Changes are on the horizon for Australia’s foreign bribery laws. On 2 December 2019, the Australian government tabled the Crimes Amendment (Combatting Corporate Crime) Bill 2019 in the Senate, which, if made into law, seeks to introduce several key changes for the current regime, including by creating a new corporate offence of failure to prevent bribery by an associate, and the introduction of a Deferred Prosecution Agreement (DPA) scheme for the resolution of serious corporate criminal matters. The Bill is currently adjourned and set for further debate on 4 February 2020.
In parallel, the Attorney General has released a draft guidance document on the steps that corporations may take to prevent an associate from bribing foreign public officials. The Government is seeking admissions on this document prior to 28 February 2020.
What are the key changes in the Bill?
- Bribery has been re-characterised as seeking to ‘improperly influence’ a foreign government official. Under the existing law, it is required to demonstrate that a benefit or advantage was ‘not legitimately due’, an approach that is not in line with jurisdictions such as the UK, USA, Canada and New Zealand, and means that the law is not always clear when a payment is disguised as a legitimate business transaction. The Bill also gives a non-exhaustive list of factors to consider, a key addition being the element of dishonesty.
- The prohibition of bribery has been widened, to prohibit ‘bribery to obtain or retain business or a business or personal advantage’.‘Personal advantage’ has been included so as to encompass a number of different scenarios where advantages may be given to someone in a personal capacity, including things such as residency benefits, the granting of visas, scholarships, personal titles or other honours. This prohibition applies to current office holders, along with candidates for office.
- Introduction of a new offence for corporations ‘failing to prevent’ foreign bribery. This strict liability offence comes with a maximum penalty of the greatest value between either $21 million, 10% of annual turnover in the 12 months before the conduct occurred, or the amount three times greater than the benefit gained. Importantly, this new offence means that companies will be automatically liable for any potential foreign bribery activities of employees and associates, which includes contractors, agents and subsidiaries, unless the business is able to prove that it had ‘adequate procedures’ in place in order to minimize risks. This will include steps such as:
- Having and maintaining effective and proportionate compliance and enforcement strategies;
- Staff training;
- Risk assessments and due diligence;
- Mechanisms for whistle-blowers; and
- Promotion of a culture of integrity throughout all levels of the business.
- Introduction of a DPA scheme.This will allow, in certain cases, a corporation to negotiate a settlement with the authorities rather than face a criminal prosecution. This scheme will not be available for individuals, and will only be an option if the Crown Prosecutor is satisfied a settlement would be in the public interest. Importantly, an admission of guilt is not necessary for corporations to be able to access the scheme. Under the scheme, a number of serious corporate crimes will be covered, such as foreign bribery, money laundering, fraud, and dealing with proceeds of crime. In the event that a DPA is available and complied with, it means that there will be no judicial finding against a corporation that they have acted outside of the law.
Looking forward, once the Bill is passed into law it means big changes in terms of corporate governance for companies that operate overseas or at least have a foreign presence. Importantly, all companies will need to ensure that they are taking positive steps to comply with the new laws. This means ensuring that they have ‘adequate procedures’ in place to protect the company from the actions of a rouge employee or partner. In our next blog post we will discuss the types of steps that companies can take as part of their corporate governance policy to ensure they will comply with the new guidelines. Interested companies and stakeholders should also consider making submissions to the Attorney General’s office in regards to the draft Guidelines prior to 28 February 2020.
Harris Gomez Group is a Common Law firm, with offices in Santiago, Bogotá, and Sydney. We also have legal teams in Peru, Bolivia, Ecuador, Brazil, and Argentina. Over the last 18 years, we have been supporting foreign companies with their growth in Australia and Latin America. Many of our clients are technology companies, service providers and engineering companies that focus on the mining, energy and infrastructure markets.
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