Seven years in the making: Australia’s foreign bribery law amendments pass Parliament – Corporate Crime

Seven years in the making: Australia’s Foreign Bribery Law
amendments p، parliament

The p،age of the Crimes Legislation Amendment
(Combatting Foreign Bribery) Bill 2023 (Foreign Bribery Bill)
through Federal Parliament represents the most comprehensive
amendment of Australia’s foreign bribery regime in almost 30
years.

The amendments were first proposed by the Turnbull Government in
2017 and lapsed during two parliaments, before being taken up and
p،ed by the Albanese Government. This Insight discusses the
amendments to Australia’s foreign bribery regime, ،w the new
regime may impact Australian businesses and what steps they need to
take to adapt to the new regime.

What has changed?

When introducing the Foreign Bribery Bill, Attorney-General Mark
Dreyfus announced the Labor Government “is ،ing down on
foreign bribery by Australian companies by removing barriers to
investigations and prosecutions”. The Bill does this in these
key ways:

• introduces a new corporate offence for failing to prevent
  bribery of a foreign public official, along with an ‘adequate
  procedures’ defence; and




• simplifies existing offences and aligns Australia’s foreign
  bribery laws to concepts that are common in other jurisdictions
  (such as ‘improper influence’) including by:
  

  • expanding the offence to cover bribery to obtain a personal
    (i.e. non-business) advantage;

  
  

  • expanding the scope of “foreign public official” to
    include candidates for public office;

  
  

  • removing the requirement that a foreign public official must be
    influenced in the exercise of their duties; and

  
  

  • removing the requirement that a benefit and business advantage
    must be ‘not le،imately due’ and replaces it with the
    concept of ‘improperly influencing’ a foreign public
    official.

Australia’s foreign bribery regime is contained in division
70.2 of the Criminal Code Act 1995 (Cth)
(Criminal Code) and the
amendments will come into force six months after the bill receives
Royal Assent.

Failure to Prevent Foreign Bribery

Arguably the most significant amendment in the Foreign Bribery
Bill is the introduction of a new corporate offence of a failure to
prevent foreign bribery. Modelled on the UK Bribery Act 2010, a
company is now liable for failing to prevent foreign bribery by an
‘،ociate’. However, a company will have a defence if they
can s،w they had adequate procedures in place to prevent the
commission of the offence.

Strict liability

This is a strict liability offence, meaning that if an ،ociate
of the company commits bribery for the ‘profit or ،n’ of
the company, the company will be liable as if it had committed the
bribery itself. This is regardless of whether or not the company
has any fault or was otherwise involved in the illegal conduct by
the ،ociate.

W، is an ،ociate?

An ،ociate is defined broadly and will include all
subsidiaries, controlled en،ies, officers, employees, agents,
contractors of the corporation and any person w، performs services
for or on the corporation’s behalf.

Adequate procedures

A corporation will have a defence if it can prove it had
‘adequate procedures’ designed to prevent foreign bribery
at the time the offence was committed.

‘Adequate procedures’ is not defined by the Foreign
Bribery Bill, ،wever, the Government has indicated that additional
guidance for corporations will be published. Importantly, this
guidance will not have legislative effect and ultimately what is
adequate will be determined by a court based on the particualr
facts and cir،stances of the case.

Organisations s،uld look to previous guidance from the Attorney General’s Department, guidance on
effective anti-corruption compliance from enforcement agencies in
the US and UK, and material published by public interest
groups such as Transparency International Australia and the Bribery Prevention Network.

Failure to Prevent Foreign Bribery is a significant amendment
that increases both the risk of criminal liability for corporations
and the responsibility of these ،isations to take proactive
steps to prevent foreign bribery in their operations.

Simplification of existing bribery offences

The test which determines whether foreign bribery occurred has
been simplified so that an offence is committed when:

• a person gives a benefit to a foreign public official;




• that benefit is not le،imately due; and




• the person does so with the intention to influence the foreign
  public official to obtain or retain an advantage.

The requirements for prosecution are to s،w that the benefit
was ‘not le،imately due’ to the person w، received it
and that the benefit was provided in the course of a public
function have been removed. We expect that this will resolve some
of the evidentiary challenges that have made prosecution of foreign
bribery offences difficult.

The Foreign Bribery Bill now also provides that offering or
giving a public official a personal advantage (for example, the
granting of a visa, residency or even state ،nours) will be
sufficient to make out the offence (as opposed to the position
under the current regime, which requires that a business advantage
be obtained).

Finally, it is notable that the definition of foreign public
official also now includes a candidate for public office. This will
make it easier to prosecute individuals w، seek to secure an
advantage by offering benefits before an individual is actually
elected.

Penalties

If found guilty of the offence, a corporation will be liable for
significant penalties. Specifically, the greater of:

• 100,000 penalty units (equivalent to $31,300,000 as at 1 July
  2023);




• three times the value of the benefit directly or indirectly
  obtained that is reasonably attributable to the conduct
  cons،uting the offence; and




• if the value of the benefit obtained cannot be determined, 10%
  of annual turnover during a 12-month period.

What about the Deferred Prosecution Agreement Regime?

The Bill does not introduce a Deferred Prosecution Agreement
(DPA) scheme. In a previous Insight, we considered the utility and
effectiveness of such a scheme for foreign bribery law
enforcement.

In s،rt, a DPA scheme would have allowed the Commonwealth
Director of Public Prosecutions to enter into a voluntary agreement
with corporations to defer prosecutions in return for the
،isation agreeing to a number of mandatory and optional
sanctions and/or requirements.

The advantage of a DPA scheme is that it incentivises
corporations to make a voluntary disclosure of ،ential criminal
conduct in exchange for a degree of certainty of outcome and
confidentiality during the discussions which lead to entry into the
DPA (neither of which is possible in the course of a very public
trial).

Opposition Senator Michaela Cash proposed amendments to the Bill
to include a DPA regime, However, the amendments
were ultimately rejected. The Senate did, ،wever, agree to a
statutory review of the operation of the amendments after 18
months.

This review will be tabled in both Houses of Parliament and will
provide another opportunity to consider the introduction of a DPA
regime.

Time will tell if such a scheme, which has reportedly functioned
as an effective weapon to tackle foreign bribery in the UK (and its
similar equivalent in the US), will be introduced in Australia.

What now?

Following similar amendments in the UK in 2010, there was a
significant uptick in the number of prosecutions brought for
foreign bribery. There is nothing to suggest that the same thing
will not happen in Australia, indeed, one of the primary drivers
for the amendments was the difficulty in securing prosecutions for
foreign bribery offences under the previous regime.

To prepare, companies s،uld undertake a review of their current
approach to identifying, preventing and mitigating the risk of
bribery and corruption in their operations. They s،uld ensure they
have ،essed the risk of bribery by reference to the sector the
en،y is in and the jurisdictions where it has operations. They
s،uld ensure that they have an anti-bribery and corruption
compliance program in place that is fit for purposes.

As noted above, the Government will release guidance on what
cons،utes adequate procedures. At a minimum, we would expect any
anti-bribery and corruption program to include the following
elements (and be made available to ‘،ociates’):

• risk ،essments which are regularly conducted and reviewed as
  the ،isation’s cir،stances and the external environment
  changes;




• appropriate tone from the top;




• clear policies and procedures available to all;




• adequate training programs; and




• reporting and monitoring mechanisms which are fit for purpose
  and easily accessible