Recently introduced legislation reinforces the message that Australian regulators are intensifying their foreign bribery investigations and planning to increase prosecutions in coming years.
The new laws, introduced to Parliament in late 2015, will:
- create a new false accounting offence; and
- clarify the elements that need to be proved in a foreign bribery claim.
The changes are a direct response to the recommendations made by the OECD in its recent report card into Australia’s enforcement of bribery laws and ensure that Australia satisfies its obligations under the OECD Foreign Bribery Convention. These laws demonstrate that Australia is taking the OECD’s recommendations seriously and the government appears to be intent to disprove international opinion that Australia rarely prosecutes foreign bribery offences.
The amendments send a strong message to Australian companies: scrutinise your policies and systems to prevent foreign bribery and ensure that they will protect you from prosecution.
A new offence for false accounting
Under the Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Bill 2015 (Cth) it is proposed that companies and individuals engaging in false accounting practices for the purpose of concealing or enabling bribes will be able to be prosecuted in Australia.
A person will be guilty of this offence where:
(a) the person (whether an individual or a company)
(i) makes, alters, destroys or conceals an accounting document; or
(ii) fails to make or alter an accounting document where they were under a duty to do so, and
(i) the person’s intention is that the conduct would conceal or disguise the receiving or giving of a bribe; or
(ii) the person is reckless as to whether the conduct would conceal or disguise the receiving or giving of a bribe.
In establishing the offence, the prosecution need not prove that the accused received any benefit as a result of the bribe or identify the particular person that was to receive or give the bribe. Indeed, there is no requirement that the foreign bribery offence be made out at all for a company to be prosecuted under the false accounting laws.
An individual found guilty of the false accounting offence faces a maximum penalty of 10 years’ imprisonment or $1.8 million and an offending company faces sanctions of the greater of $18 million, 3 times the value of the bribe or 10% of the annual turnover of the company.
The offence has a wide application, operating both within Australia and overseas (where Australia’s constitution permits). The Attorney-General’s consent must be sought before action is brought against the conduct of a non-Australian citizen or non-Australian company and the conduct occurs outside of Australia.
Changes to foreign bribery offence
Recognising that foreign bribery is often conducted through indirect means and does not necessarily result in a particular benefit, the Crimes Legislation Amendment (Powers, Offences and Other Measures) Act 2015 (Cth) has amended section 70.2 of the Criminal Code to provide that prosecutors are now not required to:
- identify the particular foreign public official that was offered or paid the bribe; or
- show that the business actually obtained or retained a business advantage from the making of the bribe,
to establish that a person is guilty of a foreign bribery offence.
The changes ensure that persons who use agents or intermediaries to engage in foreign bribery are not immune from prosecution under the foreign bribery laws and make it clear that the actual effect of the bribe is irrelevant.
For more information on the OECD’s review on Australia’s enforcement of foreign bribery laws see: Gilbert + Tobin April 2015 bribery update “OECD releases report card on Australia’s enforcement of bribery laws”.