20 July, 2015
Recent amendments to the Organic Act on Counter Corruption B.E. 2542 (1999) have created a new suite of bribery offences for foreign public officials, international organisation workers and state officials who ask for or accept bribes and for individuals and legal entities who offer or give bribes to foreign officials, international organisation workers or state officials either directly or through “associated” persons. A severe penalty regime has been imposed for these offences, including the death penalty or life imprisonment. The amendments took effect on 12 July 2015.
Amendments to the Organic Act on Counter Corruption
The Organic Act on Counter Corruption B.E. 2542 (1999) (Organic Act) was enacted in 1999 to regulate public sector corruption. It established the National Anti-Corruption Commission (NACC), a regime for the inspection of assets and liabilities of state officials, including political office holders, state enterprises, state agencies and their officials and created criminal offences relating to conflicts of interest and corruption by state officials.
The recent amendments to the Organic Act expand the scope of criminal liability for corruption offences to include bribery of foreign officials and international organisation workers. To date the bribery of foreign officials was not covered by Thai bribery laws. Although the giving of bribes to Thai officials was already covered under the Penal Code, the amendments to the Organic Act now also contain provisions penalising the giving of bribes to both Thai and foreign officials. This means that the giving of bribes will now also fall within the remit of the NACC. Perhaps even more importantly, the amendment to the Organic Act contains a new provision which penalises a company where an employee, agent or “associated” company or person bribes a Thai or foreign official on behalf of the company. In this respect the amendment brings Thai anti-bribery laws closer to the UK Bribery Act.
Also, the Penal Code already provided for the death penalty for Thai officials asking for or accepting bribes. The death penalty has now been included in the new Organic Act provisions and extended to foreign officials and international organisation workers. The death penalty does not apply to givers of bribes.
Set out in more detail, the amendments include
- a new section 123/2 which makes it an offence for state officials, foreign officials or people working for international organisations to call for, accept or agree to accept property or any other benefit to lawfully or unlawfully carry out their duties, for the benefit of the bribe giver, or any other person. The penalty for this offence ranges from a sentence of 5 to 20 years, life in jail, or execution and a fine of between 100,000 Baht to 400,000 Baht.
- a new section 123/3 which makes it an offence for a person, who before taking office as a state official, foreign official or international organisation worker, calls for, accepts or agrees to accept property or any other benefit to lawfully or unlawfully carry out their official duties for the benefit of the bribe giver or any other person. The penalty for this offence ranges from a sentence of 5 to 20 years or life in jail and a fine of between 100,000 Baht to 400,000 Baht or both.
- a new section 123/4 which makes it an offence for a person to call for, accept or agree to accept property or any other benefit for himself or for any other person, in return for compelling or having compelled state officials, foreign officials, or people working for international organisations to lawfully or unlawfully carry out their duties for the benefit of any person by unlawful means or coercion. The penalty for this offence is a term of imprisonment not exceeding 5 years or a fine not exceeding 100,000 Baht or both.
- a new section 123/5 which makes it an offence to give, offer or agree to give property or any other benefit to state officials or foreign officials or people working for international organisations, in order to compel such person to lawfully or unlawfully carry out their duties or to delay any official duty. The penalty for this offence is a term of imprisonment not exceeding 5 years or a fine not exceeding 100,000 Baht or both.
- a new section 123/5 which provides that if the offender is an employee, agent, associated company or any person who represents or acts on behalf of a legal person, even if the person had no actual authority to do so, and compelled the commission of the official’s malfeasance or negligence for the benefit of the legal person and that legal person has no defence to the commission of the offence, the legal person will be guilty of having committed the offence. The penalty for a legal entity who commits this offence is a fine not exceeding twice the amount of the value of the given or offered bribe(s).
The term ‘foreign official’ is defined in the amendment as a person who holds a legislative, executive, administrative or judicial position for a foreign country or any other person who works for the government of a foreign country including as an employee of a government agency or state enterprise, whether they are elected, appointed, holding a permanent or temporary position or receive salaries or any other benefit or not.
The term ‘international organisation worker’ is defined in the amendment as a person who works for an international organisation or who is appointed by an international organisation to act on its behalf.
Other key changes brought into effect by the amendment include:
- The 20-year limitation period for trying criminal offences will be suspended if an accused person leaves the jurisdiction of the Kingdom of Thailand. The limitation period will recommence from the date that the accused person re-enters the jurisdiction.
- A new forfeiture regime giving courts a wide discretion to forfeit property or benefits used or obtained by the commission of an offence under the Organic Act.
Is the Thai anti-corruption regime likely to gain pace?
The amendments are significant and send a strong message to both foreign public officials and companies who become involved in bribery either directly or indirectly. There are a number of questions that arise in relation to the enforcement of these new rules. For example, it is hard to see how the Thai authorities propose to enforce the death penalty against foreign government officials, in particular if they are situated abroad. This raises highly political issues. It is noteworthy in this context that although the death penalty has been on the statute books in relation to Thai officials, to our knowledge, no one has, to date, been executed for bribery in Thailand.
Also, to date, there have been no significant enforcement actions against companies engaged in bribery. This may partly be due to the fact that it is difficult to establish liability of a company under the old Penal Code rule which requires someone who can be characterised as being the “directing mind and will” of the company giving or condoning the bribe. The amendment side-steps this hurdle by providing that a company may now be liable if any employee, agent or associated company or person bribes on behalf of the company, unless the company can provide a defence.
The amendments provide no indication what may constitute a defence, and, in particular, whether having adequate procedures in place (including due diligence and training) will qualify as a defence. We understand from the NACC that Guidelines will be released in respect of the amendments, although there is no indication as to when these may be expected and what points they will cover.
For further information, please contact:
Chinnawat Thongpakdee, Partner, Herber Smith Freehills
chinnawat.thongpakdee@hsf.com
Gavin Margetson, Partner, Herbert Smith Freehills
gavin.margetson@hsf.com
Pamela Kiesselbach, Senior Consultant, Herbert Smith Freehills
pamela.kiesselbach@hsf.com
Kyle Wombolt, Partner, Herbert Smith Freehills
kyle.wombolt@hsf.com
