Statute Details
- Title: Competition (Financial Penalties) Order 2007
- Act Code: CA2004-S372-2007
- Type: Subsidiary Legislation (SL)
- Authorising Act: Competition Act (Cap. 50B)
- Enacting power: Made under section 69(4) of the Competition Act
- Citation: S 372/2007
- Commencement: 11 July 2007
- Current version status: Current version as at 27 March 2026
- Key provisions: Sections 1–5 and the Schedule (Applicable turnover)
- Most relevant sections for practitioners:
- Section 2: Definitions (including “applicable turnover” and “financial penalty”)
- Section 3: How turnover is determined for calculating financial penalties under section 69(4) of the Act
- Section 4: Instalment payment arrangements (post-19 April 2010)
- Section 5: Interest on late payment (post-19 April 2010, with transitional rule)
- Amendment noted in extract: Amended by S 219/2010 with effect from 19 April 2010
What Is This Legislation About?
The Competition (Financial Penalties) Order 2007 (“the Order”) is subsidiary legislation made under the Competition Act (Cap. 50B). Its core function is to provide the mechanics for calculating and administering financial penalties imposed by the Competition and Consumer Commission of Singapore (“the Commission”) under the Competition Act.
In plain terms, when the Commission decides to impose a financial penalty on an undertaking for contraventions under the Competition Act, the amount is tied to a measure of the undertaking’s turnover. The Order specifies (i) what turnover counts, (ii) which business year is used, and (iii) how the penalty is handled if payment is allowed in instalments and if payment is late.
Although the Order is relatively short, it is highly practical. For competition-law practitioners, it directly affects the quantum of penalties (through the turnover determination) and the payment and cost consequences (through instalments and interest). It also contains a transitional rule for interest, which matters when penalties were imposed before the 2010 amendments.
What Are the Key Provisions?
Section 1 (Citation and commencement) confirms that the Order may be cited as the Competition (Financial Penalties) Order 2007 and that it came into operation on 11 July 2007. While this seems administrative, commencement dates can matter in disputes about whether particular payment rules apply to penalties imposed at different times.
Section 2 (Definitions) sets the vocabulary used throughout the Order. Two definitions are especially important:
- “applicable turnover”: This is the turnover of an undertaking for a “business year” determined in accordance with the Schedule. The definition also addresses the case where the business year does not equal 12 months by using a proportional adjustment (i.e., scaling the turnover to a 12-month equivalent).
- “business year”: A period of more than 6 months in respect of which an undertaking publishes accounts or, if no such accounts have been published, prepares accounts. This definition was amended with effect from 19 April 2010 (as indicated by the extract).
- “financial penalty”: A financial penalty imposed by the Commission under section 69(2)(d) of the Competition Act. This anchors the Order to the specific penalty power in the Act.
Section 3 (Determination of turnover for calculation of financial penalties) is the heart of the Order. It provides the rule for selecting the turnover figure used to compute the penalty:
- General rule (Section 3(1)): The turnover for the purposes of section 69(4) of the Act is the applicable turnover for the business year preceding the date on which the Commission’s decision is taken. This means the relevant turnover is not necessarily the year preceding the alleged conduct, nor the year of the investigation, but the year preceding the Commission’s decision date.
- If figures are not available: If figures are not available for that preceding business year, the turnover for the business year immediately preceding it is used.
- No preceding business year (Section 3(2)): Where there is no preceding business year for the application of sub-paragraph (1), the applicable turnover is the turnover for that period.
For practitioners, these rules are significant because they can affect the penalty base in a predictable way: the turnover used is tied to the Commission’s decision date and to the availability of accounts. In practice, parties often need to identify the relevant “business year” and ensure that the turnover figures are properly sourced and adjusted (including proportional scaling where the business year is not 12 months).
Section 4 (Payment of financial penalty by instalments) addresses a procedural relief: the Commission may allow a person on whom a financial penalty has been imposed to pay by instalments. The extract indicates that this provision applies to instalment permissions on or after 19 April 2010. If instalments are allowed, the amount of each instalment is calculated using a formula based on:
- A: the duration of the instalment plan in years (or a fraction of a year);
- B: the total amount of the financial penalty imposed; and
- C: the number of instalments allowed.
While the extract does not display the full algebraic expression (it appears as a placeholder “where — A is … B is … C is …”), the legal point is clear: the Order provides a statutory calculation method for instalment amounts rather than leaving it entirely to discretion. This reduces uncertainty and can be used to verify whether instalment schedules are computed correctly.
Section 5 (Interest on late payment of financial penalty) creates a financial consequence for non-payment. The Commission can require interest where the penalty (or an instalment) is not paid by the due date:
- Interest rate and basis (Section 5(1)): Interest is calculated on a monthly basis at a rate of 6% per annum (as stated: “at the rate of 6% for so long as such outstanding amount … remains unpaid”).
- Part-month rule (Section 5(2)): Any part of a month during which an outstanding amount remains unpaid is treated as a full month. This is a strict rule that can increase the interest exposure in practice.
- Transitional rule (Section 5(3)): For financial penalties imposed before 19 April 2010, interest is payable under Section 5(1) only as from 19 April 2010, and only on the amount outstanding on or after that date.
For counsel advising on enforcement risk, Section 5 is crucial. It means that even where instalments are permitted, failure to meet instalment due dates triggers interest. It also means that for older penalties, interest is not retroactively applied before the amendment date; instead, it applies prospectively from 19 April 2010 to the outstanding balance.
The Schedule (Applicable turnover) is referenced in the definition of “applicable turnover”. Although the extract does not reproduce the Schedule’s detailed text, the Schedule is legally important because it operationalises how turnover is determined for the purposes of the Order. In practice, the Schedule typically addresses what constitutes turnover, how to treat intra-group transactions, and how to handle accounting conventions. Practitioners should treat the Schedule as integral to the turnover base and not as a mere appendix.
How Is This Legislation Structured?
The Order is structured in a straightforward way:
- Enacting Formula: Confirms the Minister’s power under section 69(4) of the Competition Act.
- Section 1: Citation and commencement.
- Section 2: Definitions, including “applicable turnover”, “business year”, and “financial penalty”.
- Section 3: Turnover determination rules for calculating financial penalties (including fallback rules where figures are unavailable).
- Section 4: Instalment payment mechanism and instalment calculation method (post-19 April 2010).
- Section 5: Interest on late payment, including monthly calculation and transitional treatment for penalties imposed before 19 April 2010.
- The Schedule: Sets out the detailed meaning of “applicable turnover”.
Who Does This Legislation Apply To?
The Order applies to persons on whom the Commission imposes a financial penalty under the Competition Act. This includes undertakings and potentially other entities within the scope of the Act’s penalty provisions, depending on how the Commission’s decision is framed under section 69.
It also affects any party seeking to manage the financial consequences of a penalty: those requesting instalments (where permitted by the Commission) and those at risk of late payment. The instalment and interest provisions have temporal scope: instalment calculations under Section 4 and interest rules under Section 5 are linked to the 19 April 2010 amendment date, with a transitional rule for interest on earlier penalties.
Why Is This Legislation Important?
Although the Order is short, it has direct consequences for competition enforcement. First, it determines the turnover base used to calculate financial penalties. Because turnover is often the anchor for penalty quantification, disputes about the relevant business year, the availability of accounts, or the proportional adjustment for non-12-month business years can materially affect the penalty amount.
Second, it governs payment administration. Instalments can reduce immediate cash-flow impact, but Section 4’s formula-based approach means parties should verify that instalment amounts are computed correctly. Section 5’s interest regime adds a clear economic incentive to pay on time and increases the cost of delay. The “part of a month counts as a full month” rule is particularly important in practice, as it can make interest accrue faster than parties expect.
Finally, the transitional provisions reduce uncertainty and help counsel assess exposure for penalties imposed around the amendment date. For penalties imposed before 19 April 2010, interest is not applied retroactively; it applies only from that date to the outstanding balance. This can be critical when advising on settlement, payment plans, or enforcement actions after the amendment.
Related Legislation
- Competition Act (Cap. 50B) — particularly section 69 (financial penalties and the Commission’s powers)
- Competition (Financial Penalties) Order 2007 — amendments by S 219/2010 (effective 19 April 2010)
- Competition Act legislation timeline (for version control and amendment history)
Source Documents
This article provides an overview of the Competition (Financial Penalties) Order 2007 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.