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Regulators and reforms: how Australia tackled white collar crime in 2023 and what to expect in 2024

Regulators and enforcement authorities in Australia intensified their efforts to curb white-collar crime in 2023. They targeted fraud, money laundering, tax evasion, cybercrime, and corruption across multiple industries, including the financial services and consulting sectors. These enforcement efforts have been, and will continue to be, bolstered by the introduction of key amendments to legislation.

Investigations trends and developments

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), remains one of the country’s most active enforcement agencies despite moving away from its former “why not litigate” approach. Its enforcement activity included high-profile civil penalty proceedings commenced against superannuation trustees and fund managers in relation to misconduct and greenwashing claims.

Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), also increased its activity following the appointment of its new Chair, Gina Cass-Gottlieb, in 2022. This included widely publicising its review of businesses’ greenwashing claims. Against the backdrop of several unsuccessful prosecutions over the past few years, the ACCC secured guilty pleas and sentences in several criminal prosecutions for cartel conduct. The ACCC commenced numerous enforcement proceedings in the courts, and recommended that it be granted new powers to regulate digital platforms such as Amazon, Apple, Meta, and Google. In December 2023, the Australian Government indicated that it supported the ACCC’s recommendations in principle, and that it would consult on the development of a new digital competition regime.

The Australian Transaction Reports and Analysis Centre’s (AUSTRAC) civil penalty proceedings targeting the gaming sector continued this year. Its proceedings against Crown Casino resolved, with Crown ordered to pay a penalty of AUD450 million for breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act). Its proceedings against Star Casino remain ongoing.

Law reforms impacting corporate criminal liability

National Anti-Corruption Commission

The establishment of the National Anti-Corruption Commission was a key election commitment of Australia’s new Labor government, and it commenced operation on 1 July 2023. It has far-reaching powers to investigate and conduct inquiries into serious or systemic corruption issues, and report on those issues or refer them to the Commonwealth Director of Public Prosecutions. Within five months of operation, it had already received 2152 referrals and opened eight investigations. Significant legal and reputational consequences can be expected to begin flowing as the National Anti-Corruption Commission assesses these referrals and finalises its investigations.

Foreign bribery

The Australian Government has revived proposed amendments to the Criminal Code Act 1995 (Cth) to strengthen Australia’s foreign bribery laws.1The amendments introduce a new offence for corporates that fail to prevent foreign bribery unless they can establish that they had adequate preventative procedures in place. However, unlike previous iterations of the proposed amendments, the Australian Government is no longer proposing to include a Deferred Prosecution Agreement scheme. Corporates should review their foreign bribery risk and compliance measures in anticipation of these proposed amendments.

Financial Accountability Regime

In September 2023, legislation was passed establishing the Financial Accountability Regime (FAR), replacing the existing Banking Executive Accountability Regime (BEAR) which applied only to authorised deposit holding institutions.2 FAR extends the provisions of BEAR to all general, life, and private health insurers, registered superannuation licensees, and their senior executives. The FAR will begin to take effect in March 2024. Its purpose is to address misconduct in the financial services sector, upon a recommendation of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. Affected corporates will need to review their frameworks and processes to ensure that they meet the obligations and expectations of the FAR.

Internal investigations – key considerations

A key focus continues to be corporates’ ability to claim legal professional privilege over investigative reports.

In a recent decision of the Federal Court of Australia, Robertson v Singtel Optus Pty Ltd [2023] FCA 1392, the Court found that an investigative report commissioned by Optus’ legal advisors following a data breach was not protected by legal professional privilege on the basis that the report’s dominant purpose was to assist management in identifying the causes of, and remediating, the data breach as opposed to providing legal advice.

From the outset and throughout the course of an investigation, corporates should work with external counsel to consider the best way to structure an investigation, and what public statements about an investigation can be made. 

Sectors targeted by law reforms or enforcement action

ASIC’s enforcement priorities for 2024 include:

  • enforcement action targeting poor distribution of financial products
  • misleading conduct in relation to sustainable finance, including greenwashing
  • member services failures and misconduct in the superannuation sector
  • insurance claims handling
  • enforcement action targeting gatekeepers (auditors, registered liquidators and financial services, and credit licensees) that facilitate misconduct
  • technology and operational resilience for market operators and market participants.

The ACCC has also announced enforcement priorities for 2024 to include the following:

  • environmental claims and sustainability
  • manipulative or deceptive advertising in the digital economy and on digital platforms
  • unfair contract terms.

AUSTRAC’s priorities for the year ahead include increased regulatory activity over digital currency exchanges, payment platforms, the bullion sector, and non-bank lenders and financiers.

The Australian Government has launched a taskforce to review the adequacy of Australia’s competition laws, so further reforms can be expected on the horizon. In addition, the Australian Government is currently considering the results of its public consultation into expanding Australia’s AML/CTF regime and is widely expected to introduce legislative amendments in the near future. Referred to as the “Tranche 2” reforms, these amendments are expected to extend AML/CTF regulations to non-financial professions, including lawyers and real estate agents. 

Cross-border coordinated investigation or enforcement activity

In 2023, the Australian Federal Police noted that more than 20 foreign bribery investigations were in progress. One notable example of cross-border enforcement activity in Australia included the Commonwealth Director of Public Prosecutions successfully appealing a penalty against an Australian engineering consultancy firm following a guilty plea for bribing officials in Vietnam and the Philippines to obtain construction contracts. The effect of that High Court of Australia decision is to increase the maximum penalty that can be imposed for white-collar crimes.

Australia’s regulators and law enforcement bodies continue to cooperate, share information, and jointly conduct investigations with their counterparts overseas, though few significant cross-border investigations were made public in the past year. 

Predictions for 2024

Environment, social, and governance issues: Greenwashing will remain a key regulatory risk for corporates. After a year of issuing infringement notices, ASIC has more recently begun commencing civil penalty proceedings against companies in relation to greenwashing. Similarly, the ACCC has flagged that it will take further action against greenwashing, and has released draft guidance to improve the integrity of corporates’ environment and sustainability claims.

Modern slavery: Increased attention on modern slavery reporting may also feature in 2024 following a statutory review into the Modern Slavery Act 2018 (Cth),3 which recommended among other things, lowering the revenue threshold for mandatory reporting from AUD100 million to AUD50 million. The Australian Government has also introduced proposed legislation to establish an Anti-Slavery Commissioner, whose function would include promoting compliance with modern anti-slavery requirements and supporting businesses to address modern slavery risks in their supply chains.4

Privacy and data protection: Privacy and data protection will be a key concern for in-house legal teams, given recent prominent data breaches and resulting class actions. The Australian Information Commissioner has also recently taken the rare step of commencing civil penalty proceedings, in this case against Australian Clinical Labs Ltd, following a data breach in its pathology business. The Australian Government has also announced its intention to introduce legislation in the course of 2024 to increase the scope of the Privacy Act 1988 (Cth) and introduce additional penalty provisions. 

Looking further ahead – on the horizon

It is clear that cybersecurity and data protection will remain a focus long-term as technology continues to advance, and reliance on that technology grows. With promises in place to introduce new legislation to increase protections on personal data, in-house legal teams should continue to pay close attention to technology and operational resilience.

Increased regulatory scrutiny is also expected in relation to climate target reporting, with the Australian Government in the process of implementing mandatory disclosure requirements. The current proposal is for large entities to begin reporting from 1 July 2024 but, with details yet to be finalised, in-house legal teams should continue to watch this space.

This article is part of our Cross-Border White Collar Crime and Investigations Review. Please click here for our overviews and insights in other jurisdictions.

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1. Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 (Cth).
2. Financial Accountability Regime Act 2023 (Cth).

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