Taking extra care in complying to corruption rules is strongly advised.
According to Trace Matrix, a research firm which measures bribery risk in all countries, companies continue to choose Singapore as an investment hub in Southeast Asia because of its comprehensive and effective legal system. The low level of corruption is widely attributed to very tough laws against bribery and fraud, very strict enforcement and high salaries for government officials to incentivize good behavior.
However, precisely because of Singapore’s low corruption-risk rating, Trace warns that foreign companies operating in this country should take extra care not to be lax with respect to compliance issues.
"Surprisingly, many companies operating in Singapore have no written anti-bribery and corruption policy or have yet to implement risk-based and ongoing due diligence on third parties," said Trace.
According to Trace, recent corruption cases reveal situations where foreign companies funnel bribes to foreign officials through Singaporean subsidiaries or consultants. For instance, companies have been known to use intermediaries operating in Singapore as a conduit for illicit payments heading to Malaysia, Vietnam and Indonesia.
This trend and Singapore’s inherent risks as a leading international financial center, it said, have led the government to crack down on money laundering and to impose stringent Know Your Customer (KYC) rules. In turn, these measures have resulted in long delays in opening bank accounts, as well as an acute shortage of qualified local compliance officers.
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