This publication spoke to Temaswiss, the Singapore-based think tank and training facility, about the Asian city-state's declared tougher regime over bribery and other financial wrongdoings.

Prime Minister Lee recently reiterated Singapore’s commitment towards the highest degree of integrity at the Public Service Values Conference. Plans were unveiled for a review of the Prevention of Corruption Act, an increase of the Corrupt Practices Investigation Bureau’s (CPIB) manpower by at least 20 per cent and the establishment of a Corruption Reporting Centre.

WealthBriefingAsia spoke to Suvendu Ganguli, chief operating officer of Temaswiss Wealth, an industry expert on ethics and conduct risks, on the context and implications of Singapore’s reinforcement.

What do the latest measures concern?
There is a lingering misconception in some quarters that corruption and bribery is associated solely to public officials and large sums of money. Let me reassure you that most instances have purely private sector implications and can be even for less than five-digit sums. Yet, undetected bribery events can relate to many crates of seafood for some unscrupulous executive chefs - as we know in Singapore from the recent past. Corrupt practices can exist in any function capable of influencing a deal, a sale, a licence or a vendor selection.

How are banks, and private banking in particular, concerned?
As facilitators of the monetary transactions, banks do, and always will, hold a frontline responsibility in the reporting of suspicious transactions. Almost a “raison-d’être” of private banking, private bankers have historically acquired almost an inherent divine right of hear-no-evil, see-no-evil and speak-no-evil. Specifically, it is almost a lese-majeste in the industry to ask any more questions to a high net worth customer other than the very basic KYC questions, even if an incongruent third-party transaction were to be noticed in an account.

It is astounding to this day how little, sometimes implausible and unverified responses from customers, as to the nature of a third-party transaction in an account, are documented as case-closure. Ironically and almost conveniently, seasoned bankers would always pull out the AML tip-off risks when pushed to ask more detailed questions. As an aggravating factor, I have yet to see in any jurisdiction a suspicious transactions reporting centre which is not overwhelmed with the sheer volume of suspicious transaction reports and bank-filed reports that provide a minimal snapshot view of a particular suspicious transaction.

What difference to anti-corruption can the banking world make?

Two-pronged measures to be considered. First, it must become a globally reinforced norm when a bank deems a transaction to be suspicious, or not-in-line with the customer’s known profile - the onus would lie with the customer to detail and provide documented evidence on the particular source or reasons for the transaction. Unfortunately, there are still huge differentials in non-US or non-OECD jurisdictions between how locally rooted banks are treated leniently by regulators as versus international counterparts operating in the foreign market. Secondly, unappetising as it may sound, there likely has to be a few deterrent ‘public hangings’ whereby an indicted customer is allowed a plea-bargain deal to testify against the banker.

We must however acknowledge that the laundering of the proceeds of corruption are extremely hard to detect in the present context of well layered transactions and with the use of proxy persons, accounts and investment company structures.

Unappetising as it may sound, the cowboy way of sentence-reduction plea bargain, where an indicted customer turns in hostile evidence on the banker being deemed informed (of the criminal nature) may well lead to some well-appointed public hangings of gung-ho bankers. By way of disclaimer, we must acknowledge however that laundering of the proceeds of corruption are extremely hard to detect in the context of well-layered transactions and with the use of proxy persons, accounts and investment company structures.   

What are, in your view, the typical industries at risk?
Singapore holds its rightful place as a global shipping, commerce, trading and banking hub. Every strategic industry, in a growth or a stagnation phase, comes with the risk tag. The lazy susan (turntable) would invariably rotate towards the deal-maker who exerts unfair influence. Shipping, bunkering, freight inspection, commodities trading and supply-chain, aerospace and defence contractors, construction and real estate, technology suppliers to banking giants, hospitality and healthcare - to name a few - are all within a priority risk category. Banks do need to reinforce awareness around: i) dealing with private banking customers who are executives or entrepreneurs in the priority risk industries (varies by location), ii) and in certain regions, Asia for sure, where a private banking account still accepts proceeds from a customer’s personal business deal.

What is the wider context of Singapore’s lighthouse reinforcement?
The World Bank estimates that corruption accounts for about $1 trillion a year worldwide. Proceeds of corruption in bribes received by public officials in developing and transition nations across Asia are estimated to be $20 billion per annum. This does not even include figures for purely private sector instances. The ACT-NET mechanism was launched at the APEC Summit in November 2014 for the cross-border sharing of information and inter-agency cooperation in efforts to combat corruption, bribery, money-laundering and illicit trade. Singapore’s position in Asia as a centrepiece of commerce comes with the corresponding burden of responsibility as a watchdog.

Do measures prompted by the government alone meet the mark?
The initiatives will no doubt be a game-changer. Yet, alone without complementary training measures in strategic industries, it will be a long and painful road wrought with hefty fines and jail sentences. As much as the vast majority of bribery cases are informed decisions by individuals playing a cat-and-mouse game, before you crack open the next bottle of soju while courting your delighted suppliers, think again. Let me be crystal clear on this front: all existing and future legislation places almost an equal burden of corrupt practices fallout upon the individual as well as the firm that failed to drive control and training measures. Does the risk-reward equation look different with this knowledge than the `Go to Jail’ on a monopoly game deck? I dare say yes.

Is there a risk-aggravating context?
In the centuries preceding currency-driven trade, barter was the original form of trade. Hence what I like to call the "bartering of favours". This can go from the relatively anodyne forms of lavish meals and entertainments, to paying for a business counterpart’s kids’ college abroad or medical tourism, to crude forms of cash briberies. While barter trade has long since gone, the culture of vying for and plying of favours has remained strongly ingrained in Asia. In some Far Eastern cultures it is an expected and acceptable form of presentation of respect closely associated with the conduct of business. There is a dire need to de-mystify the context and to reiterate fair and arms-length conduct of business.

How impactful can training be to the overall risk mitigation effort?
For organisations that can demonstrate effective training measures, there could be a scenario for a plea bargain. We at Temaswiss have observed currently available private or corporate training schemes to be skewered either towards legalistic, regulatory contexts or towards banking and flow-of-funds contexts.

In the forthcoming Ethics & Conduct Risks courses tailored for select industries, jointly offered by TrainingEdge and Temaswiss, unique emphasis is upon the following areas: making it relevant – industry-specific case studies for all sales and negotiating functions; keeping It simple – focus on behaviours and simple supervisory best-practices, and acknowledging cultures – de-mystifying contexts to drive informed ethical standards.