Anti-Corruption In Thailand.

25 July, 2018

 

1. Domestic bribery (private to public)

 

1.1       Legal framework

 

The Penal Code of Thailand generally criminalizes: (i) the offering of property or other benefits by a private party to an official for the purpose of inducing the official to act or omit to act, or to delay acting, contrary to the official’s functions; or (ii) the acceptance of, or demand for, property or other benefits by an official, for the purpose of inducing the official to act in accordance with the official’s functions or to omit to act, or to delay acting, contrary to the official’s functions. The Penal Code specifically criminalizes: (i) bribery of public officials, legislators, public prosecutors, judges and inquiry officials; (ii) soliciting or accepting gifts by public servants, public prosecutors and judges; (iii) malfeasance of public officials to obtain property or benefits; and (iv) malfeasance of public prosecutors and judges for property or benefits.

 

1.2       Definition of bribery

 

The Penal Code of Thailand does not provide a clear definition of bribery, but the meaning thereof can be inferred from relevant legal provisions.

 

Bribery: to give or promise to give property or any other benefit to an official, member of a state legislative assembly, member of a state legislative assembly or provincial assembly or member of a municipal assembly, official holding a judicial post, public prosecutor, or an official responsible for conducting cases or inquiries, so as to induce such person to do or not to do any act, or to delay the doing of any act, contrary to their duty.1

 

Under the Penal Code of Thailand, bribery can be committed both by public officials and by private individuals who attempt to bribe any public official, members of the state legislative assembly, members of a provincial or municipal assembly, public prosecutors, inquiry officials, judges or execution officers.

 

1.3       Definition of public official

 

Pursuant to the Penal Code of Thailand, “public officials” include not only public servants but also members of the state legislative assembly, members of provincial and municipal assemblies, public prosecutors, inquiry officials, judges and execution officers.

 

Supreme Court precedent has established two criteria providing a broad definition of a public official under the Thai Penal Code, as follows: 2

 

• A person appointed by the Kingdom of Thailand
• To public duties for the Kingdom of Thailand

 

Note that the definition of “public official” will also vary depending on the relevant Act governing the related crime.

 

Under the Act Supplementing the Constitution Relating to the Prevention and Suppression of Corruption B.E. 2542, “State Official” is defined as a person in a political position; a government official or local government official or employee holding a position or having a regular salary; an employee or person who carries out work in a state enterprise or state agency; a local administrative officer or member of a local council who is not a person holding a political position; a competent official under the law on local administration, including a committee member, sub-committee member, and employee of an authority, state enterprise or state agency; or a person or party who exercises or who has been authorized to exercise authority in the administration of the state in carrying out the state’s power, regardless of whether the administrative function is established under governmental bureaucratic channels, state enterprise or other activity of the state.3

 

Under the Act on Offenses by Officers in State Organizations or Agencies B.E. 2502, the term “Officer” is defined to include a board chairman, president, board member or person who performs work in an organization, limited company, registered partnership or agency, or a work unit otherwise named, where all the capital or more than 50% of it belongs to the state, and who receives a monthly salary or other benefits in return from the organization, limited company, registered partnership or agency, but excluding those persons who are already officials under the law.4

 

Under the Act on Offenses Relating to the Submission of Bids to Government Agencies B.E. 2542, “Government Agency” is defined as ministries, bureaus, departments, provincial administration authorities, local administration authorities, state enterprises, or other governmental agencies or agencies that perform public duties under the law and receive financial aid or capital from the state.5

 

1.4       Consequences of bribery

 

Penalties differ depending on whether the person committing the crime is a private party bribing a public official or a public official accepting a bribe under the Penal Code (Titles II and III) or other relevant legislation.

 

(a) Penalties for a private party bribing public officials

 

(i)         For the private individual involved

 

• Imprisonment not exceeding five years or a fine not exceeding THB 10,000, or both imprisonment and a fine, for bribing a public official, member of the state legislative assembly or member of a provincial or municipal assembly to act or refrain from acting or to delay acting. 6
• Imprisonment not exceeding seven years and a fine not exceeding THB 14,000 for agreeing to give a benefit to an official holding a judicial post, a public prosecutor, inquiry official, judge or execution officer so that such person will wrongly do or not do any act or will delay in acting7
• Imprisonment for one year to three years, or a fine equal to 50% of the highest bid by offenders or the value of the contract, whichever is higher, for collaborating in the submission of bids to provide a benefit by avoiding fair competition, or preventing the offer of other goods or services, or taking advantage of government agencies.8
• Imprisonment for one year to five years and a fine equal to 50% of the highest bid by offenders or the value of the contract, whichever is higher, for providing money or benefits to induce a person to submit a bid at a high or low level, or to refrain from bidding or to withdraw a bid. 9
• Imprisonment for five years to 10 years and a fine equal to 50% of the highest bid by the offenders or the value of the contract, whichever is higher, for compelling a person, including by force or violence, to involuntarily participate or not participate in the submission of bids or to withdraw bids.10
• Imprisonment for one year to five years and a fine equal to 50% of the highest bid by the offenders or the value of the contract, whichever is higher, for using deceitful means to deprive others of an opportunity to make fair submissions or to cause a mistaken submission of bids.11
• Imprisonment for one year to three years or a fine equal to 50% of the highest bid by the offenders for dishonestly submitting a low or high bid.12

 

(ii)        For the private company or legal entity involved

 

• A fine not exceeding THB 10,000 for bribing a public official to act or refrain from acting.13
• A fine not exceeding THB 14,000 for agreeing to give a benefit to an official to wrongly do or not do any act.14

 

(b) Penalties for public officials demanding or accepting bribes

 

• Imprisonment for five years to 20 years, or imprisonment for life, and a fine of THB 2,000 to THB 40,000, or death, for abuse of public power through coercion, or for accepting an inducement to act or not act before or after appointment.15
• Imprisonment for one year to 10 years or a fine of THB 2,000 to THB 20,000, or both imprisonment and a fine, for an officer with a duty of managing business who takes an interest in the business for his or others’ benefit; or for an officer with a duty related to disbursement who makes a disbursement to himself or to others; or for an officer who unlawfully performs or fails to perform a duty, thereby causing injury to others.16
• Imprisonment for five years to 20 years, or for life, and a fine of THB 2,000 to THB 40,000 for an officer guilty of misappropriation; or for an officer a with duty related to procurement who unlawfully acts in a manner that damages business.17
• Imprisonment for five years to 20 years, or for life, and a fine of THB 2,000 to THB 40,000 for an officer who acts or refrains from acting based on benefits he consented to receive prior to appointment or procurement; or for an officer who unlawfully exercises his power, causing damage to the organization.18
• Imprisonment for five years to 20 years, or for life, or the death penalty, and fine of THB 2,000 to THB 40,000 for an officer who uses coercion to obtain property; or for an officer who unlawfully asks to receive benefits. 19
• Imprisonment for one year to 10 years and a fine of THB 20,000 to THB 200,000 for malfeasance by an officer with power to approve or consider bids.20
• Imprisonment for five years to 20 years, or for life, and a fine of THB 100,000 to THB 400,000 for an official who dishonestly designs price specifications, conditions or kickbacks in order to prevent fair competition; or for an official who prevents fair competition during bidding.21
• Imprisonment for seven years to 20 years, or for life, and a fine of THB 140,000 to THB 400,000 for a political officer, holder of political office, local administrator, member of a local administrative council or committee or sub-committee member who violates the Act on Offenses Relating to the Submission of Bids to Government Agencies B.E. 2542, or commits any act against officials in relation to the submission of bids in order to induce or influence the acceptance of certain bids.22

 

1.5       Political contributions

 

Contributions to political parties are regulated under the Act Supplementing the Constitution Concerning Political Parties B.E. 2550. In general terms, a party leader, members of the party’s administrative committee and sub-administrative committee, and general party members are prohibited from personally receiving any contributions or benefits from an anonymous source. The law applies different measures regarding disclosure of information with respect to the granting of political contributions depending on the value of such contributions, as follows:

 

For any political contribution with a value higher than THB 1,000, the name of the contributor must be disclosed and made accessible for scrutiny.

 

For any political contribution with a value higher than THB 5,000, the name of the contributor must be disclosed to the public.

 

For any political contribution with a value higher than THB 20,000, the contribution must be made in the form of a bill of exchange or a crossed check.

 

For any political contribution with a value higher than THB 5 million, the contributing company or legal entity must receive prior approval or endorsement from the board of directors or the shareholders or members of such juristic person.

However, individuals and legal entities are prohibited from making political contributions to a political party in excess of THB 10 million per annum.

 

Political contributions are tax deductible, and it is possible for individuals to deduct up to THB 5,000 per annum and for companies and legal entities to deduct up to THB 20,000 per annum for political contributions.

 

Any individual taxpayer who holds Thai nationality is entitled to make contributions of THB 100 to one political party by indicating such in the annual income tax form as prescribed by the regulations of the Revenue Department (No. 176) concerning standards and processes of political contribution, dated 17 February 2009.23

 

1.6       Limitations applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)

 

The Act Supplementing the Constitution on Anti-Corruption B.E. 2542 prohibits public officials from receiving gifts, either in the form of tangible assets or other benefits, from other individuals, except for those they are legally entitled to receive and those received per moral obligation.24

 

The regulations of the National Anti-Corruption Commission concerning criteria for a public official’s receipt of gifts or other benefits by moral obligation B.E. 2543 further establish a quantitative limitation on hospitality expenses. In essence, hospitality expenses would not be considered bribery provided they fall under any of the following scenarios:25

 

(a) The hospitality is received from a relative of the receiver and the hospitality has proper value corresponding to the social status of the receiver.

 

(b) The hospitality is received from another person who is not a relative of the receiver and the value of the hospitality does not exceed THB 3,000 per occasion and per person.

 

(c) The hospitality is received in the manner that such hospitality is given to many undesignated persons.

 

2. Domestic bribery (private to private)
 

2.1       Legal framework

 

Bribery laws do not generally extend to promises or gifts requested or accepted and offered or made among persons in the private sector.

 

Unlike the case of public officials, there is no specific law governing private bribery committed by non-governmental persons or entities. However, commercial bribery, as one kind of corporate fraud, may be considered a crime under the Penal Code of Thailand.

 

2.2       Definition of private bribery

 

There is no specific definition of “private bribery” under Thai law. However, bribery schemes in Thailand generally fall under two broad categories:

 

(a) Kickbacks – undisclosed payments made by a vendor to an employee of the purchasing company

 

(b) Bid-rigging – where the employees of a customer fraudulently assist a vendor in winning a contract through a competitive bidding process

 

2.3       Consequences of private bribery

 

Penalties for private bribery vary according to the nature of the crime and the type of legal organization for which the perpetrator works.

 

Imprisonment not exceeding three years or a fine not exceeding THB 6,000, or both imprisonment and a fine, for an employee who is entrusted to manage another person’s property or property co-owned by another person and who dishonestly acts contrary to his duty and jeopardizes the benefits of such other person.26

 

A fine not exceeding THB 5,000 for a person responsible for the operation of an ordinary partnership, limited partnership or limited company, who dishonestly acts or omits to act in order to illegally gain benefits for himself or other persons27

 

A fine not exceeding THB 50,000 for a person responsible for the operation of the business of a public company limited who dishonestly acts or omits to act in order to illegally gain benefits for himself or other persons, thus causing damages to such company28

 

Imprisonment for five years to 10 years and a fine of THB 500,000 to THB 1 million for a director or manager or any person responsible for the operation of a company who dishonestly acts or omits to act in order to illegally gain benefits for himself or other persons, thereby causing damages to such company29

 

Imprisonment for five years to 10 years and a fine of THB 500,000 to THB 1 million for a director or manager or any person responsible for the operation of a company who is entrusted to manage property that the company owns or co- owns and who dishonestly acts or omits to act in order to illegally gain benefits for himself or other persons, thus causing damages to such company30

 

2.4       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)

 

The Thai Penal Code does not establish quantitative or qualitative limitations on hospitality expenses that may be deemed as private bribery. However, illegal gratuities are prohibited by most private company codes of ethics, work rules, regulations or orders. A violation of these rules or regulations may result in termination of employment without severance pay, provided that the employer has already given a written warning, except in serious situations where the employer is not required to give a warning.31

 

In the absence of specific legal provisions governing private bribery, whether a hospitality expense could be considered bribery will need to be determined on a case-by-case basis, taking into account all the facts and circumstances surrounding the case and applying the two previously referenced criteria.

 

3. Corruption of foreign public officials
 

3.1       Legal framework

 

Recent amendments to existing legislation have expanded the scope of Thai anti-corruption laws to cover private bribery involving State Officials, Foreign State Officials and International Organization Officials.32 The new legislation covers: (1) an official who demands or accepts a bribe; (2) a private party who accepts property or benefits to act as a middleman to induce an official to act improperly; and (3) a private party making a bribe, as well as a juristic entity with which the private party is related and for whose benefit a bribe has been made, if the juristic entity does not have appropriate internal control measures to prevent the offense.

 

3.2       Definition of corruption of foreign public officials

 

With respect to bribery of an official by a private party, “Any person who gives, requests to give, or agrees to give property or any other benefits to a State Official, Foreign State Official, or International Organization Official to induce the official to act or omit any act, or delay any act in violation of their duties.”

 

3.3       Definition of foreign public official

 

“State Official” has the same meaning ascribed to it in Paragraph 1.3.2, above.

 

“Foreign State Official” means a person with legislative, executive, administrative or judicial positions of a foreign state, and any person who performs government works for a foreign state and performs duties for government agencies or state enterprises, regardless of whether such person has been appointed or elected, holds a permanent or temporary position, or receives salary or other remuneration.

 

“International Organization Official” means a person who works in an international organization or a person assigned by an international organization to perform work on behalf of the international organization.

 

3.4       Consequences of corruption of foreign public officials

 

With respect to bribery of an official by a private party, the penalty is imprisonment not exceeding five years, or fine not exceeding THB 100,000, or both.

 

With respect to bribery of an official by a private party who is related to, and has acted for the benefit of, a juristic entity that does not have appropriate internal control measures to prevent the offense, the penalty is a fine equal to one, but not exceeding two times, the damages incurred or the benefits obtained.

 

The court is also empowered to order the forfeiture of: (1) property used or possessed for use in the commission of an offense; (2) property or other tangible benefits obtained from commission of an offense or from acting as instigator, supporter, or person advertising or offering to the general public to commit the offense; (3) property or other tangible benefits obtained from the sale or disposal of property or benefit under (1) or (2); or (4) any other benefits arising from the benefit or property under (1), (2) or (3).

 

3.5       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)

 

N/A

 

4. Facilitation payments

 

There are no exceptions for or limitations on “facilitation expenses” that exclude them from the definition of bribery, whether in the public or private arena. Each such expense must be evaluated on its own and with consideration to the surrounding facts in order to determine whether it is likely to be considered a bribe.

 

5. Compliance programs
 

5.1       Value of a compliance program to mitigate/eliminate the criminal liability for legal entities

 

Other than the newly implemented legislation examined in Section 3.1 above, which suggests a juristic entity can limit or avoid liability by having appropriate internal control measures to prevent bribery of officials, there are no compliance program defences to liability that otherwise might be attached to acts of bribery in Thailand. However, it is possible that the court might take into account the existence and operation of such programs in considering the liability of, or penalties to be assessed against, a violator, such as a corporate body whose employee engaged in an act of bribery without authorization. The absence of such a compliance program is not in itself an offense and Thai law does not prescribe which elements must be included in a compliance program.

 

5.2       Absence of a compliance program as a crime

 

The Thai Penal Code does not recognize the failure to implement a compliance program as a crime.

 

5.3       Elements of Compliance Program

 

(a) Legal framework

 

N/A

 

(b) Recommended practice

 

N/A

 

6. Prosecution and enforcement
 

6.1      Responsible agencies

 

There are a number of enforcement agencies under Thai legislation empowered to prosecute corruption, including the various police bodies: the National Counter Corruption Commission (NCCC or NACC); the Anti-Money Laundering Office (AMLO); the Department of Special Investigation (DSI); the Election Commission of Thailand; the Assets Examination Committee (AEC); the National Counter Corruption Commission (NCCC); the Office of the Civil Service Commission; the Office of the Council of State (responsible for interpreting legislation); the Office of the Ombudsman; the Public Prosecutor; the Office of the Auditor General; and the Office of the Public Sector Anti-Corruption Commission (PACC).

 

6.2      Courtsystem

 

On 1 October 2016, the vast majority of criminal cases came under the jurisdiction of the newly established Criminal Court for Corruption and Malfeasance Cases, following the publication of an act earlier that year.33 It now has jurisdiction over all cases concerning:

 

• state officials charged with malfeasance or suspicious irregularities in office; state officials charged with money laundering and violations of laws on bidding and joint ventures between private and government sectors;
• individuals charged with giving, receiving or demanding bribes and intimidating, coercing or using influence to force state officials to act or not to act in accordance with the Penal Code of Thailand; and
• individuals charged with deliberately refusing to declare assets, falsely declaring assets or covering up assets that should have been declared.

 

 

For further information, please contact: