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21 August, 2018
A new anti-corruption law has come into effect in Thailand. Formally named the Act Supplementing the Constitution Relating to the Prevention and Suppression of Corruption B.E. 2561 (2018) (the “New Anti-Corruption Law”), it repeals and replaces the 1999 Organic Act on Counter Corruption and its various amendments (the “Old OACC”).
The New Anti-Corruption Law largely keeps in place the key 2015 amendments in the Old OACC that criminalize bribe-giving by legal entities. Under the new law, legal entities—including corporations—can be criminally liable for bribes given to Thai state officials, foreign state officials, and officials with intergovernmental organizations. The legal entity is liable when the bribe is provided by an “associated person,” which can include employees, joint venture partners, agents, etc.
An important addition in the New Anti-Corruption Law is that the legal entities covered under the law now also include foreign juristic persons, meaning that it applies to organizations that are registered abroad but operating in Thailand. This would cover situations where a company may not have a physical presence in Thailand, but is using local agents to win government contracts, for example.
Similar to the Old OACC, the New Anti-Corruption Law also allows legal entities to reduce their liability if they have proper internal controls. In 2017, the National Anti-Corruption Commission (“NACC”), Thailand’s main anti-corruption enforcement agency, released a set of guidelines on what it deems to be appropriate internal controls under the law. These guidelines still apply under the New Anti-Corruption Law.
Punishment for bribery by corporations also remains the same in the new law. A legal entity can be punished with a fine of at least an equal amount of the benefit received from the corrupt act, but not more than twice the amount.
Another important change in the New Anti-Corruption Law involves NACC investigations. In the new law, the process by which the NACC can seek international cooperation in their investigations is streamlined. The NACC can also refer matters to its foreign counterparts. These changes are important, as anti-corruption investigations frequently cross borders and involve a number of countries and regulatory authorities. In these circumstances, the NACC can work with their foreign counterparts to obtain evidence and help build a criminal case against the bribe-givers and recipients in Thailand.
The New Anti-Corruption law also introduces a government-subsidized fund called the “National Anti-Corruption Fund.” The purpose of the fund is to support the NACC’s investigation costs, provide rewards to informants, and raise anti-corruption awareness in the Thai society.
The New Anti-Corruption Law comes in the wake of a number of high-profile corruption cases involving Thailand. Over the past few years, regulatory authorities in the U.S., U.K., and Japan have investigated corrupt activities involving multinationals paying bribes in Thailand. The New Anti-Corruption Law, and especially the expanded definition of legal entities, shows that the Thai government is seeking to further address the problem of corruption in Thailand. Companies doing business in Thailand should ensure compliance not just with international anti-corruption laws like the U.S. Foreign Corrupt Practices Act and U.K. Bribery Act, but with Thai regulations as well.
For further information, please contact:
John Frangos, Tilleke & Gibbins
john.fr@tilleke.com
