Mini Summit V Interaction of UK Bribery Act, New Chinese Anti Bribery Act Law, FCPA & Asia Pacific National Anti-Corruption Laws Asia Pacific National Anti-Corruption Laws Geeta Thakerar, Solicitor, GlaxoSmithKline The First Asia Pacific Pharmaceutical Compliance Congress and Best 14 th September 2011, Ritz Carlton Millennia, Singapore
Agenda OECD Snap Shot of National Anti-Corruption Laws in Asia Pacific Recent AP Trends Q&A? 2
OECD (Organisation For Economic Cooperation and Development) Convention on Combating Bribery 1997 Backdrop:- Acknowledgement bribery widespread phenomenon in international business transactions including trade investment. Serious moral and political concerns. Undermines good governance/economic development. Distorts international competitive conditions. All countries have shared responsibility to combat bribery in international business. Key Objectives:- Requires signatory countries (most Asian markets) to enact anti bribery legislation establish a criminal offence under its law for persons intentionally who promise or give undue pecuniary advantage, directly/through intermediaries to foreign public official for that official to act or refrain from acting in relation to the performance of official duties in order to obtain or retain business or improper advantage in the conduct of international business. Covers complicity including incitement/aiding/abetting/authorisation of act of bribery of foreign public official = criminal offence. Sanctions include: dissuasive criminal penalties; monetary sanctions; measures regarding proceeds of bribery subject of seizure/confiscation. 3
Snap Shot of National Anti-Corruption Laws in Asia Pacific 4
Snap Shot of National Anti-Corruption Laws in Asia Pacific (Cont d) 5
Snap Shot of National Anti-Corruption Laws in Asia Pacific (Cont d) 6
Snap Shot of National Anti-Corruption Laws in Asia Pacific (Cont d) 7
Snap Shot of National Anti-Corruption Laws in Asia Pacific (Cont d) 8
Snap Shot of National Anti-Corruption Laws in Asia Pacific (Cont d) 9
Snap Shot of National Anti-Corruption Laws in Asia Pacific (Cont d) 10
Snap Shot of National Anti-Corruption Laws in Asia Pacific (Cont d) 11
Snap Shot of National Anti-Corruption Laws in Asia Pacific (Cont d) 12
Recent Trends 1. Increasing FCPA investigations in Asia some examples include:- Indonesia: Innospec (US based specialty chemicals) UK arm of the company Thailand: Alliance One (tobacco) China: Veraz networks (Communications firm) Rockwell Automation Inc Maxwell Technologies Inc Avon China Mobile Case China/Korea IBM case Japan: JGC Corporation 13
Recent Trends (Cont d) 2. Increasing OECD investigations some examples: Korea: Incheon district prosecutor s office Australia: Securency (Reserve Bank of Australia) 3. Increasing whistleblower activity With financial incentives for whistleblowers giving information assisting with investigations. 4. Increasing scrutiny on depth of due diligence a company conducts What is substance of DD done? Technip (global engineering construction firm) example of case which was really smoke and mirrors, effectively just sent a questionnaire and did not do much else nor was there follow up. Expectations is to do more than just submit a DD questionnaire. Also lack of internal controls in place to detect or prevent bribery. 14
Recent Trends (cont d) 5. Price reductions of drugs for unethical practices Medical Act of 2009 in Korea moves underway by Department of Insurance Pharmaceuticals ~ price up to 20% price reductions being imposed. Also numerous police investigations of doctors in recent months Busan and Ulsan (big cities in Korea) where police investigations of doctors and doctors associations. Dual Punishment enforcement ongoing still. More recently further announcements made by MOHW in Korea under present patent linkage system. This involve price cuts across all products which come off patent. Present MOHW patent linkage system replaced by New Maximum Reimbursement Price ( MRP ) system. The original drug price to be reduced to 70% when generics enter market and the MRP of first and all subsequent generics set at 59.5%. This to apply regardless of whether 1 st generic or tenth generic. After one year the MRP of both original as well as generic drug(s) to drop to 53.55% of original MRP of drug. The provisions apply retrospectively and will apply even to original drugs gone off patent and had their MRP reduced under current MRP patent linkage system. 15
Recent Trends (cont d) 5. Price reductions of drugs for unethical practices (Cont d) There is a process for amendments to the current legislation ongoing. MOHW has opened consultation to interested members of public as well as relevant government bodies. 6. Anti-Corruption Commission in State of Victoria, Australia Recent proposals underway for establishment of independent Anti-Corruption Commission. Stalled recently due to political debate over extent of powers. Review ongoing. 16
Recent Legislation Changes CHINA New clause to Art 164 the commercial bribery provision expands scope to company employees, enterprises as well as other units ~ covering non commercial entities such as NGOs Extra territorial application (PRC citizen, natural person located in China (even if only on short term basis) companies/entities organised under PRC law includes WFOEs (fully foreign owned enterprises) and FIEs (foreign invested enterprises). Official explanatory note/interpretation awaited. White Paper on China efforts to combat corruption and build clean government. In March 2011 implementation measures on Code of Ethics for officials of Communist party was issued following 2010 Code. Guidance measures provide useful guidance on what may constitute breaches and punishment for same. INDONESIA April 2011 Attorney General proposed law criminalising bribery of foreign officials as well as private section bribery ~ Also criminalises taking or receiving bribes by foreign official. 17
Recent Legislation Changes (Cont d) INDIA March 2011 Prevention of Bribery of Foreign Public Officials and Officials of Public International Bill introduced criminalisation of foreign bribery includes reciprocity regarding extradition penalties up to 7 years imprisonment and fines. TAIWAN New anti corruption agency 20 th July 2011 (AAC) based on Hong Kong set up to educate in addition to investigations ~ ex prosecutor in the Director General position Chou Chinh-Jung. Article II of Anti Corruption statue amended on 1 st July 2011. Bribery is now defined to include facilitating payments or grease payments to secure routine or expedite performance of routine government action by government officials (e.g. payment for facilitating the new drug listing in local public hospitals) considered criminal act of bribery. VIETNAM (VACI 2011) Vietnam Anti-Corruption Initiative Programme Strengthening public integrity and law implementation for effective anti-corruption in place. Focus is on healthcare amongst others. Also initiatives in the public procurement area ~ challenges system is decentralised. Efforts remain ongoing. 18
Q&A Thank You!