ASEAN KEY DESTINATIONS
Anti-competition, anti-bribery laws to strengthen
The cost of perceived non-compliance with competition and bribery laws in Asia is set to rise as regulators in the region adopt a more hawkish stance.
Analysts expect more cases like the anti-competition fine imposed on Temasek in Indonesia.
And going forward, such regulatory action could hold much bigger implications for the companies seen to be infringing the law.
Temasek recently paid a fine of US$1.7 million to Indonesian authorities after Indonesia's anti-competition commission KPPU charged it with anti-competitive behaviour in the country.
Although Temasek claimed no wrongdoing and appealed, the Indonesian supreme court upheld the ruling.
It was a small fine, but experts said it shows authorities in the region want to be seen as tough-minded enforcers.
Ken Chia, a Partner at Baker & McKenzie (Singapore), said: "They're obviously trying to establish themselves as a commission, making ground breaking decisions and setting precedent in the market. I think that will increase with time. Indonesians are very creative, innovative in the way they apply the law, and this is not going to be the end of it, I'm sure we'll see a lot more."
Checking anti-competitive practices is not the only area where authorities are looking to make their mark. Tolerance is also waning for bribery and corruption, once widely accepted as a means of doing business in Asia.
With new laws, such as the UK's anti-bribery act, set to come into force this year, Asian authorities don't want to be left behind.
Martin Commons, Special Counsel, Baker & McKenzie (Beijing), said: "From the US and UK and European perspective, if Asian laws are not being seen to do the job then what you're going to see is essentially those countries coming in and doing the job for Asia. So we already see cases where Asian companies are getting into trouble thousands of miles away from where illegal conduct is taking place and I don't see that changing."
With the establishment of the Asean community in 2015, more businesses will have a regional footprint.
That, according to law firm Baker & McKenzie, will make it even more essential for companies to be mindful of the regulatory pitfalls.
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