Criminal Law Reform Bill introduced to reform Penal Code in various areas including corporate crime

26 February 2019

On 11 February 2019, the Criminal Law Reform Bill (“Bill”) was tabled for first reading in Parliament. Among other things, the Bill introduces amendments to the Penal Code to ensure it remains relevant and up to date.

Background

In July 2016, the Ministry of Home Affairs (“MHA”) and the Ministry of Law (“MinLaw”) convened the Penal Code Review Committee (“PCRC”) to undertake a review of the Penal Code and make recommendations for reform. The PCRC’s report and recommendations were submitted to the Minister for Home Affairs and Minister for Law on 31 August 2018. On 10 September 2018, MHA and MinLaw jointly issued a consultation paper seeking feedback on proposed amendments to the Penal Code.

In a press release issued on 11 February 2019, MHA announced that the Government has considered the PCRC recommendations and agrees with most of them, and will amend the Penal Code and other legislation to implement them.

This article highlights provisions in the Bill which are relevant to the area of corporate crime.

New fraud offence

The Bill introduces a new offence of fraud. This new offence will be committed when any person fraudulently or dishonestly (a) makes a representation, (b) fails to disclose information which he is under a legal duty to disclose, or (c) abuses, whether by act or omission, a position he occupies in which he is expected to safeguard, or not to act against, the financial interests of another person. Unlike the offence of cheating in section 415 of the Penal Code, this new offence does not require that the victim was induced to do or omit to do certain acts, which act or omission causes or is likely to cause damage or harm to any person. Instead, the new offence focuses on the dishonest or fraudulent intent and acts of the accused person and not their effect on an alleged victim.

The offence is punishable with imprisonment for a term which may extend to 20 years, or with a fine, or with both.

Criminal breach of trust

Section 409 of the Penal Code, which sets out enhanced punishment for criminal breach of trust (“CBT”) when committed by certain categories of persons, will be amended to rationalise the categories of relationships covered by the provision. In Public Prosecutor v Lam Leng Hung [2018] SGCA 7, the Singapore Court of Appeal upheld the decision of the High Court that section 409 did not cover directors of corporations, governing board members or key officers of a charity, and officers of a society. Such persons committing CBT would therefore have been punished instead under section 406 for criminal breach of trust simpliciter.

Under the Bill, section 409 will be amended to apply the enhanced punishment to persons who are entrusted with property:

  • in his or her capacity as a public servant; 
  • in the way of his or her trade, profession or business as a banker, a merchant, a factor, a broker, an attorney or an agent; 
  • in his or her professional capacity (other than by way of a trade, profession or business as a banker, a merchant, a factor, a broker, an attorney or an agent);
  •  in his or her capacity as (i) a director of a corporation, (ii) an officer of an unincorporated association, (iii) a partner in a partnership, or (iv) a key executive of a corporation, an unincorporated association or a partnership; or
  • in his or her capacity as a fiduciary.

The amended provision will apply to a director of a corporation, officer of an unincorporated association, partner in a partnership, key executive of a corporation, unincorporated association or partnership even though that person did not receive any salary or other remuneration. The maximum punishment will also be reduced from life imprisonment to 20 years’ imprisonment.

Crimes committed in the virtual arena

In line with the PCRC’s recommendations to tackle crimes committed in the virtual arena, the Bill contains the following provisions:

  • Property: Setting out a comprehensive definition of “property” which will cover intangible and incorporeal property and virtual currency; 
  • Valuable security: Extending the definition of “valuable security” to include electronic records; and 
  • Deception of corporate entity: Clarifying that a corporate entity is capable of being deceived or induced to act in a certain manner for the purposes of the offence of cheating, even if none of its individual officers, employees or agents is personally deceived or induced to act in such manner. 

Obtaining services fraudulently

The Bill also introduces a new offence of obtaining services fraudulently. Under the Bill, it will be an offence to fraudulently or dishonestly obtain a service knowing that it is being made available on a for-payment basis, but not intending that full payment be made. This new offence will catch factual situations where the services fraudulently obtained do not fall within the definition of “property” or where there is no false representation made at the time the services are obtained.

Transnational offences

The Bill clarifies which fact elements must occur in Singapore for the Singapore courts to have jurisdiction over certain offences. To this end, a new Schedule in the Penal Code will specify offences (consisting mainly of important property and white-collar offences) under which the Singapore courts will have jurisdiction where:

  • any physical element of the offence that takes the form of a relevant act occurs in Singapore; or 
  • a fault element of the offence is to make a gain or cause a loss or exposure to a risk of loss or cause harm to any person in body, mind, reputation or property, and that gain, loss or harm occurs in Singapore.

Reference materials

The following materials are available on the Singapore Parliament website www.parliament.gov.sg and MHA website www.mha.gov.sg:

 

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