption developments in Asia Bangladesh Cambodia China Hong Kong India Indonesia Japan Macau Malaysia Mongolia Myanmar Pakistan Philippines Singapore South Korea Sri Lanka Taiwan Thailand Vietnam 3 4 4 10 14 14 16 18 22 24 28 30 32 36 38 40 42 44 45 46 48 49 51 53
Herbert Smiths Asia anti-corruption report | issue 1 (Summer 2012)

The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specic legal advice about your specic circumstances should always be sought separately before taking any action based on this publication. Herbert Smith LLP 2012
Asiaanti-corruption Summer 2012 | 3
Introduction
Welcome to the rst edition of our Asia anti-corruption report. The aim of the report is to bring together the latest developments in cross-border and domestic anti-corruption matters arising out of business conducted in Asia. The report is divided into two sections. The rst provides an overview of the US FCPA and UK Bribery Act and considers the latest general enforcement trends relating to these far-reaching statutes. The second considers, on a country-bycountry basis, the latest developments in anti-corruption matters for each of 19countries throughoutAsia. The report has been compiled by the members of our investigations and compliance team located in our ofces throughout Asia. Our team has a unique combination of international experience (which includes regularly advising on US FCPA and UK Bribery Act issues) and knowledge of local anti-corruption environments. These are interesting times for anyone involved in anti-corruption work. Over the last couple of years, we have seen an unprecedented number of enforcement actions in the US. Further, the arrival of the Bribery Act in the UK promises to change the anti-corruption landscape for all UK corporates, and those conducting part of their business in the UK. Meanwhile, on the domestic front in Asia, many countries are starting to implement tough local anticorruption laws. These developments come at a time when international businesses are increasingly looking towards Asia to expand. And they are nding that doing business in Asia can be a double-edged sword. While there are often unparalleled business opportunities in the region, endemic corruption in some countries and deep-rooted cultural business practices, such as gift giving, make it increasingly difcult for businesses to navigate international and domestic anti-corruption laws. We have recently produced two updated publications which may be of interest to readers. Our Guide to Anti-corruption Regulation in Asia provides a basic overview of the anti-corruption regimes in selected jurisdictions in the region. Our other title, Gifts and Entertainment Compliance with Anti-bribery regulation in Asia, is a brief and practical introduction
to the laws and regulations relating to the provision of gifts and entertainment to clients, and potential clients, in the key Asian nancial centres. If you would like a hard copy of these publications, please email asia.publications@herbertsmith.com. We hope you nd this report useful. We will be publishing it twice a year. As always, we welcome any feedback from readers. Please contact me if you have any suggestions or comments.
Kyle Wombolt Head of Investigations and Compliance Herbert Smith, Asia T: +852 2101 4005 kyle.wombolt@herbertsmith.com
Part 1: The international anti-corruption environment

(i) The Foreign Corrupt Practices Act
FCPA introduction Enacted in 1977, the Foreign Corrupt Practices Act (FCPA) makes it unlawful for persons or companies to make corrupt payments or to provide anything of value to non-US public ofcials, parties or candidates, in order to assist in obtaining or retaining business. The FCPA also obligates companies subject to the jurisdiction of the Securities and Exchange Commission (SEC) to maintain heightened accounting standards designed to deter and detect bribery. The Department of Justice (DOJ) has primary responsibility for enforcing the anti-bribery provisions of the FCPA while the SEC generally enforces the accounting (books and records and internal controls) provisions. FCPA jurisdiction The DOJ has broadly interpreted the FCPA jurisdictional provisions, which apply to issuers and domestic concerns as well as ofcers, directors, employees, agents or shareholders acting on behalf of any issuer or domestic concern. An issuer for this purpose is an issuer of securities listed and traded on a US exchange. It is important to note that many foreign issuers with American Depository Receipts listed on a U.S. exchange are issuers for purposes of the FCPA. A domestic concern includes: Any person who is a citizen, national, or resident of the US; or Any business entity having its principal place of business in the US or which is organised under the laws of any state.
With the enactment of certain amendments in 1998, the anti-bribery provisions of the FCPA also apply to foreign rms and persons who cause, directly or through agents, an act in furtherance of a corrupt payment to take place within the territory of the United States. FCPA anti-bribery provisions The primary elements of the bribery offence under the FCPA are as follows: (a) a payment of - or an offer, authorisation, or promise to pay - money or anything of value, directly or through a third party Anything of value can constitute a bribe, including: cash, cash equivalents, tangible and intangible property, loans, promises of future employment, scholarships and sports tickets. Payments do not have to be made directly by a company employee to create potential liabilities under the FCPA. A company, for example, may be liable for payments made by an agent or third party if the company authorises the payment or if it had knowledge (or should have had knowledge) that the improper payment would be made.
(b) to any non-US ofcial A non-US ofcial can mean any ofcer or employee, regardless of rank or position, of a foreign government, a public international organisation (such as the United Nations), a sovereign wealth fund, or a state-owned enterprise. For example, in China, an employee of any of the big state-owned banks, or a professor at a state-run university, may be deemed a non-US ofcial under the FCPA.
(c) for the corrupt purpose of inuencing an ofcial decision The person making or authorising the payment must have corrupt intent, and the payment must be intended to induce the recipient to misuse his ofcial position and direct business wrongfully to the payer or to another person. This corrupt purpose element is interpreted broadly. Individuals or corporations that deliberately ignore events that should have put them on notice of an improper payment may be prosecuted for knowing that the payment would be passed on to a foreign ofcial. Liability cannot be avoided under the FCPA simply by sticking your head in the sand.
(d) in order to assist the company in obtaining or retaining business or in directing business to any person or to secure an improper advantage The obtain or retain business element has a broad application and will be satised even if the improper payment to the foreign ofcial does not lead to a government contract. Further, the receipt of favourable reports from governmental agencies, tax breaks and operating licenses and permits have been prosecuted as improper advantages.
Permissible payments and afrmative defences The FCPA contains an exception to the bribery prohibition for facilitating payments for routine government action. It also provides afrmative defences which can be used to defend alleged violations of the FCPA: Payments expressly permitted by the written laws of the host country (the rst afrmative defence); and Payments which constitute reasonable and bona de expenditures, such as travel and lodging expenses, incurred in relation to the promotion or demonstration of the payors products or services or the execution or performance of a contract between the payor and the foreign ofcials employer (the second afrmative defence).
FCPA accounting provisions The FCPA also imposes record-keeping provisions that require companies to (a) keep accurate books and records and (b) maintain internal controls that may avoid or identify activities associated with bribery. These provisions are primarily designed to prevent the payment of bribes and keep companies from covering up illicit overseas transactions. (a) Books and records provision The FCPA requires companies to keep books and records in reasonable detail. For example, accounting records must disclose the following types of transactions: political contributions, income tax violations, customs violations, payments to government ofcials and extraordinary gifts.
(b) Internal controls provision The FCPA also requires companies to devise and maintain a system of internal accounting controls sufcient to ensure that transactions are executed in accordance with management authorisations, and are correctly recorded and reviewed.
Penalties Companies and individuals convicted of offences under the FCPA potentially face both criminal and civil penalties. Individuals violating the statutes anti-bribery provisions are subject to up to ve years imprisonment and a US$250,000 ne or a ne totalling twice the pecuniary gain or loss resulting from the bribe. Corporations and other business entities face nes of up to US$2 million or twice the pecuniary ne or loss resulting from the bribe. Individuals violating the accounting provisions face potential nes of up to US$5 million and imprisonment for up to ve years, and corporations and other business entities may be ned as much as US$25 million for such violations. Individuals and organisations also face potential nes for civil violations of the FCPA.
Part 1:
The international anti-corruption environment (continued)

Recent trends and statistics in FCPA enforcement The volume, size, and diversity of FCPA actions have increased in recent years. As the chart below shows, there were roughly ten times the number of enforcement actions by the SEC and DOJ in 2010 compared to 2005. That number returned to earth in 2011, when the SEC and DOJ undertook a combined 46 enforcement actions. Nevertheless, while the number of cases in 2010 may have been an anomaly, there has been a clear upward trend in enforcement actions over recent years and this trend looks set to continue.
Annual SEC/DoJ enforcement actions - 2005-2011
60
50
40 30 20 10
0
2005
2006
2007
2008
2009
2010
2011
SEC
DoJ
As the below graph shows, there has similarly been a signicant increase in the size of penalties imposed for violations of the FCPA in the past seven years. Again, 2010 may have been a statistical anomaly, with three monetary settlements alone combining to achieve over US$1 billion in penalties, disgorgements, and nes. Nonetheless, those three 2010 settlements aside, the US authorities have collected on average about US$400 million in disgorgement and penalties for violations of the FCPA over each of the previous four years.
Annual SEC/DOJ Penalties (US$ 100 million)
14 12 10
12.9
8 6 4 2
0.21
0
5.1 4.4 3.8
0.76 2006
0.76 2007 2008 2009 2010 2011
2005
Fine (US$ 100 million)
A further trend has seen US authorities have recently exhibited an increased appetite for prosecuting foreign corporations. Nine of the ten largest dollar-value enforcement actions have been against foreign corporations. In the Bonny Island case involving bribes paid to Nigerian ofcials in relation to the construction of liqueed natural gas facilities, a Japanese company was held liable as a partner in the contracting joint venture company, even though it was not a US issuer and committed no relevant acts in the United States. The US authorities based their jurisdiction onthe fact that the Japanese company had allegedly authorised the joint venture company to hire two agents to pay the bribes using a means and instrumentalities of interstate commerce. In particular, employees and agents of the company caused wire transfers of approximately US$132 million to be sent from Amsterdam to bank accounts in NewYork, which were then further credited to one of the agents bank accounts for payment on to foreign ofcials inNigeria.
Number of US and non-US companies prosecuted by SEC/DOJ - 2005-2011
30
26
25
20 15 10
12 15 15 12 7 4 2
0
13 11
6 2 2007 2008 2009 2010
5
2 2006
2005
2011
US defendant
Non-US defendant
Asia has continued to be a hot spot for enforcement efforts by the DOJ and SEC, with approximately one fth of all enforcement actions arising out of conduct allegedly taking place in the region between January 2010 and April 2012.
15%
20%
SEC/DOJ enforcement actions - conduct by region January 2010 to April 2012 Asia-Pacific 17% Africa Latin America Central America Europe Middle East Other
10%
14% 20% 4%
Within Asia, conduct relating to business in China, Indonesia, and Thailand accounted for nearly two thirds of the DOJ and SEC enforcement actions over the last two years.
SEC and DOJ Enforcement Actions involving Asia-related conduct - breakdown by country - 2010/2011
18 16
17
12
12
10
8
6
5 4 4 2 4 2 2
4 2
0
Indonesia
Malaysia
China
South Korea
India
Myanmar
Bangladesh
Thailand
Vietnam
Taiwan
FCPA enforcement actions
14
13
Number of companies
Part 1:

Political opposition to increase in enforcement In November 2011, the head of criminal enforcement for the DOJ, Lanny Breuer, announced that the DOJ would issue guidance on the FCPA for the rst time in 23 years. The guidance, however, is unlikely to signicantly limit the scope of conduct covered by the FCPA, or otherwise diminish the aggressive prosecution of corruption-related offenses under the FCPA. In a speech during March 2012, Breuer remarked, Whatever we do, we will not be weak in our commitment to the FCPA and other statutes, nor will we be weak in enforcing it. Nevertheless, there is considerable political pressure in Washington to make pro-business amendments to the FCPA. For example, in a 21 February 2012 letter, the US Chamber of Commerce Institute for Legal Reform outlined proposals for reform and requested that the DOJs guidance include clarications of a number of issues particularly relevant to businesses operating in Asia. The letter included the following requests: Clarication on what types of entities are considered instrumentalities of a foreign government, including that the DOJ: identify the percentage ownership or level of control by a foreign government that will ordinarily qualify as an instrumentality; and clarify that in order for a company to be considered an instrumentality it must perform governmental or quasi-governmental functions, and identify any exceptions to the foregoing general principles.
Importantly, these clarications would address concerns particularly relevant to businesses operating in markets such as China, where current (vague) interpretations have rendered most employees of state-owned enterprises as foreign ofcials under the FCPA. Establishment of clear standards for gifts and hospitality that ordinarily will not be subject to enforcement action. Like any clarication on government entities, guidance on gifts and hospitality will be particularly relevant to corporations operating in Asia where gift-giving norms differ markedly from those in Western countries. Clarication on what constitutes a sufcient compliance program including what standards businesses may adopt and incorporate as part of their compliance programs, and what components are considered essential to a robust FCPA compliance programme. Clarication around how the DOJ and the SEC factor voluntary disclosures by company employees into enforcement decisions. Limitation of a companys liability for acts of its foreign subsidiaries to circumstances where the parent company had knowledge of the subsidiarys operations. Addition of a wilfulness element for the imposition of corporate criminal liability. Limitation of a companys successor liability for prior acts of an acquired company. Clarication on any of these areas would be welcome to corporations operating in any high-risk jurisdictions in Asia. It remains to be seen, however, whether the DoJ will adopt any of these reforms. To date, the DOJ has not given much insight into what aspects of the FCPA it intends to clarify with its forthcoming guidance. Further, given the upcoming presidential elections in the US, it is difcult to predict how a change in administration will affect the continuing enforcement of the FCPA.
Dodd-Frank whistle-blower incentives will likely give rise to new investigations On 25 May 2011, the SEC approved its rules implementing the whistleblower award programme established by the Dodd-Frank Act. These rules state that a whistle-blower providing original information to the SEC shall be eligible to receive 10% - 30% of any enforcement award resulting from that information. Given the size of recent FCPA awards, the rules give insiders with knowledge of FCPA violations considerable incentive to report violations of the FCPA to the US authorities. The SECs rst report on the whistleblower programme, released on 15 November 2011, noted that the SEC received 334 whistleblower tips during the seven week period following the effective date of the implementing rules. Only 13 of these tips involved FCPA violations, though the number of FCPA-related reports is likely to increase. Despite substantial political opposition to Dodd-Frank, it is unlikely that the whistleblowing provisions will change in the coming year. Many of our clients have taken steps to modify their own corporate reporting guidelines to incentivise internal reporting, and protect the company from rogue employees who may improperly seek an award under the Dodd-Frank programme. Aggressive investigative tactics failed to meet expectations The uptick in enforcement has seen the US authorities implement aggressive investigative tactics to build cases against would-be bribe payers. These tactics have had mixed results. Most recently, on 22 February 2012, the DOJ dropped FCPA charges against 22 individual defendants targeted as part of a massive sting operation in which the investigations targets were asked to participate in a purported US$1.5 million bribe to the Gabonese Minister of Defence in order to win defence contracts. The DOJs decision followed disappointing results from two previous sixmonth trials in the same case, which resulted in hung juries. Despite these embarrassing results, the FBI and DOJ appear undeterred in their use of aggressive techniques such as stings and wiretaps. In addressing these concerns, Charles Duross, the deputy chief of the DOJs fraud section, stated Its not the rst time and it wont be the last. Those are tried and true law enforcement techniques. Conclusion Prosecuting FCPA violations has remained a priority under the current administration. The DOJ has aggressively pursued both corporates and individual executives over the last few years, and continues to do so in 2012. While novel investigatory methods have not had success in the courtroom, this is unlikely to deter the enforcing authorities. And, with the increasing importance of Asia in the global business market, we are likely to continue to see a growing number of enforcement actions arising out of business conducted in the region over the next few years.
Part 1:

(ii) The UK Bribery Act
UK Bribery Act - overview The Bribery Act came into force on 1 July 2011. It is far-reaching, both in terms of the offences it creates and its jurisdictional reach, and promises to have a substantial impact on the international ght against corruption. In a number of respects, the Act is wider than the FCPA. The Act creates a number of offences: An offence of active bribery (ie, giving, promising or offering a bribe); An offence of passive bribery (ie, requesting, agreeing to receive or accepting a bribe); A specic offence of bribing a foreign public ofcial; and A new corporate offence which applies where a corporation or partnership fails to prevent those performing services on their behalf from paying bribes.
Active and passive bribery The active and passive bribery offences apply to acts undertaken in the UK, and extra-territorially to acts undertaken outside the UK, by persons with a close connection with the UK (including UK companies, British citizens and UK resident individuals). They also apply in both the public and private sectors. The Act does not specify the nature of prohibited benets and merely refers to providing another with nancial or other advantage. Accordingly, any payment, gift, hospitality or other form of benet is potentially caught where it is provided with the intention of inducing the recipient to act improperly, or rewarding the recipient (or another), for acting improperly.
Bribing a foreign public ofcial The Bribery Act prohibits bribing a foreign public ofcial with the intention of inuencing that ofcial and with the intention of obtaining an advantage as a result. It is somewhat wider than the active bribery offence in that, to be caught by the active bribery offence, the donor must be intending to inuence the recipient to do something improper, whereas the foreign public ofcial offence merely requires the donor to be intending to inuence the foreign public ofcial, and it is not necessary to prove that the donor intends that the ofcial should act improperly. Unlike the FCPA, there is no exclusion for facilitation payments made to foreign public ofcials. Such payments are prohibited under the Bribery Act, unless the foreign ofcial is permitted or required to be inuenced by such payments under the written law applicable in the relevant country.
Liability of senior ofcer The Act also has implications for senior ofcers (including directors, managers and secretaries) of companies involved in bribery. If any of the active, passive or foreign public ofcial offences are committed by a company with the consent or connivance of a senior ofcer of the company, that senior ofcer may be held to have committed a criminal offence.
Corporate offence Probably the most far reaching provision of the new legislation is the corporate offence. Before the enactment of this section, corporate prosecutions for bribery were rare in the UK due to the difculty of proving that those at the company with a directing mind and will (ie, directors and senior management) had been aware of the relevant conduct. This gave rise to a concern that companies were largely avoiding liability for corrupt acts and were not taking sufcient responsibility for the conduct of their employees. The corporate offence is partly aimed at addressing this by imposing strict liability on a company for the acts of its employees (and others who perform services on its behalf). The offence is committed where a company or partnership fails to prevent those performing services on its behalf from paying bribes to win business for it. The only defence is to show that an organisation had in place adequate procedures to prevent such bribery. The government has issued six guiding principles for companies to assist them in determining whether their compliance programs constitute adequate procedures for the purpose of the Act. The offence has very broad jurisdictional scope. It applies not only to companies and partnerships incorporated and formed in the UK, but also to non-UK incorporated companies and partnerships which carry on a business, or part of a business, in the UK. There are potentially heavy penalties for breaches of the Bribery Act. Persons convicted of the active, passive or foreign public ofcial offences are subject to unlimited nes or 10 years imprisonment. Corporations convicted for failing to prevent bribery are subject to an unlimited ne.
Part 1:
Recent UK Bribery Act developments Guidance A number of guidance documents concerning the Bribery Act and the application of its provisions have been issued over recent months. These include: the Ministry of Justice guidance on adequate procedures issued in March 2011, referred to above; the joint prosecution guidance issued by the Serious Fraud Ofce (SFO) and Department of Public Prosecutions in March 2011; the guidance from the British Standards Institute issued in November 2011; the Transparency International guidance issued in July 2010; and the FSA and BBA guidance issued in June 2011 and December 2011 respectively which apply to their respective regulated entities. None of the guidance operates as a carve-out to the Act and much of it is broad brush. It is nonetheless helpful, particularly given that we are unlikely to see a body of case law developed by the courts for a number of years.
Enforcement In November 2011, the Crown Prosecution Service secured its rst conviction under the Bribery Act. Munir Patel, a court clerk in London, was caught during a newspaper sting operation accepting cash in exchange for not recording penalties on driving licences. He was sentenced to three years in jail for the offence of receiving a bribe, which was reduced to two years because he pleaded guilty at the rst opportunity. The SFO has promised to enforce the Bribery Act with vigour. On 12 March 2012, Richard Alderman, the former director of the SFO, said: We have been looking at a range of cases where it is suspected that Bribery Act offences have been committed. We are already using compulsory powers in a number of cases. The cases we are looking at are the biggest and most complex and so will take time to develop but it will not be long before we see Court activity. The impact of this will be very considerable. I am very optimistic about this. Enforcement activity under our Bribery Act will make a real difference. This message was reiterated by David Green, who took over from Richard Alderman as director of the SFO in April 2012. When taking up the appointment, Mr Green emphasised that the SFO would focus on large cases where UK companies were prevented from competing for big contracts on a level playing eld. Meanwhile, there are a number of ongoing cases being pursued under the UKs previous anti-corruption legislation. In October 2011, Richard Alderman stated that the SFO had about 50 ongoing investigations under pre-Bribery Act legislation. By way of example, on 8 September 2011, the SFO charged Bill Lowther, the former deputy chairman of Securency International Pty Limited, with violating pre-Bribery Act legislation by improperly securing a university place in the UK for the son of a Vietnamese state bank governor. The charges allege that the Vietnamese ofcial then awarded a contract to Securency. The case has involved a high degree of international co-operation between corruption prosecutors around the world. Before Lowthers arrest, co-ordinated raids took place in Australia, Spain and the UK. Australian authorities have brought charges against Securencys sister company and six of its former executives. Two additional alleged co-conspirators have been charged in Malaysia.
Recent charges have also been brought against individuals working for Innospec under pre-Bribery Act legislation for conspiracy to make corrupt payments to public ofcials in Indonesia and Iraq. The SFO has also recently secured two high prole civil recovery orders under the Proceeds of Crime Act 2002 (POCA). The rst was obtained against Macmillan Publishers Ltd in July 2011, requiring Macmillan to pay 11.2million, representing prots improperly won through payments to government ofcials in various African countries. The settlement provided for the appointment of an independent corporate monitor who will report to the SFO. In January 2012, the SFO obtained a civil recovery order under POCA, against the sole shareholder of Mabey& Johnson, for payment of a sum representing dividends it had received from contracts won through unlawful conduct. This followed its conviction in the UK in 2009 for a series of sanction breaches and corruption offences, relating to transactions in Jamaica, Ghana and Iraq. This type of enforcement action, the rst of its kind under the POCA, will likely have a signicant impact on institutional investors, in particular private equity funds, who take strategic shareholding stakes in companies for prot. It demonstrates the willingness of the SFO to target not only parent companies for unlawful conduct by their subsidiaries, but also institutional investors who have benetted from illegal activity. Richard Alderman, the then director of the SFO, said: There are two key messages I would like to highlight. First, shareholders who receive the proceeds of crime can expect civil action against them to recover the money. The SFO will pursue this approach vigorously The second, broader point is that shareholders and investors in companies are obliged to satisfy themselves with the business practices of the companies they invest inWhere issues arise, we will be much less sympathetic to institutional investors whose due diligence has clearly been lax in this respect.
Part 2: Recent anti-corruption developments in Asia

We make reference to the CPI scores for all countries, and the BPI scores for certain countries, proled in this section. The CPI Index is the Corruption Perceptions Index released by Transparency International. A countrys score on that index indicates the perceived level of public sector corruption on a scale of 0-10, where 0 means that a country is perceived as highly corrupt and 10 means that a country is perceived as very clean. The BPI Index is the Bribe Payers Index released by Transparency International. Countries are scored on a scale of 0-10, where a maximum score of 10 corresponds with a view that companies in that country never bribe abroad and 0 with a view that they always do. 28 leading economies are included in the BPI Index.
Bangladesh
Overview Corruption has long been identied as endemic in Bangladesh, and the country has been consistently ranked as one of the most corrupt in the region. In a recent survey on corruption in South Asia, published in December 2011, Transparency International reported that 66% of respondents in Bangladesh had paid a bribe to a public ofcial or service within the previous 12 months. In its June 2011 Budget Speech, the government, currently controlled by the Awami League, afrmed its commitment to combatting corruption and, in that vein, advancing legislative reform. However, the Awami League itself has been criticised for impeding corruption investigations and politicising the work of Bangladeshs principal anti-corruption agency, the Anti-Corruption Commission (ACC). In November 2011, Freedom House, an NGO, noted that the Awami League had moved to withdraw a large number of corruption cases led by the ACC against senior Awami League leadership. It is also notable that the ACC has recently led two graft cases against the leader of the opposition (and former Prime Minister), Khaleda Zia, who heads the Bangladesh Nationalist Party. Recent international corruption cases A multi-national insurance corporation In December 2011, a multi-national insurance corporation settled FCPA charges with the SEC, agreeing to pay approximately US$14.5 million in disgorgement and prejudgment interest. The SECs complaint alleged that the company made improper payments to, and provided improper benets for, foreign government ofcials in various countries, including Bangladesh, for the purpose of obtaining or retaining insurance business in those countries. The ofcials in question were either in a position to award business directly to the company or to inuence the award of business or otherwise provide favourable business treatment. The bribes were allegedly made in the form of (i) training, travel, and entertainment for employees of foreign government-owned clients, and (ii) payments to third-party facilitators. The SECs complaint alleged that the payments were not accurately reected in the companys books and records, and that the company failed to maintain an adequate internal control system reasonably designed to detect improper payments. Niko Resources Ltd In June 2011, Niko Resources, a Canadian gas exploration listed company, pleaded guilty to one count of violating Canadas Corruption of Foreign Public Ofcials Act (CFPOA) following a plea agreement with Canadian prosecution authorities. Niko was ned CAN$9.5 million and placed under a probation order, which provides for the court to supervise the companys compliance with the CFPOA for the next three years.
2011 CPI score
2.7
The indictment against Niko alleged that it had, through its Bangladeshi subsidiary, provided benets to the former Bangladeshi State Minister for Energy and Mineral Resources, AKM Mosharraf Hossain. The benets were in the form of a new Land Cruiser and the payment of travel and accommodation expenses for the former minister (including paying for side trips to visit his family). The former minister allegedly had a key role in deciding what compensation should be paid to villagers affected by a blast at a nearby Niko gas exploration site. The prosecution of Niko Resources is a benchmark in the enforcement of the CFPOA because it involved the rst plea agreement relating to foreign bribery and the rst probation order providing for court-supervised compliance audits. The proceedings against Niko were the product of a six-year investigation by the International Anti-Corruption Unit of the Royal Canadian Mounted Police (RCMP). The prosecution is of particular signicance to the energy and resources industries, many of which are headquartered in Calgary and have signicant investments and business in Asia. Padma Bridge project In September 2011, and again in April 2012, the RCMP executed search warrants at the ofces of a leading engineering and construction rm as part of an investigation into corruption in relation to the Padma Bridge project in Bangladesh. The Padma Bridge project is a US$2.9 billion project, funded partly by the World Bank, to construct a 6km-bridge over the Padma river near Dhaka. In October 2011, the World Bank suspended its funding of the project in response to the graft allegations. As at the date of this report, the RCMPs investigation is ongoing and funding from the World Bank is still being withheld. The World Bank has also temporarily barred the engineering rm from participating in World Bank funded projects. In February 2012, the ACC reported at a press brieng that it had found nothing to substantiate allegations of corruption in the process of selecting and appointing consultants and contractors in relation to the project. Its investigation is reportedly still ongoing. Recent domestic corruption cases AKM Mosharraf Hossain / Niko Resources In February 2012, the ACC reportedly led charges relating to the Niko case against AKM Mosharraf Hossain, the former minister, and Kashem Sharef, a former vice president of Nikos Bangladeshi subsidiary. The ACC reportedly assisted the RCMP in the investigation which led to Nikos prosecution. The case is a good example of recent increased cooperation between international enforcement authorities.
Recent developments in domestic anti-corruption legislation The Bangladeshi Parliament, the Jatiyo Sangshad, is in the course of considering an amendment to the Anti-Corruption Commission Act of 2004. The amendments as originally proposed by the Bangladeshi government have been much criticised. Particular criticism focused on the requirements that the ACC should obtain prior government approval before taking any action with respect to allegations of corruption against judges, magistrates or government ofcials, as well as various curbs on the ACCs powers of investigation, such as its powers to examine witnesses under oath. The requirement for prior government approval has reportedly been dropped from the latest draft of the amendment bill sent to the Jatiyo Sangshad in March following discussions between the Ministry of Law and the parliaments standing committee in February 2012.
Part 2:
Recent anti-corruption developments in Asia (continued)

Cambodia
Overview Despite all sectors of the Cambodian economy being open to foreign investment, the level of such investment in Cambodia is relatively modest. This is due in large part to concerns about endemic corruption in the country. Corruption is particularly acute in the public sector where pay for the large number of government workers is extremely low. The position is made worse by a lack of effective enforcement of anti-corruption laws by the judiciary and police. It appears, however, that some steps are being taken to combat corruption. Cambodia implemented its Anti-Corruption Law in 2010 and a number of high prole arrests have subsequently been made by Cambodias Anti-Corruption Unit (ACU). Recent domestic corruption cases The ACU has scored some successes in its ght against corruption. It played an instrumental role in the conviction of a former prosecutor in the Pursat provisional court for corruption, illegal detention, and extortion in May 2011. And in November 2011, the ACU successfully prosecuted the former head and former deputy head of a local police force for corruption offences. Domestic corruption, however, remains rife. Transparency International and Global Witness have recently issued reports exposing alleged corruption in the timber and sand dredging trades. The former estimated that US$50 is paid in bribes for every cubic metre of timber felled in Cambodia, while the latters 2010 report, Shifting Sand, detailed illegal sand dredging activities and exports to Singapore involving two prominent Cambodian senators. Global Witness has previously highlighted alleged corruption in the allocation of Cambodias natural resource licences. Recent developments in domestic anti-corruption legislation The Anti-Corruption Law was passed on 11 March 2010. While clearly a step forward in Cambodias ght against corruption, the law has been criticised in a number of respects. Some commentators believe, for example, that the legislation fails to adequately ensure the independence of the ACU from the executive arm of government. There are also concerns that the provisions are too uncertain. How the ACU and the courts will interpret the new law, and whether the ACU is given sufcient nancial support and resources to enable it to enforce the law effectively, remains to be seen.
2011 CPI score
2.1
Part 2:

China
Overview With the continuing economic problems in the US and Europe, many multinationals are increasingly focused on pursuing business opportunities in China. As a result, they are having to operate in a vastly different business environment to that of their home countries. In China, the value of personal relationships and the concept of guanxi are the focal points of business culture. Guanxi is best described as a personal connection between two people and is typically established by providing personal favours, such as gifts, entertainment or other benets. These business practices make it challenging for foreign rms operating in China to secure business in a manner consistent with Western anti-corruption laws. This has been highlighted by an increasing number of enforcement actions in the US involving China. Since 2002, the DOJ and SEC have brought enforcement actions against 22 corporations and 15 individuals relating to business activities in the country. At the same time, there have been recent extensions of Chinas domestic anti-bribery provisions as well as an uptick in domestic enforcement activity. There have been a number of high prole prosecutions in recent years including the case against the former head of Chinas food and drug watchdog, who was sentenced to death in 2007 for taking 6.49 million yuan in bribes in return for approving hundreds of medicines, some of which proved dangerous. In 2009, the mayor of Shenzhen was arrested and jailed along with many other public ofcials from the province of Guangdong. And in Chongqing, a recent anti-corruption drive led to mass arrests with more than 1,550 suspects being investigated, including forty police ofcers and the head of the judicial bureau. Bo Xilai, the former governor of Chongqing who orchestrated these efforts, is now himself subject to an investigation by the Communist Party. The recent increase in international and domestic enforcement activities means that it is all the more important for companies operating in China to ensure that their policies and controls are compliant with international and domestic legislation. Recent international corruption cases A global investment bank In April 2012, a former executive at a global investment bank pleaded guilty to DOJ charges of FCPA-related violations. The executive, who was head of the rms Shanghai real estate business, was alleged to have arranged for millions of dollars, disguised as nders fees, to be paid to himself and a Chinese ofcial. He was charged with conspiring to evade internal accounting controls that the rm was required to maintain under the FCPA and is due to be sentenced in July 2012. The executive also settled charges brought by the SEC by agreeing to pay approximately US$250,000 in disgorgement and to forfeit Shanghai real estate worth approximately US$3.4 million. Signicantly, neither the SEC nor the DOJ opted to charge the investment bank in relation to this matter. In its press release the SEC noted that the rm had cooperated with its inquiry and conducted a thorough internal investigation to determine the scope of the improper payments and other misconduct involved. The SEC and DOJ complaints also note the comprehensive internal controls the rm had in place at the time. These included numerous anti-corruption training programs for employees. The employee in question had himself received anti-corruption training on at least 7 occasions between 2002 and 2008 in both live and web-based sessions. Biomet Inc On 26 March 2012, Biomet Inc. settled FCPA charges brought by the DOJ and SEC, agreeing to pay a criminal ne of US$17.3 million and disgorge US$5.5 million in prots and pre-judgment interest. Biomet was alleged to have paid more than US$1.5 million in bribes, disguised as commissions, royalties, consulting fees, and scientic incentives, to
2011 BPI score 2011 CPI score
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doctors at government hospitals in China. The enforcement action is part of the governments industry-wide investigation into alleged bribes paid by orthopaedic device makers to doctors and administrators employed by state-controlledhospitals. Dun & Bradstreet Corporation On 18 March 2012, Dun & Bradstreet Corporation (D&B) announced that it had suspended operations of one of its Chinese subsidiaries, Shanghai Roadway D&B Marketing Services Co Ltd (Roadway) pending an investigation into whether the subsidiary violated the FCPA (and other laws). The announcement followed news that the Chinese police were investigating Roadway for breach of the local Chinese consumer data privacy laws. D&B is cooperating with local investigators and voluntarily reported the issues to the SEC and the DOJ. The investigation is ongoing. Watts Water Technologies, Inc In October 2011, Watts Water Technologies, Inc. (Watts) settled FCPA charges with the SEC. Watts agreed to pay US$2.7 million in disgorgement, US$820,000 in prejudgment interest, and US$200,000 in penalties without admitting or denying the SECs allegations. Watts designs and retails water valves. Between 2006 and 2009, it was alleged that Leesen Chang (Chang), a US citizen and the former Vice President of Sales for Watts whollyowned Chinese subsidiary, Watts Valve (Changsha) Co Ltd (Watts China), implemented a policy of approving payments of up to 3% of a salespersons commissions to employees of government-owned design institutes for creating design specications that favoured Watts China products or recommending Watts China products to its state-owned enterprise customers. Watts China also allegedly paid for meals, entertainment, and travel expenses incurred by employees of the design institute. These payments were alleged to have been improperly recorded as commission payments in the accounts of Watts China. Watts acquired the business that became Watts China in 2006. It implemented its FCPA compliance policy at Watts China shortly after the acquisition, but failed to conduct FCPA compliance training until 2009. Watts became aware of potential FCPA violations in the course of FCPA training in 2009 and self-reported the conduct to the SEC in August 2009. The SEC was of the view that Watts failed to implement a system of FCPA compliance and internal controls commensurate with the risks posed by Watts China. It did, however, commend Watts for taking prompt remedial action upon learning of the misconduct and for self-reporting to the SEC. As remedial measures, Watts abolished commission-based remuneration, conducted a global anti-corruption audit, and engaged external counsel to enhance its anti-corruption and compliance programme.
Part 2:

China (continued)
A multi-national technology rm In March 2011, a multi-national technology rm reached a settlement with the SEC in relation to alleged violations of FCPA provisions on books and records and internal controls in relation to its subsidiaries in China and South Korea. Without admitting or denying the allegations, the company agreed to pay a US$2 million civil penalty, disgorge US$5.3 million in prots, and pay US$2.7 million in prejudgment interest. The SECs allegations focused on gifts and tourism provided to foreign ofcials. In breach of their own internal policies, the company was alleged to have paid for at least 100 trips for Chinese government employees. The case highlights the difculties of reconciling Chinese business culture with the requirements of the FCPA and emphasises the importance of monitoring ongoing compliance with a companys internal control policies. Recent domestic corruption cases Chinese Football Association In February 2012, the Intermediate Peoples Courts of Tieling and Dandong (in the Liaoning province in northeast China) handed down verdicts and sentences to more than 35 individuals in relation a bribery and match-xing scandal in the Chinese national football league, including: (i) Yang Yimin, a former deputy-chief of the Chinese Football Association; (ii) Zhang Jianqiang, a former chairman of the CFA Referee Commission; and (iii) Lu Jun, a former World Cup referee once celebrated as the nations Golden Whistle, a title awarded by the CFA to the best referee of the season. While Yang was charged with accepting bribes as a government ofcial, Zhang and Lu were convicted as private individuals. Under Chinese law, a private individual can be convicted of bribery where he/she takes advantage of his/ her position and solicits or accepts money or property from another individual and in return confers benets sought by that person. Yang was sentenced to 10.5 years imprisonment and ordered to pay a ne of RMB200,000 (US$32,000) for taking bribes of RMB1.25 million (US$200,000). Zhang was sentenced to 12 years in prison and ordered to pay a ne of RMB 250,000 (US$40,000) for taking bribes of RMB2.73 million (US$433,000). Lu was sentenced to 5.5 years imprisonment for taking bribes of RMB820,000 (US$128,000). China Mobile Ltd In the summer of 2011, two members of the senior management of China Mobile Ltd. (China Mobile) received death sentences for accepting bribes. One of the executives, the former general manager of China Mobile Anhui, Shi Wanzhong (Shi), became the target of an investigation in China after US ofcials reportedly provided evidence through diplomatic channels to the Peoples Procuratorate that Shi had received bribes from Siemens AG (Siemens). The US discovered the information about Shi in the course of its extensive investigation into Siemens for FCPA violations between 2006 and 2008 that ultimately led to the largest FCPA settlement in history. Shi was sentenced to death with a two-year reprieve for taking US$5.06 million in bribes. Shi used a middleman, Tian Qu (Tian), to facilitate the payments. Tian himself was sentenced to 15 years imprisonment. The Shi conviction is of particular interest because it was the result of collaboration between US and Chinese authorities.
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The PRC Supreme Peoples Courts clarication on the elements of bribery On 21 December 2011, the PRC Supreme Peoples Court (SPC) sentenced a Nanjing city ofcial to death with two-year reprieve and another Nanjing city ofcial to life imprisonment for corruption. The city ofcials allegedly took advantage of their positions to sell the use rights of a parcel of state-owned land to a third party at a discount in exchange for a prot interest in an unrelated company. In its decision, the SPC set out a number of principles to be applied in future public corruption cases: A civil servant is guilty of an offence if he accepts benets from a party in the knowledge that the party is seeking a favour. The offence is committed whether or not the ofcial actively solicits the benets from the donor. The receipt by a public ofcial of a discounted purchase price for a house or other asset will constitute a bribe if received in return for performing a favour for the donor. It is not a defence to the offence of bribery to return an item of value to the donor after an investigation has been commenced. Recent developments in domestic anti-corruption legislation Extension of PRC Criminal Law to cover foreign bribery On 1 May 2011, China adopted the 8th Amendment to the PRC Criminal Law which extended its anti-bribery provisions to cover foreign government ofcials and ofcials of international public organisations. In doing so, China fullled the requirements of the United Nations Convention Against Corruption (UNCAC) and became one of the few countries in Asia Pacic to criminalise the bribery of foreign public ofcials. Article 164 of the Criminal Law previously only criminalised the giving of money or property to an employee of a company or enterprise for the purpose of seeking illegitimate benets in China. The amendment extended this offence to foreign public ofcials and created the rst transnational bribery offence under PRC law. The new offence is potentially broad in scope as it does not provide for statutory defences or exceptions. It is also vague in nature with some key terms left undened, such as the meaning of foreign ofcial. On 14 November 2011, the Supreme Peoples Procuratorate and the Ministry of Public Security provided some clarity in relation to the threshold amounts that may trigger an investigation and prosecution of an offence of foreign bribery: RMB10,000 (US$1,600) for individual bribe-payers and RMB200,000 (US$32,000) for companies that pay bribes. There is not yet, however, any publicly available information regarding any prosecutions under the new provision. The lack of clarity in the new regulation provides prosecutors with a broad discretion and the impact of the provision is likely to depend on the governments enforcement priorities over the next few years.
Trends in anti-corruption enforcement The levels of foreign direct investment in China together with its ongoing corruption problems are likely to result in a continued increase in international enforcement actions arising out of business conducted in the country. Enforcement on the domestic front also looks set to increase with the Peoples Supreme Procuratorate announcing in January 2012 that it would be intensifying its investigation of anti-bribery and corruption cases. China has been shoring up its domestic anti-corruption legislation over recent years and has recently set up a number of whistle-blowing hotlines which are reportedly used on a regular basis. Its anti-corruption efforts are key to ensuring that the country is able to continue to achieve its remarkable levels of growth and are likely to remain in the spotlight as the country transitions towards a new leadership later this year.
Part 2:

Hong Kong
Overview In many ways, Hong Kong is the model jurisdiction for anti-corruption reform. In the early 1970s, close connections between law enforcement agencies and organised crime syndicates meant that Hong Kong was generally regarded as one of the most corrupt cities in the world. Bribery and extortion were part of everyday life. All that began to change in February 1974 with the establishment of the Independent Commission Against Corruption (ICAC). Within three years, the ICAC had broken up several major corruption syndicates and had prosecuted 247 government ofcials, including 143 police ofcers. Today, nearly forty years on, the ICAC is one of the best known of all anti-corruption entities. It is also one of the best resourced, with a staff of over 1,300 and an annual budget of nearly US$100 million. The ICAC deals with approximately 3,000 complaints a year. About two-thirds of these reports concern private-sector corruption. The ICAC has adopted a three-pronged approach to tackling corruption: deterrence, prevention and education. Although these three prongs are considered to be equally important, the approach focuses mainly on enforcement, with a majority of the ICACs resources devoted to its Operations Department and in turn, the investigation of corruption complaints. The ICAC has proved very effective in tackling corruption. This is due not only to the strength and quality of its resources, but also the solid statutory framework within which it operates. It has signicant powers of investigation, including powers of arrest, detention, search and seizure, together with broad powers to obtain information (including from banks and tax authorities). The ICAC also has well-developed processes which enable the public to easily report any suspicious activities, and it maintains a high media prole to send out the message to the public that reporting of corruption leads to swift and effective action. As a result of the ongoing efforts of the ICAC, Hong Kong is now seen by many as one of the cleanest cities in the world. This perception has, however, been put under the spotlight in recent months by a number of very high prole corruption investigations involving senior politicians and businessmen, which are described below. Recent domestic corruption cases Donald Tsang Yam-kuen and Henry Tang In perhaps the highest prole investigation of the year, the ICAC is investigating whether Donald Tsang Yam-kuen, the Chief Executive of HKSAR, violated anti-bribery laws by accepting free holidays and apartments from local business tycoons. The investigation created a scandal on the eve of elections for a new Chief Executive of HKSAR. The election was also blighted by allegations of corruption and abuse of power by Henry Tang, an unsuccessful candidate for the Chief Executiveship. Both matters are yet to be resolved. Raymond and Thomas Kwok In March 2012, the ICAC arrested Raymond and Thomas Kwok, co-chairmen and controlling shareholders of Sun Hung Kai Properties, a listed property development company, on suspicion of corruption. The brothers are part of one of the richest families in Hong Kong and are reported to be jointly worth in excess of US$18 billion. Sun Hung Kai owns some of Hong Kongs largest properties including the iconic International Commerce Centre. At the same time, Rafael Hui, the former Chief Secretary for Administration in the Hong Kong government and an advisor to Sun Hung Kai, was also arrested. The brothers have publicly denied any wrongdoing and no charges have yet been brought. The investigation is reportedly the largest in the ICACs history and has captured media attention across the world.
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There has been an increasing concern in Hong Kong about the ties between government and big business. The recent investigations are seen by many as a rst move to rein in the perceived powers of the elite wealthy Hong Kong families. TVB General Manager, Stephen Chan In June and July of 2011, Stephen Chan, the General Manager of TVB, along with two others, was tried on various private-sector bribery charges. Chan was alleged to have, among other things, wrongfully concealed a HK$112,000 payment that he received from a major shopping arcade for hosting a talk show program for a 2009 Chinese New Year countdown event on TVB, one of Hong Kongs largest television broadcasters. The district court dismissed all charges against Mr. Chan and his fellow defendants on the grounds that Chan was paid to host the gala as a celebrity and that he did not receive payments in his capacity as an agent of TVB. The decision is under appeal.
Trends in anti-corruption enforcement Hong Kong is classied as low risk for corruption according to the Transparency International Corruption Perceptions Index. However, recent scandals involving the ofce of the Chief Executive and other high prole businesses have clouded that reputation. Given the high priority of protecting Hong Kongs reputation as a business centre of high integrity, we are likely to see the ICAC continue to investigate and prosecute corruption aggressively.
Part 2:

India
Overview Concerns about corruption in India have assumed prime importance in both legislative and public debate. This has been driven by a series of revelations of large-scale corruption in the public sector. One of the most recent revelations stems from a leaked draft report of the Comptroller and Auditor Generals ofce in late March 2012, which claimed that the Indian government had lost US$210 billion in potential revenues by selling 155 coal-elds without competitive bidding. Previous scandals have arisen in relation to the organisation of the 2010 Commonwealth Games and the allocation of 2G spectrum licences, the latter of which is reported to have caused a loss of US$39 billion to the Indian exchequer. A recent Transparency International report on corruption trends in South Asia, published in December 2011, conrms the prevalence of corruption in India. 54% of Indians surveyed said that they had paid a bribe to a public ofcial or public service within the previous 12 months. Moreover, over 75% of Indians surveyed said that they thought levels of corruption had increased in the last three years. 2012 is potentially a landmark year in Indias efforts to ght corruption. The news of corruption sparked a widelyreported anti-corruption protest movement in 2011, led by Anna Hazare and the India Against Corruption campaign, and intensive lobbying for new anti-corruption legislation. In his Budget Speech on 16 March 2012, the Finance Minister, Pranab Mukherjee, identied the need to expedite coordinated implementation of decisions being taken to improve delivery systems, governance and transparency; and address the problem of black money and corruption in public life as one of the Central Governments ve key objectives for the year. One of the concerns underlying this increased political attention on corruption is an apprehension that corruption threatens Indias economic progress. A study, published by the London School of Economics in March 2012, cited corruption as one of the potential impediments to India becoming a superpower. On the enforcement front, the Central Bureau of Investigation (CBI), the main domestic anti-corruption agency, retains a very active caseload. During 2011, it registered over 1,000 new cases and concluded nearly 900 cases, achieving a conviction rate of 67%. In March 2012, the CBI arrested one of its own counsel on bribery allegations in connection with one of the the CBIs ongoing enquiries. Recent international corruption cases A UK-based drinks company In July 2011, a UK-based drinks conglomerate settled administrative proceedings brought by the SEC alleging various FCPA violations. As part of the settlement, the company consented to an order to cease and desist from violating the FCPAs books and records and internal controls requirements, and to pay over US$16 million in nes and civil penalties. Among other things, the SEC alleged that over a six year period, the company illicitly made US$1.7 million worth of direct and indirect payments to hundreds of Indian government ofcials who were responsible for purchasing or authorising the sale of the companys beverages in the country. The company earned more than US$11 million in prots as a result of increased sales resulting from these payments. The payments included disbursements made through third-party distributors to employees of government-owned liquor stores in order to increase sales of the companys products and secure favourable store placements. The SEC alleged that the company failed to properly record the illicit payments made to government ofcials by describing them using innocuous terms such as promotion or special incentive payments.
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Ongoing foreign investigations In May 2010, the International AntiCorruption Unit of the Royal Canadian Mounted Police charged a Canadian businessman, Nazir Karigar, with bribing an Indian public ofcial in breach of Canadas Corruption of Foreign Public Ofcials Act. According to press reports, Mr Karigar, an employee of a now-bankrupt Canadian biometrics rm, Cryptometrics, is alleged to have indirectly paid bribes of roughly US$250,000 to Praful Patel, the Indian Minister of Heavy Industries and former Minister for Aviation. The bribes were made in connection with an ultimately failed bid by Cryptometrics for a US$100 million contract with Air India for a facial-recognition security system. Mr Karigar is the rst individual to be charged with an offence under Canadas foreign antibribery legislation. He will reportedly stand trial in September 2012. In May 2011, the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Oekokrim) charged two senior ofcers of the worlds largest fertiliser companies with a corruption offence under the Norwegian penal code. The offence concerns the alleged payment of a US$1 million bribe related to the companys ultimately unsuccessful efforts to establish a joint venture in India for the production and sale of fertiliser. The company uncovered the alleged offence while conducting an internal investigation with the aid of external counsel regarding possible offences in Libya and reported the matter to Oekokrim. The investigation is ongoing. In May 2012, Oekokrim reportedly detained two employees of the fertiliser company for questioning. In October 2011, the SEC opened a formal investigation into various potential FCPA breaches previously disclosed to it by Avon Products. Avon began an internal investigation in 2008, which reportedly uncovered questionable payments in various jurisdictions, including India. This matter is also still under investigation. Recent domestic corruption cases Blacklisting of international and domestic defence contractors Defence procurement is attracting special attention from anti-corruption investigators in India. India has a burgeoning defence procurement program which is one of the largest in the world. The total defence budget for 2012-13, announced to Parliament in March 2012, is close to US$41 billion, rising from US$36 billion in the previous year. In March 2012, the Ministry of Defence (MoD) decided to debar six rms from further business dealings with the Ordnance Factory Board (OFB), Indias military procurement body, for a period of ten years. The blacklisting arose out of an ongoing investigation into allegations that the former Director General of Ordnance Factories and others demanded and obtained kickbacks from both domestic and foreign suppliers in connection with various defence procurement contracts.
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India (continued)
The same Director General was reportedly charged with corruption offences in 2010. According to the MoD, the blacklisted rms were issued with a notice to show cause as to why action should not be taken against them, and were subsequently recommended for blacklisting by the CBI. The international contractors have disputed the blacklisting and the allegations of corruption. In another case, an Army general, General VK Singh, publicly alleged that he was offered a bribe of around US$2.7million by a retired lieutenant general to approve the supply of 600 vehicles to the Army. The CBI is reportedly investigating these claims. Aircel takeover and 2G scam The CBI is conducting an ongoing investigation into the takeover of Indian mobile operator, Aircel, by a Malaysian mobile telecommunications rm. In October 2011, the CBI led charges against three companies and a number of individuals, including former Telecommunications Minister, Dayanidhi Maran and his brother Kalanidhi Maran. The CBI has alleged that the former Telecommunications Minister was involved in pressuring Aircel to accede to the takeover in 2006 and, as part of that, delayed the award of 2G licences to Aircel until after its takeover. The CBI has, in addition, alleged that the former minister received a kickback. The Enforcement Directorate is also investigating the transactions and reportedly summoned the Maran brothers for questioning in March 2012. The investigation forms part of the CBIs wider investigation into the so-called 2G scam concerning the allocation of 2G spectrum licences during the tenure of Mr Marans successor as Telecommunications Minister, Mr A Raja. MrRaja is one of a number of defendants currently facing trial before a specially-constituted court on corruption-related charges for their role in the allocation of 2G licences. In February 2012, the Indian Supreme Court quashed over 100 2G licences granted while Mr Raja held ofce. Recent developments in domestic anti-corruption legislation In her speech to a Joint Session of the Parliament on 12 March 2012, President Pratibha Patil noted that a number of legislative proposals before the Parliament together had the potential of bringing about a transformational change in curbing corruption and enhancing transparency and accountability in governance. There are a number of pieces of proposed anti-corruption related legislation currently under consideration by the Indian Parliament. The best known of these is the Lokpal and Lokayuktas Bill. This Lokpal Bill was passed in December 2011 by the lower house of Parliament, the Lok Sabha, in the face of tremendous public interest and pressure. The bill, however, awaits the consideration and approval of the upper house of Parliament, the Rajya Sabha. The fate and nal shape of the Lokpal Bill remain uncertain. In its current form, the bill proposes to create a new independent ombudsman body, the Lokpal, with powers to investigate and prosecute complaints of corruption against, amongst others, politicians, senior public ofcials, and ofcers of state-funded or state-controlled companies. The Lokpal would have powers to search and seize documents and attach assets. Furthermore, the Lokpal would be able to exercise some of the powers of a civil court when conducting preliminary enquiries, such as the power to summon witnesses and take afdavits.
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The relationship of Lokpal to existing anti-corruption agencies, such as the CBI and the Central Vigilance Commission (CVC), has yet to be dened. In March 2012, the Prime Minister reportedly convened a meeting of leaders of different political parties with a view to forming a consensus on legislation that could be put before the Rajya Sabha, where it is currently being reviewed in committee. In December 2011, the Lok Sabha also passed the Whistleblowers Protection Bill. The purpose of this whistleblower legislation is to confer various protections on persons making public interest disclosures, including allegations of corruption and misuse of public ofce, to relevant authorities, such as the CVC. The bill provides that the identity of complainants should be kept condential, the complainant should be protected from victimisation, and that the complainant shall not incur liability under the Ofcial Secrets Act. The bill also prescribes rules and powers regarding the handling of complaints, including powers of investigation. The bill awaits approval of the Rajya Sabha, the upper house of Parliament. In addition to the Lokpal Bill and whistleblowers legislation, during 2011, the Lok Sabha also considered legislation to make the bribery of foreign public ofcials a criminal offence in India. The Prevention of Bribery of Foreign Public Ofcials and Ofcials of Public International Organisations Bill was introduced into the Lok Sabha in March 2011. The bill would apply to Indian citizens wherever located and is currently under consideration by a parliamentary committee. At a meeting of the committee in January 2012, the CBI reportedly expressed its opposition to the introduction of separate legislation prohibiting foreign bribery. Instead, the CBI recommended that existing domestic legislation be amended to extend to foreign bribery so that there is one consistent anti-bribery regime. Finally, the Ministry of Law is currently conducting a consultation exercise on proposed legislation to criminalise private sector corruption. In March 2012, the Ministry announced that it had received comments from all of the state governments on the proposal, one of which had expressed disagreement with the proposal. No legislative proposal has yet been presented to Parliament.
Part 2:

Indonesia
Overview Indonesia is the fourth largest country in the world (by population), one of the largest national economies, and the dominant market in Southeast Asia with a workforce of over 125 million people. Foreign direct investment in Indonesia increased over 40% in 2011. American businesses have been looking closely at the region since President Obama of the US and President Yudyohono of Indonesia signed a cooperation agreement to improve economic ties in November 2011. Japanese companies have also been actively investing in recent times. However, Indonesia still has major issues with graft. While there have been improvements over the past few years, obtaining licenses and doing business in Indonesia often means encountering demands for facilitation payments and other bribes. During a recent speech on International Anti-Corruption Day, President Suslio Bambang Yudhoyono said that the government would engage more with anti-corruption activists to combat corruption in Indonesia. The President claimed that there had been a steadily improving record in ghting corruption in Indonesia since 2004, when he issued instructions to accelerate the eradication of corruption. He claimed that since 2005, the National Police has handled 1,961 corruption cases, saving the country more than 965 billion rupiah. It is generally accepted, however, that there is still a long way to go in Indonesias ght against graft. Recent international corruption cases Alliance One International Inc In August 2010, Alliance One International Inc (Alliance One), a leading dealer in tobacco, agreed to pay a total of US$9.45 million in criminal nes and to disgorge US$10 million in prots to resolve civil and criminal charges brought by the SEC and DOJ. According to the complaint led by the SEC, these penalties resulted from a failure to implement sufcient internal controls. The complaint went on to allege that between 2000 and 2004, Dimon Inc. and Standard Commercial, the predecessor entities to Alliance One, as well as a number of their subsidiaries, paid bribes of more than US$1.2 million to government ofcials in South East Asia. These bribes included a US$44,000 cash payment to an Indonesian tax ofcial in exchange for a tax refund. Innospec Inc In March 2010, Innospec Inc agreed to disgorge US$11.2 million in prots and pay a criminal ne of US$14.1 million to settle charges brought by the DOJ. Innospec is a manufacturer and distributer of fuel additives and other specialty chemicals. From 2000 to 2007, the company allegedly paid multiple bribes in order to sell Tetra Ethyl Lead, a fuel additive, to government owned reneries and oil companies in Iraq and Indonesia. Innospec was also subject to a civil action brought by the SEC. The SECs complaint alleged that Innospecs management was not only aware of the bribery in Indonesia, but also authorised and encouraged it. In addition, the SEC criticised Innospecs internal controls for failing to detect and prevent the illegal conduct. More recently, on 11 June 2012, Paul Jennings, a former CEO of Innospec pleaded guilty to charges in the UK of conspiracy to make corrupt payments to public agencies in Indonesia and Iraq. Other former ofcers were charged but pleaded not guilty. The case is a good example of recent enhanced cooperation between enforcement authorities in the US and UK.
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Recent domestic corruption cases Nunun Nurbaeti In February 2012, the Jakarta Corruption Court indicted Nunun Nurbaeti for her 2004 participation as a go-between in a vote-buying scheme. Nurbaeti is the wife of former deputy police chief Adang Dorodjatun. In May 2012, the court found Nunan guilty of bribery charges and sentenced her to more than 2.5 years in prison. The vote-buying case was rst investigated in 2009 when Agus Condro Prayitno, a lawmaker in the House of Representatives, revealed that he and many others in the House of Representatives had accepted travellers cheques to vote for Miranda Swaray Goeltom to be central bank senior deputygovernor. Muhammad Nazaruddin Muhammad Nazaruddin, a former treasurer of President Susilo Bambang Yudhoyonos Democrat Party, ed Indonesia in May 2011 after bribery allegations were made against him. He was arrested in Colombia in August 2011. He has been accused of bribery in relation to the construction of an athletes village in the city of Palembang for the Southeast Asia Games in 2011. In turn, while in exile, he has accused many other members of the Democrat Party, including the party chairman, Anas Urbaningrum, of corruption. The investigation is ongoing. Rail procurement case In November 2011, a former Indonesian Director-General of railways was sentenced to three years imprisonment and ned US$11,000 for overcharging the Indonesian government US$2.26 million by failing to put a contract for the purchase of railway cars to an open tender. The court found the former Director-General had beneted by agreeing to a contract with a Japanese company. In 2010, the Indonesian press reported that the Corruption Eradication Commission (KPK) had raided the Jakarta ofce of the Japanese company. In November 2011, the Japanese press reported that Japanese police were cooperating with Indonesian authorities in relation to the matter. Recent developments in domestic anti-corruption legislation In February 2012, Indonesia and Hong Kong ratied their Agreement Concerning Mutual Legal Assistance in Criminal Matters. The agreement provides for a wide range of measures of mutual assistance for investigating and prosecuting criminal cases. Specically, these measures include mutual assistance in serving documents, taking evidence, and executing requests for search and seizure.
Part 2:

Japan
Overview Between January and October 2011, Japan accounted for 34% of all foreign direct investment projects from the Asia Pacic region, making it the regions most prolic outward investor during this period. Analysts believe that the trend is likely to continue as a result of a desire to increase energy security following the Fukushima nuclear crisis, an aging and shrinking domestic market, and a concern to meet competition from China. In the light of this, it will be increasingly important for outward investing Japanese companies to be aware of both international and domestic anti-corruption regulations. Historically, Japan has been slow to investigate and prosecute foreign bribery cases. It has been criticised by the Organisation for Economic Co-operation and Development (OECD) on this account and urged to do more to comply with its obligations as a signatory of the OECD Convention on Combating the Bribery of Foreign Public Ofcials in International Business Transactions. According to the OECDs June 2010 report, Japan reported only eight enforcement actions concerning overseas bribery between 1999 and 2009. Notwithstanding this, Japan achieved a positive rating in Transparency Internationals 2011 Bribe Payers Index. Recent international corruption cases Recent FCPA investigation regarding bribery of Nigerian government ofcials In April 2011, a Japanese company was ordered to pay US$218.8 million to resolve charges relating to a joint venture established to conduct business in Nigeria. Each of the four companies in the joint venture was sanctioned by the DOJ in relation to the bribery of Nigerian government ofcials to obtain engineering, procurement and construction (EPC) contracts. In total, over US$1.7 billion in penalties and forfeiture orders have been levelled against the joint venture partners and other persons allegedly associated with the scheme. The joint venture in question was awarded four EPC contracts between 1995 and 2004 to build liquied natural gas facilities on Bonny Island, Nigeria. The contracts were valued at more than US$6 billion. In January this year, it was also announced that a Japanese trading house will pay a US$54.6 million criminal penalty for its role as agent to the joint venture and, pursuant to a two-year deferred prosecution agreement, accept a corporate compliance consultant for two years. The prosecution illustrates the broad reach of the FCPA. Even though the bribery was alleged to have occurred between a foreign company and a foreign ofcial, the DOJ was able to charge the foreign trading house on the basis that it aided and abetted a US domestic concern in violating theFCPA. Anti-trust violations and conspiracy to bribe government ofcials in Latin America In September 2011, the DOJ announced that a Tokyo-based company had pleaded guilty to anti-trust violations and conspiracy to bribe government ofcials, and would pay a criminal ne of US$28 million. The DOJ said that the bribery, which occurred between 1999 and 2007, involved the authorisation and approval of payments to employees of state-owned entities in Latin America, in order to obtain and retain business in respect of marine hoses. The company was also subject to a cease and desist order and surcharge payment order by the Japan Fair Trading Commission in 2008 in respect of the bid rigging activity.
8.6
8
Recent domestic corruption case In November 2011, a former managing director at a trading company specialising in defence products lost his nal appeal to the Supreme Court and was sentenced to one year and six months imprisonment with labour for bribing the former Deputy Minister of Defence, Takemasa Moriya. The Deputy Minister was given gifts including cash and golng weekends from 2005 to 2007 in return for favours relating to supplies for Japans SelfDefence Forces. The Deputy Minister received a sentence of two years and six months imprisonment with labour and nes of approximately JPY 12.5 million.
Part 2:

Macau
Overview Three years ago, Ao Man Long, the former secretary for transport and public works, was convicted and jailed for bribery on a massive scale. During his 15 year tenure, Ao reportedly amassed a vast fortune in bribes from companies seeking government contracts. Investigators found nearly 800 million patacas (US$100 million) when they raided Aos home and safety deposit boxes in 2006. Aos conviction was a seminal victory in Macaus ght against public sector corruption. Since then, Macaus anticorruption unit, the Comissariado contra a Corrupcao (CCAC), has made solid progress in ghting public sector corruption and has improved public perceptions of politicians and civil servants. In the meantime, Macau has achieved substantial economic growth, principally through development of the gaming industry. It is now the worlds largest gambling destination with gaming revenue increasing by 42% last year to a record 267.87 billion patacas (US$33.5 billion). The city has quickly become a target for foreign investment, especially from the large casino operators and hotel chains. This new economic success has, however, led to increased corruption concerns. There are a number of ongoing corruption investigations involving gaming operators in Macau and the SEC and DOJ are increasingly focused on corruption issues in the territory. The gambling industry seems set to become the focus of attention in Macaus ght against corruption. Recent international corruption cases Las Vegas Sands Corp In March 2011, Las Vegas Sands Corp (LVS) disclosed that it had received a subpoena from the SEC requesting documents relating to its compliance with the FCPA. LVS also disclosed that the DOJ was conducting a similar investigation. The company, which owns multi-billion dollar casino and hotel developments in Macau and Singapore, said that the investigations were probably triggered by a whistleblower, the former CEO of Sands China Ltd., who is suing LVS in a civil lawsuit in Nevada. The allegations in that suit, which have been denied by LVS, include that the company made a number of improper demands on him, including that he use improper leverage against senior government ofcials in Macau. The investigation is ongoing. Wynn Resorts Corruption allegations have also surfaced in the context of an increasingly bitter boardroom struggle at Wynn Resorts between US casino mogul Steve Wynn and Japanese investor Kazuo Okada. The dispute between Wynn Resorts and Okada (who was a 20% shareholder and non-executive director of Wynn Resorts) appears to have stemmed from Okadas push to develop new casino projects in the Philippines. Wynn Resorts opposed these projects on the basis that they would compete with the companys Macau operations. In January 2012, Okada led a lawsuit in Nevada seeking to compel Wynn Resorts to produce information relating to a US$135 million donation to the University of Macau. Okada described the donation as inappropriate and, in support of this, pointed to the fact that Wynn Resorts gaming concession is due to expire in June 2022, the last year of Wynn Resorts donation commitment. In February 2012, Wynn Resorts disclosed that it had received a letter from the SEC requesting that the company preserve information relating to the donation and stating that it intended to conduct an informal inquiry.
2011 CPI score
5.1
In response to the lawsuit, Wynn Resorts said Okada was the sole dissenting vote against the donation from the companys 16-member board. Wynn Resorts claimed that Okada objected to the length of time over which the donation would occur, not its propriety. In February 2012, Wynn removed Okada from the board following the commission of an internal report authored by a former director of the FBI. The report allegedly found prima facie evidence of FCPA violations relating to Okadas conduct in the Philippines (see Philippines section). Both the LVS and Wynn Resorts cases appear to be examples of parties using FCPA complaints as weapons in boardroom disputes. It remains to be seen whether the allegations will result in any charges being brought by the SEC or DOJ. Companhia de Sistemas de Residuos Limitada In February 2012, the Hong Kong District Court sentenced two former directors of Companhia de Sistemas de Residuos Limitada (CSR), a waste services company in Macau, to 39 months imprisonment. The Court found Lionel John Krieger and James Tan Ping Cheong to have conspired to offer a bribe of MOP 29 million (approximately US$3.6 million) to Ao Man Long, in return for the award of three waste collection contracts with the Macau government. The pair were found guilty under a joint charge of conspiracy to offer advantages to an agent, in contravention of section 9(2)(a) of the Prevention of Bribery Ordinance and section 159A of the Crimes Ordinance. The case is of particular interest because the Hong Kong courts accepted jurisdiction over the case on the basis that the defendants discussed and agreed to pay the bribes while in Hong Kong. Hong Kong case law has previously established that bribes paid to foreign ofcials can constitute offenses under Hong Kong law. Given Hong Kongs proximity to Macau, the ICACs aggressive approach, and the ICACs strength of resources, we may well see more cases being brought in the Hong Kong courts arising out of corrupt business dealings in Macau.
Part 2:

Macau (continued)
Recent domestic corruption cases Joseph Lau and Steven Lo In May 2012, the Macau court ruled that two Hong Kong businessmen, Joseph Lau, the chairman of Chinese Estates Holdings, and Steven Lo, chairman of BMA Investment, are to face prosecution on bribery and money laundering charges in relation to land purchases approved by Ao Man Long. The two accused are alleged to have offered HK$20 million to Ao in 2005 in connection with their bid for ve plots of land opposite Macau airport on which a luxury development is being built. Both Lau and Lo have denied the allegations. The case is expected to come before Macaus Court of First Instance before the end of the year. Macau Customs Services In March 2012, 12 customs ofcers and two employees of a freight transportation company were acquitted of bribery charges. The bribery charges arose from events occuring during the Chinese New Year in 2006 when the customs ofcers in Macau International Airport allegedly asked the freight company to give hong bao (red envelopes) to the 36 customs ofcers stationed there. The CCAC searched the customs station and found dozens of red envelopes bearing the chop of the freight company, each containing MOP 500 (approximately US$60). However, the lower court found no evidence that the customs ofcers provided any benets to the freight company in return for the money. Nor was there evidence identifying the ofcial who allegedly solicited the bribe. As a result, all 14 individuals were acquitted. Despite the acquittals, the Court opined in its ruling that it is wrong for civil servants to receive red envelopes and those who received them should face disciplinary action. Recent developments in domestic anti-corruption legislation On 1 March 2010, in order to full the requirements of the United Nations Convention Against Corruption (UNCAC), Macau extended the CCACs anti-corruption jurisdiction to cover private sector bribery through the enactment of the Law of Prevention and Suppression of Bribery in the Private Sector. The law criminalises both passive and active bribery in the private sector. In the case of passive bribery violations, the law carries a maximum penalty of two years imprisonment or a ne for those found guilty of inducing unfair competition, and three years imprisonment or a ne if the acts committed could harm the health or safety of third parties. Interestingly, the maximum terms of imprisonment are lower for active bribery violations, being one year and two year maximum terms respectively.
2011 CPI score
5.1
Part 2:

Malaysia
Overview Malaysia has sustained strong economic growth over recent years through market diversication policies and has attracted signicant levels of foreign direct investment, particularly in the industrial, service and high-tech sectors. Corruption in the public and private sectors remains a signicant challenge for companies doing business in Malaysia. Despite the implementation of various initiatives designed to reduce corruption such as the establishment of a government e-procurement system and a corruption hotline, the latest Transparency International survey notes that Malaysia has slipped nearly 30 places over the past decade. Recent international corruption cases An international telecommunications rm In 2010, an international telecommunications rm settled DOJ and SEC enforcement actions relating to alleged violations of both the anti-bribery and books and records provisions of the FCPA. The DOJ alleged that between 2004 and 2006, a Malaysian joint venture, in which the company owned a majority share, made improper payments to the entity responsible for awarding telecommunications contracts. The improper payments were alleged to have been made in exchange for non-public information relating to ongoing public tenders, some of which the joint venture ultimately won. Separately, the SEC complaint alleged that between October 2004 and February 2006, the companys agents and/or subsidiaries paid bribes to Malaysian government ofcials to obtain or retain a telecommunications contract valued at approximately US$85 million. The SEC further claimed that such payments were improperly recorded as consulting fees in the books of the companys subsidiaries and then consolidated into the companys nancial statements. The DOJ enforcement action was resolved through a plea agreement and deferred prosecution agreement whereby the company agreed to pay a criminal ne of US$92 million. The SEC civil complaint was settled by a disgorgement payment of US$45.4 million. Recent domestic corruption cases A French power rm In December 2011, the Malaysian Anti-Corruption Commission (MACC) announced that it had commenced an investigation into allegations that a French power rm paid kickbacks to a former Malaysian ofcial relating to a power project in the 1990s. Malaysian media reports note that the investigation appears to have stemmed from actions taken by the Swiss Attorney Generals ofce in November 2011, ordering the power company to pay 31 million euros in nes as a result of allegations that it offered bribes and kickbacks in Malaysia, Latvia, and Tunisia. The company has reportedly agreed to co-operate with the MACC. Zaki Othman In April 2012, Md Zaki Othman, a former senior general manager of a Malaysia-based multinational conglomerate, was sentenced to 27 years in jail and ned approximately US$280,000 on ve counts of corruption. Specically, he was found to have violated Malaysias private-sector anti-corruption laws by accepting over US$55,000 in bribes in the form of luxury watches and furniture. These bribes were alleged to have been paid in order to expedite payments and issue letters of intent to contractors in relation to engineering projects.
7.6
4.3
Recent developments in domestic anti-corruption legislation Whistle-blower protection Malaysias Whistleblower Protection Act came into force in December 2010. The Act provides whistleblowers with condentiality protections as well as immunity from civil or criminal action. It also gives whistleblowers rights if any retaliatory action is taken against them. This was an encouraging development in Malaysias anti-corruption landscape. However, one of the main criticisms of the legislation is that it only gives protection to informants who provide condential information to the government. If the information is disclosed to a third party, the protection is withdrawn immediately. The stated rationale for this provision is to protect an accused person if a report is proven false and to avoid prejudicing the integrity of an investigation. Notwithstanding this potential limitation, it has been reported that more than 6,000 reports of improper conduct have been made since the introduction of the legislation.
Part 2:

Mongolia
Overview In recent years, foreign direct investment in Mongolia has surged, particularly in the energy and natural resources sector, rising from approximately US$2 million in 1992 to over US$1.4 billion in 2010. At the same time, Mongolia has undertaken widespread economic reform to privatise government enterprises. Corruption is, however, pervasive in Mongolia and represents a key threat to its economic growth. In Transparency Internationals latest Corruption Perceptions Index, the country scored very poorly and was ranked alongside Tanzania, Mozambique, Guyana and Ethiopia. Many attribute Mongolias problems in this area to the countrys rapid transition to democracy and market economy which have placed huge demands on a regime that lacks the resources, checks and balances to prevent corruption. That said, Mongolias Independent Authority against Corruption (the IAAC) has begun to increase its public prole in recent years. Established in 2006, it now has approximately 90 staff members and an annual budget of nearly US$1.65 million. It has recently undertaken a number of high prole investigations and is currently prosecuting former President Nambaryn Enkbayar in a case which is being watched closely around the world. Recent international corruption cases UTStarcom, Inc No multinational has been charged with violations of the FCPA for operations in Mongolia since 2009. The most recent case concerned UTStarcom, a NASDAQ-listed, Fortune 1000 company that provides interactive protocol-based network products for telecommunications corporations. On 31 December 2009, UTStarcom settled FCPA charges with US authorities, agreeing to pay a criminal ne of US$1.5 million to the SEC and an additional US$1.5million to the DOJ. According to the charges, between 2002 and 2007, UTStarcom made payments to sham consultants in Mongolia knowing that they would pay bribes to foreign government ofcials on UTStarcoms behalf. The unlawful payments took the form of a US$1.5 million licensing fee that in fact, had a fair market value of only US$50,000. The DOJ became aware of the conduct after it was notied of the allegations by the US Embassy in Mongolia in 2005. Recent domestic corruption cases Ex-President arrested on graft charges In April 2012, Nambaryn Enkbayar, the President of Mongolia from 2005 until 2009, was arrested on corruption charges. The timing of the arrest, which came shortly after Enkbayar released classied transcripts of a national security council meeting that supposedly shed light on corruption in connection with the countrys 2008 elections, has engendered speculation abroad that the arrest was politically motivated. Enkbayar, who has subsequently been charged by the IAAC, claims that that the allegations have been made as a means to bar him from participating in the countrys June 2012 parliamentary elections. Although Enkbayars June trial date has been postponed, Mongolias General Election Commission voted to reject Enkbayars candidacy for the 28 June elections amid the pending corruption charges.
2011 CPI score
2.7
Investigation into the conduct of government ofcials On 22 March 2012, a member of the Mongolian Parliament and the Head of the Democratic Union of Mongolia, submitted an application to the IAAC, requesting an investigation into the conduct of several government ofcials. In a potentially related matter, the former chairman of the Mongolian Mineral Resources Authority and an advisor to Prime Minister Batbold, was arrested in May 2012 on corruption charges relating to the issuance of mining permits. The investigation is ongoing. Recent developments in domestic anti-corruption legislation New conict of interest law On 19 January, 2012, Mongolias Parliament passed the Law on Preventing Conict of Interest in Public Service, which introduced restrictions on the private holdings of public ofcials. Under the regime, public ofcials are required to report all business holdings to the IAAC. The Law could have signicant consequences as many members of Parliament reportedly have extensive business holdings.
Part 2:

Myanmar
Overview Closed to the outside world for many years as a result of international economic sanctions, Myanmar has recently undergone a signicant progression. Most notably, reforms in Myanmar have been highlighted by the release and subsequent election of pro-democracy icon Aung San Suu Kyi. The resource-rich country is ripe for foreign investment with agriculture and extractive industries (including natural gas, mining, logging and shing) providing the major portion of national incomes. Many potential foreign investors, however, are being deterred by the endemic corruption in the country. According to Transparency Internationals Corruption Perceptions Index, Myanmar is currently the third most corrupt country in the world, after Somalia and North Korea. Myanmars anti-corruption efforts are in their infancy. There is currently no independent anti-corruption body and according to many sources, it has been common practice for the ruling generals to misuse anti-corruption laws as a means of ousting political opponents. In a recent interview, the Burmese Upper House Speaker said that ghting rampant corruption is the most important issue facing Myanmar today. The House Speaker went on to say that although the existing anti-corruption legislation is out-of-date, proposed amendments have already been approved by the Lower House and would be submitted to the Union Parliament during the next session. Recent international corruption cases Despite the signicant corruption risk, the limited foreign investment in Myanmar means that there have not been many international enforcement actions against companies operating in Myanmar. This may change as sanctions are lifted and foreign investment increases. A multi-national insurance corporation In December 2011, it was announced that a multinational insurance corporation had agreed to pay US$16.3 million in order to resolve DOJ and SEC criminal and civil probes relating to alleged improper payments in numerous countries, including Myanmar. In Myanmar, it was alleged that the company retained an introducer to assist with its dealings with two governmentowned entities. According to the allegation, the companys records indicated that the introducer had used a portion of its commission to improperly inuence a government ofcial on the companys behalf. Recent domestic corruption cases Six Burmese ministries accused of corruption A government audit report released in March 2012 to members of Myanmars Lower House of Parliament alleged rampant corruption in six key ministries under the former junta, all of which were led by prominent members of the current administration. The ndings alleged that ministries had misused billions of kyat in government funds engaging in a variety of illegal transactions. It remains to be seen what steps parliament or the police will take next in respect of the allegations.
2011 CPI score
1.5
Part 2:

Pakistan
Overview Corruption in Pakistan is recognised to be widespread and increasingly presents difcult political challenges for the country. In a recent survey on corruption in South Asia published in December 2011, Transparency International reported that nearly 80% of Pakistani respondents said that levels of corruption in the country had increased over the last three years. Around half of the Pakistani respondents in the same survey reported that they had themselves paid a bribe to a public ofcial or service within the last year. The Supreme Court has assumed an active prole in the ght against corruption and many of the most notable domestic cases have been argued before the Court. As noted below, the Court struck down as unconstitutional the National Reconciliation Ordinance (NRO) in a landmark decision in December 2009. However, the Court has found itself in direct conict with the Government on a number of occasions. Most recently, the Court and the Pakistani Government clashed in the contempt proceedings against the Prime Minister. Recent international corruption cases Cricket spot-xing case On 1 November 2011, following a jury trial at Southwark Crown Court in London, two players in the Pakistani national cricket team, including the former team captain, Salman Butt, were convicted of conspiring to accept unlawful payments and conspiring to cheat at gambling. The bribes were paid in exchange for bowling three no balls at prearranged times during a test match against England played at Lords Cricket Ground. The two men were sentenced to imprisonment along with two other conspirators, another cricketer of the Pakistan national team and a sports agent, Mazhar Majeed, who had earlier pleaded guilty to the offences. On 23 November 2011, the Court of Appeal dismissed an appeal against sentencing by two of the cricketers. Of note, the Court upheld the trial judges decision to impose custodial sentences on all participants in the conspiracy and the judges differentiation between the different conspirators when determining sentences. In particular, the Court upheld the imposition of a greater sentence on the team captain, as he was viewed as being key to the conspiracy and in a position to inuence his fellow cricketers. The prosecution, being a domestic bribery case, was conducted by the Crown Prosecution Service rather than the Serious Fraud Ofce (SFO), which is responsible for international bribery prosecutions. As such, it does not offer any direct insight into the SFOs strategy for prosecuting offences under the Bribery Act. However, the case does signal a preparedness on the part of the English courts to impose signicant custodial sentences for corruption offences. Recent domestic corruption cases The NRO judgments In December 2009, the Supreme Court declared the NRO to be unconstitutional and purported to strike it down. That law, adopted in 2007 by former President, Pervez Musharraf, had purported to grant an amnesty to politicians and bureaucrats (around 8,000 in all) who had been accused of a variety of serious crimes, including corruption, embezzlement and money laundering between January 1986 and October 1999. The law was reportedly promulgated by the former President as part of a political bargain to allow the head of the Pakistan Peoples Party, the late Benazir Bhutto, and the now-current President, Asif Ali Zardari, to return to Pakistan. The Court gave various directions seeking to revive investigations and prosecutions that had been terminated following the promulgation of the NRO, and to establish court supervision over those investigations and prosecutions. In November 2011, the Court dismissed a petition by the Government seeking to review its December 2009 judgment.
2011 CPI score
2.5
Contempt proceedings against Prime Minister Yousaf Raza Gilani In February 2012, the Supreme Court of Pakistan charged the Prime Minister, Yousaf Raza Gilani, with contempt of court. The alleged contempt consisted of his failure to adhere to an order made in the 2009 NRO judgment requiring the Government to request Swiss authorities to reopen an investigation regarding corruption and money laundering before the Swiss courts. In 2007, Swiss authorities were reportedly investigating allegations of corruption against the now-current president, President Zardari, having frozen around US$60 million in accounts in Switzerland. Following the enactment of the NRO, the Attorney-General wrote to the Swiss authorities to withdraw Pakistans request for assistance in investigating the corruption and money laundering allegations, and to terminate its status as a party to the pending civil proceedings in Switzerland. The Swiss authorities reportedly released the frozen funds following this request. In December 2009, as part of its NRO decision, the Supreme Court declared that the decision to withdraw the request for assistance from the Swiss authorities was invalid and required the Government to revive its request for assistance in Switzerland and its status as party to civil proceedings. As of January 2012, this had not occurred, prompting the Supreme Court to order that the Prime Minister show cause as to why contempt proceedings should not be initiated against him for failing to comply with the order in its 2009 judgment. The Prime Minister did not submit a reply. In April 2012 Gilani was convicted of contempt, but the court imposed only a symbolic custodial sentence, requiring Gilani to remain in court for the duration of the hearing. Cases regarding corruption at state-owned companies The Supreme Court is currently hearing a number of cases regarding alleged corruption and fraud in the management of various state-owned companies. In March 2012, the Court held its latest hearings into allegations of corruption at Pakistan Steel Mills (PSM), the state-owned steel producer. The Court had instigated the review of PSM of its own motion in 2009. According to a forensic audit report provided to the Court, PSM sustained losses of 26.5 billion rupees in 2008-9 alone, over 20 billion rupees of which was attributed to corrupt practices and mismanagement. The Court demanded that the Ministry of Industries explain what actions it has taken following the provision of the audit report, and reserved the matter for further judgment. In the same month, the Court also held hearings concerning allegations of corruption and mismanagement at state-owned railway operator, Pakistan Railways (PR). The National Accountability Bureau (NAB) has a number of ongoing cases concerning corruption at the railway company. The Court has at various times directed the NAB to investigate or complete its various investigations of the corruption allegations as a matter of priority. Recent developments in domestic anti-corruption legislation In March 2012, the Securities and Exchange Commission of Pakistan proposed new corporate governance rules for public sector companies. Amongst other matters, the new rules would provide that the majority of directors on the boards of public sector companies be independent and the chief executive ofcers be selected by the board rather than the Government as is currently the case. The proposed rules are seen as a step towards addressing perceived levels of nepotism and corruption in the management of public sector companies.
Part 2:

Philippines
Overview In 2010, the current President of the Philippines, Benigno Aquino, campaigned for election with the slogan, If theres no corruption, theres no proverty. Since taking ofce, the ght against corruption has remained a theme of the Presidents public addresses, most recently in a June 2012 speech marking the 114th anniversary of independence from Spain. Despite this, nearly two years into his presidency, his administration has proposed few reforms to the current anti-corruption enforcement regime and conducting business in the Philippines continues to present signicant corruption-related risks. Recent international corruption cases Wynn Resorts A boardroom dispute between the casino operator, Wynn Resorts, and one of its major shareholders and non-executive directors, Kazuo Okada, has led to allegations of bribery in the Philippines. The dispute allegedly stemmed from Okadas push to develop new casino projects in the Philippines. Wynn Resorts objected to this, claiming that these developments would compete with its Macau operations. Events led to Okada bringing proceedings against Wynn Resorts in Nevada claiming, among other things, that the company was unlawfully withholding information from him and seeking the production of information relating to a US$135 million donation to the University of Macau (see Macau section). In February 2012, Wynn Resorts removed Okada as a non-executive director following the commission of an internal report authored by a former director of the FBI. The report alleged that Mr Okada appeared to have engaged in a longstanding practice of making payments and gifts to two chief gaming regulators at the Philippines Amusement and Gaming Corporation who oversee and regulate his provisional licence agreement to operate in the Philippines. This case represents an example of FCPA charges being used as a weapon in boardroom disputes. Recent domestic corruption cases Former President facing corruption charges Former President Gloria Macapagal Arroyo and her husband face charges of corruption in relation to their involvement in a US$330 million broadband deal with a Chinese telecommunications company. News reports indicate that Arroyos husband was promised a US$60 million commission if the deal went through, and charging documents claim that the Arroyos exerted inuence over members of the government responsible for its approval. In April 2012, Arroyo and her husband pleaded not guilty before the anti-graft court, the Sandiganbayan. If convicted, they could each face ten years in prison.
2011 CPI score
2.6
8.3
9.2
Singapore
Overview Singapore has been highly successful in tackling corruption, consistently ranking as one of the worlds least corrupt jurisdictions in Transparency Internationals Corruption Perception Index. The Corrupt Practices Investigation Bureau (CPIB), which is the sole agency responsible for combatting corruption in Singapore, adopts a zero tolerance policy on corruption and has a very successful track record. As a result, major corruption cases involving Singapore are infrequent, although there have been a number of signicant cases in recent months. Recent international corruption cases The most notable recent international corruption case relating to Singapore involved four individuals convicted in the English courts on 25 January 2012 for conspiring to unlawfully obtain payments. The defendants, all British or Belgian nationals, offered to supply condential information to bidders in relation to ve separate tenders for high-value oil and gas engineering projects, including the Singapore Parallel Train Project. As the acts of conspiracy occurred in 2001-2009, the case was decided under the pre-Bribery Act 2010 regime. Recent domestic corruption cases Cases against public ofcials The past six months have seen two of the most signicant domestic cases of corruption involving public ofcials in many years. In November 2011, two senior employees of the Singapore Land Authority were jailed for misappropriating SG$1.2 million of public funds by making payments under ctitious contracts, the largest abuse of Singapore public funds since 1995. In separate proceedings, the CPIB brought corruption charges against the former heads of the Singapore Civil Defence Force and Central Narcotics Bureau. Each of the accused was charged with corruptly obtaining sexual gratication from female employees of vendors seeking to do business with their respective organisations. Pending the outcome of the ongoing investigations, the ofcials were removed from ofce in January 2012. These cases demonstrate the willingness of the CPIB to hold even the most senior ofcials accountable. Football match-xing cases The CPIB has recently brought a number of cases concerning the payment of bribes to x football matches in Singapore. In May 2012, a Singaporean national was charged with bribing a Malaysian referee (who was also subsequently charged) to x a Malaysian Super League match. During the same month, two former South Korean professional players were also sentenced on charges of paying bribes, but this time the bribes were made to players in exchange for throwing a game. Match-xing is a widespread problem in Southeast Asia and has been a target of CPIB investigations in the past.
Part 2:

South Korea
Overview The Act on Preventing Bribery of Foreign Ofcials in International Business Transactions (FBPA), enacted in 1999, made South Korea one of the rst jurisdictions in Asia to adopt a law prohibiting the bribery of foreign ofcials. The FBPA, however, has been used sparingly, leading to only nine convictions in thirteen years. The low number of convictions has raised concerns among international observers about the effectiveness of the FBPAs enforcement. The OECD has also expressed concern that most prison sentences imposed under the FBPA fall far below the statutory maximum. Violating the FBPA carries with it a maximum of ve years imprisonment, a ne of KRW20million (approximately US$20,000), or twice the prot earned where prots exceed KRW10 million (approximately US$10,000). However, at least half of the defendants sentenced to imprisonment have received suspended sentences. Recently, South Korea has passed sentencing guidelines that recommend harsher nes for bribery offences. The passage of this legislation may alleviate international concerns, but the record of enforcement in South Korea invites a cautious outlook. Recent international corruption cases A UK-based drinks company In July 2011, the SEC charged a UK-based drinks company was charged with multiple FCPA violations involving US$2.7 million of allegedly improper payments made over a period of over six years. The company consented to a cease-and-desist order, and agreed to pay over US$16 million in penalties, disgorgement and interest. Among other things, court lings alleged that the company paid KRW100 million (approximately US$86,000) to a South Korean customs ofcial as a reward for his role in the decision to grant the company US$50 million in tax rebates. The company was also alleged to have improperly paid travel and entertainment expenses to South Korean customs and government ofcials involved in these tax negotiations. Separately, the company allegedly made hundreds of gift payments to South Korean military ofcials on a routine basis in order to obtain and retain business. The SECs investigation found that the company and its subsidiaries failed to properly account for these illicit payments in their books and records. Instead, they concealed the payments to government ofcials by recording them as legitimate expenses for third party vendors or private customers. The SEC also found that the company lacked sufcient internal controls to detect and prevent the corrupt payments and improper accounting. A multi-national technology rm As discussed in the PRC section, on 18 March 2011, the SEC charged a multi-national technology rm with violating the books and records and internal control provisions under the FCPA. In settling the matter, the company agreed to disgorge prots of US$5.3 million, settle civil penalties of US$2 million, and pay an additional US$2.7 million in prejudgment interest. In addition to the conduct in the PRC, the company allegedly paid cash bribes and provided improper gifts and expenses payments to a number of government ofcials in South Korea in order to secure the sale of the companys products.
7.9
5.4
Recent domestic corruption case In May 2011, representatives of a South Korean logistics company and travel agency were indicted by the Incheon District Prosecutors Ofce for allegedly bribing the President of a Chinese airlines South Korean subsidiary in violation of the FBPA. In February 2012, the court acquitted the two accused ofcers of FBPA charges on the grounds that the prosecution had failed to prove that the president of the South Korean subsidiary qualied as a foreign public ofcial. However, the court found the defendants guilty of commercial bribery charges under the Korean Criminal Code. Recent developments in domestic anti-corruption legislation Whistleblower protection The Act on the Protection of Public Interest Whistleblowers (WPA) was enacted on 29March 2011 and came into force on 30 September 2011. The WPA covers both public and private-sector whistleblowers who report in good faith and on reasonable grounds public interest violations and also extends to those who report cases of foreign bribery. It provides various protections for whistleblowers, including condentiality safeguards, anti-retaliatory provisions and the payment of relief money and rewards to whistleblowers. New information and intelligence gathering capacity In May 2011, South Korea increased its information and intelligence gathering capacity to support investigations of international crime, including the bribery of foreign public ofcials. The measures include: (i) requiring regular updates by the Ministry of Justice to the Supreme Prosecutors Ofce on allegations in the international media; (ii) the establishment of a new special team within the Ofce of Criminal Intelligence Planning, Supreme Prosecutors Ofce, with a mandate to gather information on criminal enforcement; and (iii) a new focus on foreign information gathering at the International Criminal Affairs Division, Ministry of Justice, to support the active enforcement of the FBPA.
Part 2:

Sri Lanka
Overview Sri Lanka, like many of its South Asian neighbours, faces signicant problems of widespread corruption. While Transparency Internationals recent survey of public perception of corruption in South Asia might suggest that the levels of corruption in Sri Lanka may be lower than some of its South Asian peers (eg, 23% of Sri Lankans reported paying a bribe in the past 12 months versus 66% of Bangladeshis), it still scores poorly on corruption perceptions rankings. Recent developments Neither Sri Lankas anti-corruption agency, the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), nor any foreign agency has presented any signicant case against any international company concerning bribery or corruption in Sri Lanka recently. Indeed, prior to the appointment of the current panel of CIABOC commissioners in May 2011, the CIABOC was effectively defunct because its investigators were unable to initiate investigations against any person (foreign or local) without commissorial authority. Since May 2011, the reconstituted CIABOC has spent a signicant amount of time reviewing and clearing a reported backlog of around 3,000 complaints. Notably, between May 2011 and February 2012, the CIABOC arrested nearly 60 persons in connection with different anti-corruption investigations, which is higher than the annual total arrested in any previous year of its operation. In its National Integrity System Assessment report published in April 2011, Transparency International-Sri Lanka was sharply critical of the CIABOC, claiming that it had failed to prosecute complaints of large-scale corruption or any complaints against current or former politicians.
2011 CPI score
3.3
7.5
6.1
Taiwan
Overview Taiwan has made signicant progress in its ght against corruption over recent years. There is an increasing public perception that the current regime is serious about tackling the issue, based not only on its strong public statements, but also on a recent number of high prole prosecutions. These include the conviction and imprisonment of former President Chen Shui-bian on counts of bribery and embezzlement, and the indictment of the previous president, Lee Teng-hui, on corruption charges. Senior customs ofcials and judges have also been targeted. This progress was reinforced by the establishment of the Agency Against Corruption (AAC) in May last year. It opened with a staff of 180 ofcials drawn from the ethics departments of government agencies and the police and will focus on enforcement and education in the community. Recent international corruption cases A French defence company One of the highest prole corruption cases involving foreign parties in Taiwan made headlines again in 2011 as a French defence company, along with the Government of France, paid a multi-million dollar arbitral award following a dispute that spun out of an investigation into corruption in France and Taiwan. The dispute arose out of commission payments exceeding US$600 million allegedly paid in 1991 by the companys predecessor entity. These payments were purportedly made to a Taiwanese agent in relation to the sale of six French frigates to Taiwan at a cost of US$460million each. Suspicions about the deal arose after the body of the Head of Procurement for the Taiwanese navy was found dead off the Taiwanese coast in 1993. The Public Prosecution Service (France) initiated an investigation into the company for bribery, but dropped the case in 2008 due to lack of evidence. Nevertheless, Taiwan commenced proceedings with the ICC seeking damages on the basis that the company breached the prohibition on the payment of commissions in the frigates purchase contract. On 3 May 2010, the Tribunal ordered the company to pay approximately US$591 million in damages (including interest and legal expenses) to the Taiwanese government. In June 2011, the Paris Court of Appeals afrmed the award, and ordered the company to pay US$913 million. The company did not appeal the ruling and paid the award (with the French government contributing 72.5% pursuant to a guarantee in July 2011). The Government of Taiwan announced on 12 October 2011 that it was seeking additional compensation from France. Defence Minister Kao Hua-chu said that the Navy has led a legal suit against France, claiming NT$3 billion (US$98.84 million) in compensation and interest for an alleged violation of a separate supply contract.
Part 2:

Taiwan (continued)
A global telecommunications company A global telecommunications company resolved FCPA violations by agreeing to pay US$137 million to the SEC and DOJ for violations in Taiwan, Honduras, Costa Rica and Malaysia (see Malaysia section). In Taiwan, the company allegedly hired two consultants to funnel nearly US$1 million to members of the Taiwanese legislature in order to inuence the award of a tender by the Taiwan Railway Administration. Recent domestic corruption cases Chen Shui-bian (ex-President of Taiwan) The most high prole bribery conviction in recent years was that of Chen Shui-bian, the ex-President of Taiwan, who was sentenced to life in prison in September 2009 after a Taiwanese court convicted him on graft charges. He resigned from Taiwans Democratic Progressive Party in August 2008 after admitting that his wife Wu Shu-chen had wired US$21 million in campaign funds to accounts in Singapore, the Cayman Islands and Switzerland. Mr Chen was charged with embezzling US$3.15 million during his 2000-2008 presidency from a special presidential fund, receiving bribes worth at least US$9 million in connection with a government land deal, laundering the proceeds of graft through Swiss bank accounts, and forging documents to cover up his crimes. Mr Chens wife was also sentenced to life in prison on related graft offences. Both were ned a total of US$15 million. Chen Jung-ho, Lee Chun-ti and Tsai Kuang-chih (three high-court judges) Three high-court judges (Chen Jung-ho, Lee Chun-ti and Tsai Kuang-chih) received prison sentences of between 11and 20 years in July 2011 for accepting bribes to x the outcome of a high-prole case involving Mr Ho Chih-hui. According to Taipei District Court documents, in May 2010, Mr Hos agent paid the judges for a not-guilty verdict on charges of taking kickbacks over the building of a science park. This high prole scandal played a role in President Ma Ying-jeous recent decision to set up the AAC.
2011 CPI score
3.4
Thailand
Overview Corruption, both in the private and public sectors, has long been a frustration for companies doing business in Thailand. However, international and Thai enforcement agencies are increasingly holding companies accountable for corrupt activity. A number of major international companies have found themselves the subject of corruption-related investigations, often facing severe penalties for their misconduct. On the domestic front, the Thai government has recently introduced a series of reforms aimed at strengthening anti-corruption enforcement in Thailand. These reforms, coupled with the growing pressure from the private sector in Thailand to clean up business practices, indicate that Thailands stance against corruption is graduallyhardening. Recent international corruption cases A UK-based drinks company In July 2011, the SEC brought charges against a UK-based drinks company, for allegedly paying over US$2.7 million to foreign government ofcials through its subsidiaries to secure lucrative sales and tax benets. According to the SEC, from 2004 to mid-2008, the company allegedly paid almost US$600,000 (about US$12,000 per month) to a Thai government and political party ofcial, who successfully lobbied the Thai government to resolve the companys multi-million dollar tax and customs disputes in its favour. The company settled with the SEC for US$16 million without admitting or denying the SECs allegations. Alliance One International, Inc and Universal Corporation In August 2010, two tobacco companies, Alliance One International, Inc. and Universal Corporation, settled allegations of FCPA violations in Thailand with the SEC and DOJ. The allegations concerned alleged payments to Thai government ofcials to secure contracts with the state-owned Thailand Tobacco Monopoly for the sale of tobacco leaf. Without admitting or denying the SECs allegations made against them, the companies agreed to pay US$13.8 million in criminal penalties and to disgorge an additional US$14.5 million of prots. Alliance One also agreed to cooperate with the ongoing investigation, and to retain an independent compliance monitor for a minimum of three years to oversee the implementation of an anti-bribery and anti-corruption compliance program and to report periodically to the DOJ. The Greens and the Siriwans In 2009, Gerald and Patricia Green, two Hollywood producers, were found guilty of a conspiracy to violate the FCPA and to commit money laundering offences following a criminal trial. The charges laid against them concerned payments allegedly made to the former Governor of the Tourism Authority of Thailand, Ms Juthamas Siriwan. The payments were allegedly made in order to obtain a series of Thai government contracts, including the contract to manage and operate Thailands yearly lm festival. The Greens were subsequently sentenced to imprisonment in 2010.
Part 2:

Thailand (continued)
Following from the conviction of the Greens, an indictment was unsealed against Ms Siriwan and her daughter, MsJittisopa Siriwan in January 2010. The DOJ has charged the Siriwans with violating the Money Laundering ControlAct by, among other things, transmitting funds to promote unlawful activity, namely the violation of the FCPA and the violation of Thailands Penal Code, which prohibits the bribery of public ofcials. The charges against the Siriwans are relatively novel. The Siriwans have not been charged with violations of the FCPA per se because the FCPA does not criminalise the conduct of foreign ofcials receiving bribes. By framing the offences as money laundering charges, the DOJ has circumvented this apparent limitation in the FCPA. The progress of the case since unsealing of the indictment has been limited, but is being carefully watched, opening as it does the prospect of similar charges being brought in the US courts in the future against other foreign public ofcials. Recent domestic corruption cases The Siriwans, who are currently residing in Thailand, are facing possible corruption charges at home as well. The National Anti-Corruption Commission (NACC) has recommended that the Siriwans be prosecuted for allegedly taking bribes from the Greens. Recent developments in domestic anti-corruption legislation In April 2011, Thailand amended its Organic Act on Counter Corruption. The amendments provided, among other matters, rules for the protection of key witnesses, an extension of time for ling complaints and additional powers for the NACC. As a direct result of the amendments, the NACC issued a notication stipulating that private sector entities entering into procurement contracts with government agencies are required to prepare an annual review of their expense accounts for the Revenue Department.
2011 CPI score
2.9
Vietnam
Overview Although considered by some as one of the potential nancial tigers of Asia, Vietnam is still struggling to attract its desired level of foreign investment. Many foreign companies have been put off investing because of corruption and other factors. Despite regulations in place to combat corruption, at the end of 2011 Vietnam was ranked 112 out of 183 countries on the CPI index. The key sources of anti-corruption law in Vietnam are the 2005 Law on Anti-Corruption and the Penal Code. Each has its own implementing legislation and is supplemented from time to time by regulations issued by the Government and the Prime Minister. The main governmental bodies in charge of anti-corruption activities are the Central Steering Committee for Corruption Prevention; the Government Inspectorate; the State Audit and the Ministry of Police. Vietnam is a signatory to the United Nations Convention Against Corruption and has also entered into regional anti-corruption agreements with Laos and Cambodia. In addition, the government has also drawn up a National Anti-Corruption Strategy Towards 2020 which sets out the governments goals for the next eight years. Recent international corruption cases Securency International The UKs Serious Fraud Ofce and the Australian Federal Police have alleged that the former deputy chairman of Securency conspired in 2003 to pay for the son of the then governor of Vietnams state-owned bank to attend Durham University in order to secure contracts awarded by the State Bank of Vietnam for the production and supply of bank notes. He pleaded not guilty on 2 March 2012 at Southwark Crown Court. A trial has been set for November 2012. The former deputy chairman, whose next court appearance is in September, remains on unconditional bail. This case is of particular interest as it has involved a high degree of international cooperation between corruption prosecutors around the world.
Part 2:

Vietnam (continued)
Veraz Networks The SEC charged California-based telecommunication solutions provider Veraz with alleged violations of the books and records and internal controls provisions of the FCPA in connection with improper payments to government ofcials in Vietnam following the companys IPO in April 2007. On 29 June 2010, Veraz consented to the entry of a nal judgment without admitting or denying the SECs allegations and was ordered to pay a US$300,000 civil penalty. Recent domestic corruption cases On 18 October 2010, a Vietnamese former deputy director of the Ministry of Transportation was sentenced by a Vietnamese court to life imprisonment for accepting a bribe from a Japanese company to secure contracts for road projects including the East-West Highway project. In September 2011, this sentence was reduced to twenty years on on appeal.
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Asiaanti-corruption

Herbert Smiths Asia anti-corruption report | issue 1 Summer 2012

2 | Asiaanti-corruption Summer 2012

Herbert Smiths Asia anti-corruption report | issue 1 (Summer 2012)

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Part 1: The international anti-corruption environment

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The international anti-corruption environment (continued)

5.1 4.4 3.8

0.76 2007 2008 2009 2010 2011

Fine (US$ 100 million)

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Number of US and non-US companies prosecuted by SEC/DOJ - 2005-2011

6 2 2007 2008 2009 2010

FCPA enforcement actions

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The international anti-corruption environment (continued)

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The international anti-corruption environment (continued)

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The international anti-corruption environment (continued)

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Part 2: Recent anti-corruption developments in Asia

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2011 CPI score

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Recent anti-corruption developments in Asia (continued)

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2011 CPI score

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Recent anti-corruption developments in Asia (continued)

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2011 BPI score 2011 CPI score

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Recent anti-corruption developments in Asia (continued)

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2011 BPI score 2011 CPI score

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Recent anti-corruption developments in Asia (continued)

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2011 BPI score 2011 CPI score

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Recent anti-corruption developments in Asia (continued)

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2011 BPI score 2011 CPI score

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Recent anti-corruption developments in Asia (continued)

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2011 BPI score 2011 CPI score

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Recent anti-corruption developments in Asia (continued)

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2011 BPI score 2011 CPI score

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Recent anti-corruption developments in Asia (continued)

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2011 BPI score 2011 CPI score