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New developments in anti-corruption compliance in Thailand
As in many countries around Asia, corruption is still a significant problem for Thailand. On the 2016 Corruption Perceptions Index compiled by Transparency International, Thailand ranked a poor 101st from a total of 176 nations.
Given the country’s relatively weak position in this area, there have been questions in the past about the government’s appetite for consistent enforcement. As well, observers ask if the legislation Thailand has is sufficient to take compliance, particularly with regard to anti-corruption, to another level given the current international landscape.
In short, both the private and public sectors in Thailand have been keen to try to improve compliance practices in order to enhance the international community’s view of Thailand’s transparency levels and ensure that investors will be better protected from the risk of bribery.
Over the last couple of years, we have seen the local landscape relating to anti-corruption efforts change significantly. This has provided a clear indication of the government’s emphasis on combating corruption both at the domestic and transnational levels.
In 2015, the government amended the Act Supplementing the Constitution relating to the Prevention and Suppression of Corruption, BE 2542 (1999). This was brought about partly by Thailand’s ratification of the United Nations Convention Against Corruption.
One of the key amendments makes it clear that it is an offence to bribe not only Thai government officials but also officials of foreign states and international public organisations (such as the United Nations).
Under the amended Act, there is also a strict liability for a company (which may include liability for directors) where persons connected to it (such as its employees) bribe officials for the benefit of the company unless it has in place “appropriate internal control measures” to ensure compliance with the law and to limit its potential liability.
What are such “appropriate internal control measures”? To put it another way, how can companies ensure that they have sufficient internal controls in place that would satisfy the requirement outlined above.
Given the lack of clarity on this question, the Office of the National Anti-Corruption Commission has now announced “Guidelines on Appropriate Internal Control Measures for Juristic Persons to Prevent Bribery to State Officials, Foreign Public Officials and Agents of Public International Organisations” to clarify what will constitute appropriate internal controls.
The internal control measures under the Guidelines comprise eight fundamental elements. These are:
1. Strong, visible policies and support from top-level management to prevent bribery;
2. Risk assessment to effectively identify and evaluate exposure to bribery;
3. Enhanced and detailed measures for high-risk and vulnerable areas;
4. Application of anti-bribery measures to business partners;
5. Accurate books and accounting records;
6. Human resources management policies complementary to anti-bribery measures;
7. Communication mechanisms that encourage the reporting of suspicion of bribery; and
8. Periodic review and evaluation of anti-bribery prevention measures and their effectiveness.
It is important to note that the Guidelines recognise there is no “one-size-fits-all” solution. Significantly, whether or not the internal control measures adopted by a company will be deemed sufficient will ultimately depend on a number of internal and external factors, including the level of corruption risks it may face in its day-to-day operations.
Many of the elements under the Guidelines are similar to what have been issued by bodies including the US Department of Justice, the UK Serious Fraud Office and the Organization for Economic Co-operation and Development.
Although each of the guidelines may provide a varying amount of detail, it may be argued that the essential elements that all of the guidelines have in common on how to best create an effective compliance programme are leadership, risk assessment, standards and control, timing and communication, and monitoring, auditing and response.
For many multinational companies operating in Thailand (as well as other Thai companies, industry and trade associations including the Board of Trade and chambers of commerce), the use of such internal control measures is not something new.
Many multinationals already have in place internal control measures to prevent and detect corruption as they have been driven by other international regulations and norms in light of the US Foreign Corrupt Practices Act, the UK Bribery Act and other similar anti-corruption laws of the jurisdictions in which they may operate.
Thus, one of the indirect benefits of Thailand now having similar requirements is that it will create a level playing field for all companies operating in the country. More specifically, Thai companies that did not previously have any appropriate internal controls will now be required to ensure that they have in place such measures, which should match those standards already set by many other companies.
For example, companies will now have to consider, among other matters, implementing a compliance programme that includes risk assessment, written policies and procedures, as well as the provision of adequate information and training to directors, officers, management, employees, agents, other representatives and contractual parties.
While it may be wishful thinking to say that corruption can be eradicated completely, it is hoped that in the long run, the changes to Thailand’s anti-corruption laws could lead to an increase in the level of transparency. The Guidelines may not be the answer to every risk but they do provide an opportunity for every business to help enhance the country’s credibility by implementing appropriate internal control measures.
Source: https://www.bangkokpost.com/business/news/1343119/new-developments-in-anti-corruption-compliance-in-thailand