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Australia proposes robust new foreign bribery laws

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Jason Gray

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11 December 2019

On Monday 2 December, the Australian Government introduced into the Senate the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 (Cth) (“Foreign Bribery Bill”). This Bill proposes to fundamentally shift the criminal liability landscape for corporations with respect to foreign bribery
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The Bill follows on from the Australian Government’s introduction of the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 (Cth) (the “2017 Bill”) two years ago, which had been allowed to lapse at the end of the previous Parliamentary session, ahead of the 2019 Australian federal election.

Like the 2017 Bill, the Foreign Bribery Bill proposes the following fundamental changes:

1. creating a new criminal offence of bribery by an associate, for which a corporation may be convicted unless it has in place “adequate procedures” designed to prevent that conduct (“Failure to Prevent Bribery Offence”), which is punishable by a fine that is the greater of:
a. AUD21 million;
b. three times the value of the benefit provided; and
c. 10% of the corporation’s annual turnover;

2. amending the offence of foreign bribery; and

3. introducing a Deferred Prosecution Agreement (“DPA”) regime.

The Foreign Bribery Bill goes further than the 2017 Bill by:

1. amending the offence of foreign bribery to specify that it covers persons providing a benefit with the intention of obtaining a “business or personal advantage”; and

2. amending the definition of “dishonest” in the Criminal Code to remove the requirement that the prosecution prove the defendant knew that they were being dishonest.

The Government has also released new principles-based guidance in respect of what it may constitute “adequate procedures” for the Failure to Prevent Bribery Offence.

The Government’s strengthening of this Bill reflects the flurry of legislative activity and political commentary regarding corporate criminality in the aftermath of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. This includes the Government’s implementation of stronger whistleblower protection laws and the Australian Law Reform Commission’s ongoing review of the corporate criminal liability regime.

This article provides an overview of the Foreign Bribery Bill’s impact on businesses in relation to:

  • the proposed Failure to Prevent Bribery Offence;
  • the “adequate procedures” defence to this new offence;
  • the proposed amendments to the offence of foreign bribery;
  • the amended definition of “dishonest” in the Criminal Code; and
  • DPAs.

Businesses should pay close attention to the progress of this Bill and ensure that they have in place compliance policies that meet its “adequate procedures” test before its provisions come into effect, given the significant penalties that may apply. The Bill provides that its foreign bribery provisions would come into effect six months after it is passed by both houses of Parliament and receives Royal Assent.