Investigations In Southeast Asia - Thailand

1) What are the key anti-corruption legislations?

The main legislation governing bribery and corruption in Thailand is the Organic Act on Anti-Corruption, B.E. 2561 (2018) (“OAAC”), which prohibits giving, offering, or promising benefits to public officials, foreign officials, or international organisation officials with corrupt intent.

Other key laws include the Administrative Measures for the Prevention and Suppression of Corruption Act B.E. 2551 (2008), which outlines preventive measures, and the Public Procurement and Supplies Administration Act B.E. 2560 (2017), which governs transparency in public procurement. The Act on Offenses Relating to the Submission of Bids to State Agencies B.E. 2542 (1999) addresses bid-rigging in government contracts.

Some of the other laws contributing to combating corruption in Thailand include the Civil Service Act B.E. 2551 (2008), the Act Governing Liability for Wrongful Acts of Competent Officers B.E. 2539 (1996), and the Anti-Money Laundering Act B.E. 2542 (1999) (“AMLA”).

2) Who are the enforcement bodies?

In Thailand, the main enforcement body responsible for investigating corruption is the National Anti-Corruption Commission (“NACC”), operating under the OAAC. The Public Sector Anti-Corruption Commission (“PACC”) enforces administrative measures, while the Anti-Money Laundering Office (“AMLO”) handles financial aspects under the AMLA.

Additionally, the Office of the Auditor General (“OAG”) oversees government finances to prevent misuse, and the Comptroller General's Department enforces the Public Procurement and Supplies Administration Act.

Beyond government enforcement bodies, the private sector, led by Thailand's Private Sector Collective Action Coalition Against Corruption (“CAC”), plays a crucial role in combating corruption. Supported by the National Anti-Corruption Commission, the CAC encourages companies to adopt anti-corruption policies and practices aligned with NACC guidelines and offers a certification program to recognise strong anti-corruption measures.

3) Is requesting or accepting a bribe prohibited by the legislation?

Yes, both requesting and accepting bribes are strictly prohibited under Thai law. The OAAC specifically prohibits public officials from requesting or accepting any benefit in exchange for performing or not performing their duties. Sections 128 and 129 of the OAAC address these offences, making it illegal for public officials to receive gifts or other benefits. Section 176 of the OAAC criminalises bribery and states that any person who gives, offers, or promises to give any property or benefit to a public official, foreign public official, or official of a public international organisation with the intent to induce the official to wrongfully perform, not perform, or delay the performance of their duty is liable to imprisonment for up to five years or a fine of up to THB 100,000, or both. Additionally, the company that the offender is associated with may also be held liable if they do not have appropriate internal control measures to prevent bribery. The fine for the company is up to twice the damages caused or benefits received.

Additionally, under the Criminal Code, Sections 144, 149, and 157 criminalise bribery and misconduct by public officials. Section 149 prohibits public officials from demanding or accepting benefits in exchange for improper actions, while Section 144 penalises attempts to bribe officials. Section 157 addresses misconduct or abuse of authority by public officials for personal gain.

4) What are some case studies / examples of gratification that might constitute bribery?

In Thailand, “gratification” can include a wide range of benefits, such as money, gifts, hospitality, or services offered to public officials. For example, lavish gifts or trips offered to officials to secure government contracts may constitute bribery under the OAAC. Hiring unqualified individuals connected to government officials in exchange for business favours can also be considered a form of gratification.

Additionally, offering excessive hospitality or travel expenses to public officials could be viewed as attempts to improperly influence their decisions.

5) What are possible defences?

In Thailand, corporate entities facing bribery charges may raise several defenses. These include demonstrating that the company implemented proper internal measures, such as a robust compliance program, regular employee training, and internal audits to prevent corruption. Additionally, a company may argue that the corrupt act was committed by a rogue employee without management’s knowledge or authorisation, especially if proper internal controls were in place. Cooperation with authorities during investigations can also be a mitigating factor, as can showing that the company did not benefit from the corrupt act.

6) Is there criminal liability for corporate entities who have either paid or accepted a bribe payment?

Yes. As mentioned in #3, corporate entities in Thailand can be held criminally liable for bribery or corruption offences.

6.1 Assuming corporate entities are liable for violating the legislation, what is the penalty for corporate entities violating the law?

Under Thai law, corporate entities found guilty of bribery can be fined up to twice the benefit obtained from the corrupt act, as per the OAAC. Additionally, the court may order the disgorgement of any profits gained through bribery to ensure that the company does not benefit from its unlawful conduct.

6.2 Assuming corporate entities are liable for violating the legislation, does having a compliance program designed to prevent bribery constitute a defence?

Section 176 of the OAAC specifies that if an employee, agent, or representative of a corporate entity offers a bribe to a public official for the benefit of the entity, and the entity lacks appropriate internal control measures to prevent such acts, the corporate entity can be held liable. Compliance programs, including clear anti-corruption policies, employee training, monitoring systems, and whistleblower mechanisms, can demonstrate a company’s efforts to prevent corrupt acts and may influence the severity of penalties.

6.3 Are companies required to disgorge profits earned as a result of bribery?

Yes, as mentioned in #6.1.

7) Are there any specific laws governing private-to-private bribery (i.e. bribery between private entities)?

While Thailand's current anti-corruption laws, such as the OAAC and the Criminal Code, primarily address bribery involving public officials, private-to-private bribery is not explicitly criminalised. However, certain private sector bribery practices can still be prosecuted under other relevant laws, including unfair trade practices under the Trade Competition Act, fraud under the Criminal Code, collusion in public procurement under the Bid Rigging Act, and conflict of interest under the Act on Offenses Related to Companies.

8) Is foreign bribery a crime?

Yes, foreign bribery is a crime in Thailand. The OAAC criminalises offering, promising, or giving benefits to foreign public officials or officials of international organisations to influence their actions. The penalties for foreign bribery, outlined in Sections 173 to 176 of the Act, include imprisonment and fines, similar to those for domestic bribery. This ensures Thailand’s alignment with international standards, including the United Nations Convention against Corruption (UNCAC), which Thailand has ratified.

9) Is a bribe payment to foreign government officials prohibited by the legislation?

Section 176 of the OAAC prohibits bribe payments to foreign government officials and officials of public international organisations.

10) Are facilitation payments legal?

Facilitation payments, often referred to as 'grease money,' are generally illegal in Thailand. However, a narrow exception exists for the givers under the OAAC and the Criminal Code, which do not penalise the givers for payments to government officials to act in accordance with official duties. However, the laws prohibit government officials from receiving any benefit for performing their duties, unless specifically authorised by law. This means that even if a facilitation payment is technically legal for the giver, the receiving official could still face criminal charges if the payment exceeds the permissible limits or is intended to influence a decision beyond routine duties.

11) What should corporate entities do when a potential bribery issue is reported or detected?

There is no standard procedure for handling potential bribery committed by personnel of the organisation. However, the general recommendations are as follows:

First, initiate an internal investigation while simultaneously taking immediate action to communicate with relevant personnel to secure all documentation, records, and communications as evidence.

Second, seek legal advice (either from in-house legal counsel or external legal counsel) to assess the risk of potential criminal liability, assess the impact on the company, and determine the appropriate course of action.

Third, self-report the bribery. While self-reporting bribery to government officials is neither required nor compulsory under Thai law, proactively self-reporting can help establish the company’s good intent and demonstrate that it does not involve itself with or support wrongdoing of its personnel if the investigation later expands. Selfreporting may increase the chances of a non-prosecution agreement, but the outcome ultimately depends on various factors.

Lastly, enforce disciplinary action against the personnel involved. This would depend on the investigation findings and applicable regulations in place.

12) If a company wishes to commence corporate investigations in respect of potential wrongdoing, who should conduct these investigations? Should corporate entities appoint lawyers to do so?

Similarly, there is no single solution that applies to all circumstances. It is recommended that the internal department responsible for legal and compliance matters conduct the preliminary investigation first, as it should have a good understanding of the situation and factors surrounding the incident. If the wrongdoing involves complex legal matters that require specialised expertise, and the company lacks the capacity to handle the issue, then engaging external counsel is also an alternative.

13) Are companies required to self-report bribery? Assuming corporate entities are liable for violating the anti-corruption law, is it possible for a corporate entity to reach a deferred prosecution agreement or leniency agreement with the enforcement authorities?

Self-reporting bribery to government officials is not compulsory under Thai law, and in the context of Thai legal proceedings, a deferred prosecution agreement or leniency agreement is not applicable.

However, self-reporting may allow the company to be considered by the NACC, under Section 135 of the OAAC, for exclusion from prosecution and protection as a witness. Furthermore, if self-reporting is done in good faith, the company will be immune to both civil and criminal liabilities pursuant to Section 132 of the OAAC.

14) Does the law provide any protection or other incentives for whistle-blowers?

Whistle-blowers may be granted protection through a witness protection program at the discretion of the NACC according to Section 131 of the OAAC and the Witness Protection Act in Criminal Cases.

There is currently no statutory provision to provide incentives for civilian whistle-blowers who report information useful for an NACC investigation relating to bribery and corruption.

However, if the whistle-blower is a civil servant or public officer, they may be entitled to a promotion and salary increase if the NACC determines that the reported information is exceptionally useful, and that the individual deserves recognition as a respectable model of a government official according to Section 131 paragraph 4 of the OAAC.

15) What can corporate entities do to prevent corruption in a company?

From the start, the company may follow the Guidelines on the Appropriate Internal Control Measures for Juristic Entities to Prevent Bribery of Public Officials, Foreign Public Officials or Official of Public International Organisations, published by the NACC in 2019, as a model for internal controls and preventive measures against bribery.

The guidelines address eight principles for appropriate internal control measures:

(i) Anti-corruption must be an important policy issued by top management.

(ii) A juristic entity must conduct an anti-corruption risk assessment.

(iii) Measures/policies relating to corruption risks must be detailed and clear.

(iv) Juristic entities must apply anti-corruption measures to persons who have business relations with the juristic entity.

(v) A juristic entity must have a good accounting system.

(vi) A juristic entity must have human resources management guidelines that correspond to anti-corruption measures.

(vii) A juristic entity must have measures to support reporting of offences or suspicious incidents.

(viii) Juristic entities must review, check, and assess their anticorruption measures periodically.

16) How can corporate entities implement an anti-corruption policy and create a code of conduct?

Establishing and implementing an anti-corruption policy and a code of conduct requires cooperation from all stakeholders within the company. An anti-corruption policy resembles a charter that affirms the commitment of the top management to tackle corruption within the company. It is essential to clearly communicate the significance of the anti-corruption efforts to all employees and stakeholders and ensure compliance with the relevant local laws and regulations. Without a clear message and legal compliance, the anti-corruption policy is unlikely to be effectively implemented.

The code of conduct is a transformation of the anti-corruption policy into practice. It defines standards and sets clear expectations on employees’ behaviour. Nevertheless, while adhering to the anticorruption policy, the code of conduct must be tailored to reflect the practices of the industry and business in which the company is operating. Furthermore, participation from employees is also necessary to ensure that the code of conduct is reasonable and acceptable for practice.

Originally published by DNA

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