Overview
The Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2024 will change the legal framework to combat foreign bribery within Australia. New offence provisions will commence 8 September 2024.
The Act seeks to address perceived shortcomings in the existing foreign bribery offences in Australia. Currently, the limited scope and complexity of the law has hindered successful prosecutions, leading to concerns raised by the Organization for Economic Cooperation and Development (OECD) Working Group on Bribery, regarding Australia’s low enforcement levels. The proposed amendments contain similarities to legislation enacted in the United Kingdom under the Bribery Act 2010.
History
As a committed member to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Anti-Bribery Convention), Australia is required to criminalise the bribery of foreign officials and to implement effective measures holding both individuals and corporations accountable.
Key measures of this Bill bear resemblance to previous Bills introduced in 2017 and 2019 which despite receiving bipartisan support, lapsed without a vote. The new Bill demonstrates Australia’s dedication to enhancing Australia’s response to foreign bribery, ensuring the efficacy of detecting, investigating, and prosecuting such crimes.
Amendments
The key amendments in Schedule 1 of the Act designed to enhance Australia’s implementation and enforcement of the Anti-Bribery Convention are:
- Corporate offence – failing to prevent bribery: A new indictable corporate offence of failing to prevent foreign bribery has been introduced, bringing Australian law closer to the UK Bribery Act. Under this provision, a body corporate can be held liable if an associate or employee of the company engages in bribery for the benefit of the corporate entity. The amendments include a defence provision, allowing the body corporate to establish that it had adequate procedures in place to prevent foreign bribery by its associates. This offence is intended to address the challenges of establishing criminal liability for businesses that ignore misconduct by their employees and associates, with the intended goal of promoting a culture of compliance.
- Increased penalties for bodies corporate: The maximum penalty (subsection 70.5A(6) Criminal Code) is not more than the greatest of the following, 100,000 penalty units, three times the assessed value of benefit obtained by the associate if determinable, or 10% of the body corporate’s annual turnover for the 12-month period ending at the end of the month in which the associate committed or began committing the offence.
- Increased penalties for natural persons: Where a natural person is convicted of the offence of foreign bribery, the maximum penalty is 10 years’ imprisonment or a fine of not more than 10,000 penalty units, or both.
- Expansion of the foreign bribery offence: The Act broadens the definition of the offence to encompass bribery of candidates for public office, not just current officeholders, and extends it to cover bribery conducted to obtain a personal advantage, in addition to the existing scope of obtaining or retaining a business advantage.
- Redefining elements of the offence: The requirement that the benefit or business advantage be ‘not legitimately due’ has been removed and replaced by the concept of ‘improperly influencing’ a foreign public official. The Act eliminates the existing condition that the foreign public official must be influenced in the exercise of their official duties. A foreign public official will also be able to rely on a ‘lawful conduct’ type defence, where it can be shown that a written law in place where a person’s conduct occurred required or permitted the provision of the relevant benefit in question.
- Clarification of intent and beneficiaries: The Act makes it clear that the foreign bribery offence does not necessitate proving that the accused had a specific business or personal advantage in mind, and the advantage can be obtained for another entity.
What next
The amendments aim to create a more comprehensive and flexible legal framework for combating foreign bribery in Australia, aligning it with the evolving nature of such offences. By removing the current complexities and restrictions, the Government intends to encourage and facilitate successful prosecutions, particularly in high-risk regions and sectors where Australian companies operate.
To support the Crimes Legislation Amendment, consequential amendments will also be made to the Income Tax Assessment Act 1997, preserving the existing rule that prohibits the deduction of bribes to foreign public officials as a loss or outgoing.
In the course of its passage through the Senate, the Act was amended to include a review provision. This will mean that the relevant Minister must undertake a review of the operation of the amendments 18 months after the Act commences. This will be approximately 1 April 2026.
There is one important difference between the Act as passed and the 2017 and 2019 proposed legislation. Previous versions included provision for a deferred prosecution scheme, and the Senate considered amendments to re-introduce such a scheme which were unsuccessful.
Australian entities will need to review their anti-bribery policies, including coverage of agents and employees.
Need to know more?
If you have questions, or require assistance, in relation to how these amendments may impact your business, please contact our HWL Ebsworth Financial Services Advisory team.
This article was written by James Moore, Partner, Byron David, Senior Associate, and Angus Clugston, Solicitor.
