Hoda Nahlous, David Tink and Bree Taylor discuss draft legislation introduced by the Government to prevent foreign bribery offences.
The Australian Government has become more active in seeking to reduce corporate crime and bribery of foreign public officials. After significant inquiry, the Government has now introduced draft legislation into Parliament that, if passed, will increase the scope of foreign bribery offences under the Criminal Code Act 1995 and place an obligation on companies to prevent foreign bribery offences by associated persons.
The Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 was recently introduced into Parliament and has been the subject of much consultation. If passed, the Bill will result in a number of key changes to the existing anti-bribery regulatory framework.
The noteworthy changes under the Bill include:
Failure to prevent foreign bribery
The Bill proposes the introduction of a new offence of “failure to prevent foreign bribery”. This new offence causes a body corporate to be strictly liable for the bribery of foreign public officials by any of its associates for the profit or gain of the company (even if this occurs outside of Australia). The proposed new offence aims to achieve a similar outcome to what currently is prohibited under section 7 of the UK Bribery Act 2010.
Under this offence, a company will be automatically liable for bribery that is proven to be conducted by its employees, officers, contractors and agents, except where the company can show that it had a proper system of internal controls and compliance in place to prevent the bribery from occurring. The definition of ‘associate’ under the Bill extends the application of the offence to the company’s subsidiaries (including off-shore subsidiaries), related entities and corporations otherwise “controlled” by the company, as defined in the Corporations Act 2001.
Deferred Prosecution Agreements
The deferred prosecution agreements (DPA) scheme aims to assist authorities in more efficiently detecting corporate misconduct whilst also encouraging self-reporting by bodies corporate. The DPA scheme encourages bodies corporate to report serious corporate offences, including foreign bribery charges, to the Commonwealth Director of Public Prosecutions (CDPP).
The scheme allows the body corporate to enter into agreements with the CDPP in which they are subject to certain obligations imposed by the CDPP in return for being exempted from any proceedings. A body corporate may only have the opportunity to access the DPA scheme if the CDPP is satisfied that it is in the public interest to do so, and subject to a relevant assessment that it is fair, reasonable, proportionate and in the interests of justice.
Businesses should place emphasis on ensuring their internal controls and compliance for preventing bribery are adequate, and that internal processes are continually reviewed and updated.