Australia: Government toughens up on foreign bribery enforcement
In September the Commonwealth Government announced the establishment of a Perth-based specialised fraud and anti-corruption team that will focus on foreign bribery investigations. Justice Minister Michael Keenan has confirmed that similar teams will be set up in Melbourne and Sydney. These developments put into action a AUD 15 million Government strategy announced in April to tackle complex fraud, foreign bribery and corruption cases. They are the most significant indications to date that Australian companies will face increased enforcement of foreign bribery laws.
The OECD and Transparency International have long criticised Australia's enforcement of foreign bribery laws. The lack of enforcement action has attracted significant media and political attention.
In 2015 the Australian Senate announced an inquiry into foreign bribery with a view to strengthening the country's foreign bribery laws. Similarly, in March 2016, the Attorney-General's Department released a public consultation paper on the introduction of Deferred Prosecution Agreements (DPAs) for serious corporate crimes. DPAs involve a prosecutor agreeing not to prosecute a company in exchange for compliance with certain conditions (normally the company paying a fine, disgorging its ill-gotten profits, implementing internal remediation, and agreeing to cooperate with the Government's investigation). They are commonly used by U.S. prosecutors when resolving U.S. Foreign Corrupt Practices Act (FCPA) cases, and were recently introduced in the United Kingdom as an additional tool to be used in the context of UK Bribery Act prosecutions.
The Government also expanded its legislative toolkit for prosecuting foreign bribery when it introduced new false accounting offences in March 2016. However, whilst these developments were generally welcomed, there remained questions regarding whether the Australian Federal Police (AFP) had the required resources and funding to investigate complex foreign bribery cases. The Government's April strategy, of which the Perth team forms a part, goes some way towards answering those questions.
How does it affect you?
The new teams are a significant indication that the Government is serious about targeting overseas corruption. The Government has long talked a tough game on foreign bribery, but that rhetoric is now being matched with concrete investment.
Whilst it remains to be seen if the additional resources will lead to more prosecutions, there will certainly be an increase in the number of foreign bribery investigations. For Australian firms operating in industries and jurisdictions with a high risk of bribery and corruption, it is an opportune time to get ahead of the regulatory curve by asking the following questions:
How strong is our institution's formal compliance programme and culture?
Do we understand the risks our business faces in overseas markets?
Are there any instances of improper conduct within our business already? If so, how are we managing and responding to these?
This case summary is part of the Allen & Overy Legal & Regulatory Risk Note, a quarterly publication. For more information please contact Karen Birch firstname.lastname@example.org, or tel +44 20 3088 3710.