The 11th Regional Conference of the Anti-Corruption Initiative for the Asia Pacific was held in 2023 under the theme, "From Pandemic to Recovery: Building Resilient Economies through Transparency, Integrity and Trust". This regional conference brought together policymakers, prosecutors, investigators, law enforcers, the private sector, and civil society of member countries for the sole purpose of sharpening the policies and regulatory compliance issues for fighting corruption and promoting transparency, integrity, and trust to build stronger economies in the APAC region. Post-pandemic, initiatives have been taken by organizations globally to revitalize economies by completely opening up to international trade. Serious efforts have been made to diversify the patterns in the supply chain across all the developing markets like Malaysia, Indonesia, Vietnam, India, and a few other countries in the APAC region. With rapid increases in business operations, regulatory compliance and corruption risks are also being seen to be in ascending order. Lawyers opine that all organizations must be vigilant about the compliance risks that can take place considering the diversified business landscape of the continent, and conduct timely regulatory risk assessments to decide on appropriate measures addressing the issues within their specific jurisdictions and stay in the good books of Asian regulatory authorities.
"Every jurisdiction in Southeast Asia has its own distinct anti-bribery and anti-corruption law regime. There is no shortage of recommended best practices for effective anti-bribery compliance programs from enforcement agencies, NGOs, and multilateral bodies. The challenge for companies operating in Southeast Asia is effectively localizing these global best practices", said Nathan Bush, Partner, DLA Piper.
In order to gain more information regarding the emerging regulatory compliance risks in Asian markets, one needs to delve deeper into the factors that pose a threat to ethical and legalized business operations.
Data Protection and Privacy
With rising complexities in digitization and cyber threats, Southeast Asian countries have rolled out laws and guidelines for the prevention of cyber attacks. However, owing to the varied compliance requirements across different jurisdictions, it has somehow become burdensome for businesses to abide by those in a systematic manner. In this regard, the in-house counsels of any organization play a vital role in understanding the compliance issues and legal requisites and suggest the management on the best practices that need to be followed. In the ASEAN region, several countries have enacted specific laws and compliance regulations for protection of personal data and prevent organizations from cyber-attacks.
One notable example in this regard is Indonesia. The country has passed its first Personal Data Protection Law in September, 2022. It came into being years after discussion and postponements. With close relations to European Union's GDPR, the new law initiated by the Indonesian government clearly illustrates the legal basis for processing and obtaining of personal data. Strict administrative and criminal sanctions are incorporated under this law for those who go against it and also include corporate penalization that may be up to two percent of an organization's annual revenue.
Regulations for Bribery and Corruption
The business landscape in Asia is increasing rapidly post pandemic and at the same time bribery, fraud and regulatory risks are also increasing. There is dire need to be vigilant about these aspects now more than ever, especially in the APAC region. With all the pandemic related travel restrictions lifted, business conditions are becoming more and more favourable and all want to reach the pre-pandemic levels of production and distribution along with import/export activities and standardise the overall economic output. It has now become evident that as business activities move in the ascending order, the regulatory authorities in Asian countries are laying down laws and guidelines addressing the increasing risks of fraud, bribery and corruption.
In order to manage these risks, organizations must set definite perspectives regarding these issues with respect to the business ecosystem in the APAC region and prepare their expansion plans in accordance with that. Precise observations must be made with regards to the instances that have already taken place in the Asian markets in the areas of fraud, bribery and corruption over the past decade.
"We all recognize the world has changed in the past three years. In traditionally higher-risk markets such as APAC, those changes are even more pronounced. That will lead to greater regulatory attention as business activity accelerates and companies try to patch internal controls and compliance efforts with growth targets in a different landscape", mentioned Alex Koltsov, Managing Director, Grant Thornton LLP
Protection of IP Rights
In February 2023, the reported the number of patent co-operation treaty filings in 2022 by World Intellectual Property Organisation reached 278,100 which has been the highest until now. Asia countries have emerged as some of the dominant contributors to international patents which is 54.7% of the total number of applications. However, the existing laws on intellectual property are capable of protecting artists from possible copyright infringements and various other IP-related threats that have come into the picture with the rise of generative artificial intelligence.
Apart from the issues discussed, various other regulatory compliance risks must be mitigated by businesses operating in Asian countries in terms of labour and employment laws, environmental regulations, political and geopolitical risks, financial compliance and reporting, health and safety and last but not the least consumer protection laws.