Australia AG proposes tighter anti-bribery laws and DPAs
By Mark Pulvirenti and John Bray
There have been only two foreign bribery prosecutions in Australia -- one involving banknote printing companies Securency and Note Printing Australia, and another involving the construction company Lifese.
Why so little enforcement activity?
One reason is the current wording of Australia’s Criminal Code Act, which makes it hard to bring cases that will stand up in court. For example, it may be hard to prove beyond a reasonable doubt that certain payments -- such as fees to agents -- are not "legitimately due," even though experience shows that bribes paid via commercial agents are one of the most common forms of international corruption. To address those problems, the Attorney General’s Department is preparing new legislation to revise the wording of the Criminal Code Act.
In April, the Attorney General’s Department issued a consultation paper on the proposed changes. These include:
- The replacement of the phrase "not legitimately due" with the concept of "improperly influencing" an official. It will be easier for prosecutors to demonstrate ‘improper influence’ in the courts.
- The creation of a new foreign bribery offense based on the fault element of "recklessness." The concept of recklessness is defined in another section of the Criminal Code Act and refers to circumstances where a person is aware of a substantial risk of conduct that -- in this case -- would lead to improper influence on a foreign official.
- The creation of a new corporate offense of failing to prevent foreign bribery. This would be similar to Article 7 in the UK Bribery Act. A company would be automatically liable for bribery by employees unless it can show that it had a proper compliance system to prevent them committing the offense.
- The Attorney General’s Department will submit the proposed amendments to parliament most likey in early 2018.
If these proposals are passed into law, it will be much easier to bring successful foreign bribery cases to court. However, the legislation is unlikely to be retrospective and therefore will not apply to existing investigations. Also, in line with U.S. and UK practice, there will be greater emphasis on corporate culture and on compliance programmes to prevent bribery, rather than responding to problems retrospectively.
Meanwhile, the Attorney General’s Department is crafting a separate piece of legislation to establish a scheme of Deferred Prosecution Agreements (DPAs) in relation to bribery and other serious corporate crimes. This too will be submitted to parliament in coming months.
The Department’s consultation paper released in March outlines an approach is broadly similar to the United States and UK. In certain circumstances, prosecutors would be able to negotiate an agreement with companies that face investigation for corporate crimes.
To be eligible for a DPA, the company would be required to:
- Co-operate with any investigation
- Admit to an agreed set of facts concerning the offense
- Pay a financial penalty, possibly including disgorgement of the profits from the offense, and
- Implement an enhanced program to ensure future compliance, possibly under the supervision of an independent monitor.
- Companies that meet these requirements will not be prosecuted, provided that they avoid further offenses within a specified time period. However, prosecutors will offer a DPA only in cases where the company co-operates fully and where a negotiated agreement will be in the public interest.
- While the legislation is still pending, and some details remain to be decided, the direction of Australian policy is clear. Compared with their UK and U.S. counterparts, Australian companies may in the past have felt entitled to a degree of complacency on the need for tight anti-corruption compliance. This is no longer the case.
Mark Pulvirenti is a Control Risks Partner based in Sydney. He leads Control Risks’ Compliance, Forensics and Intelligence practice for the Australia Pacific region. He will be testifying at a hearing of the Senate Economics References Committee on August 7.
John Bray is a Director at Control Risks’ Singapore office.
This article was first published in The FCPA Blog on 8 August 2017.