Jurisdiction - Australia
Reports and Analysis
Australia – Possible Changes Foreign Bribery Laws.

6 December, 2011

 

 

In brief:

 

The Federal Government has announced possible changes to Australia's laws concerning foreign and domestic bribery. The changes, if adopted, will strengthen anti-bribery legislation in Australia and bring it into line with UK anti-bribery legislation.

 

The consultation

 

A public consultation on the possible amendments to the Criminal Code Act 1995 (Cth) (the Criminal Code) covers four issues:

 

  • facilitation payments – possible removal of the defence to bribery of a foreign public official, where the payment was a facilitation payment;

  • value of benefit – possible changes to section 70.2(2)(b) of the Criminal Code that would permit a court to consider the value of the benefit in determining whether the benefit was not legitimately due to a person in a particular situation;

  • identity of bribe target – possible removal of the need to prove that a person intended to bribe a particular public official; and

  • harmonisation of domestic offences – the possible removal of the requirement of dishonesty from ss 141 and 142 of the Criminal Code, which criminalises domestic bribery, to bring these laws into line with the crimes for foreign bribery.

 

This announcement is further evidence of the Australian Government's commitment to strengthening laws designed to address bribery and corruption.

 

The consultation paper is available at the Attorney-General's website.

 

Overview of Australia's foreign bribery laws

 

Under federal Australian law, domestic bribery and foreign bribery offences are contained in the Criminal Code. Under the Criminal Code, bribery occurs when someone provides or offers to provide a benefit to a person where that benefit is:

 

  • not legitimately due; and

  • where it is given or offered with the intention of influencing a public official in the exercise of their duties.

 

The bribe must be provided or offered with the intention of obtaining business or a business advantage. That intention need not be expressed and the benefit given can be monetary or non-monetary.

 

The bribe may be made to the public official directly or indirectly, for example, through an agent, relative or business partner of the public official or person within the private sector.

 

A bribe is not criminal where it:

 

  • is lawful conduct in the jurisdiction in which it was made according to the written law in that jurisdiction; or

  • it is a facilitation payment.

 

Under the Criminal Code, 'facilitation payments' are benefits of a minor nature provided or offered in return for 'routine government actions'. The definition is narrow and requires that payments be documented in detail.

 

What is at stake?

 

Of the proposed reforms, the most significant is the proposal to remove the defence of facilitation payments.

 

While some Australian companies may perceive the removal of a facilitation payments defence as a possible threat to their competitiveness when conducting business overseas, the defence is not itself without compliance difficulties. Critically, companies seeking to rely on the facilitation payments defence need to consider that:

 

  • the defence only applies if the company, which has made a facilitation payment, has kept a record of the facilitation payment (which may in itself create exposure for the company);

 

  • the defence will not protect that company from foreign laws which may prohibit the same transaction;

 

  • the Australian Government may assist foreign governments in their prosecution of facilitation payments; and

 

  • a company making a facilitation payment may be precluded from obtaining Australian Government support and finance, and may be unable to rely upon civil remedies to enforce any contract that has been obtained by means of a facilitation payment.

 

In addition, the making of one or more facilitation payments may cause a company reputational damage and may expose it to further demands for bribes in the future.

 

The facilitation payment defence does not exist in the laws of many of Australia's trading partners. For example, the UK Bribery Act 2010 (which came into effect on 1 July 2011) does not contain this defence. This means that companies carrying on business in the UK are prohibited from making or offering facilitation payments anywhere in the world.

 

What you should do?

 

Companies should consider reviewing their policies and compliance programs in the light of this possible law reform.

 

The Minister has invited submissions on the proposed reforms by 15 December 2011. Submissions may be sent to foreign.bribery@ag.gov.au.

 

 

For further details, please contact:

 

Ross Drinnan, Allens Arthur Robinson

ross.drinnan@aar.com.au

 

Rachel Nicolson, Allens Arthur Robinson To hear Rachel speaking on the topic go to: Boardroom Radio.

rachel.nicolson@aar.com.au

 

 

Allen Clayton-Greene, Allens Arthur Robinson

allenclaytongreene@aar.co.au

 

 

 

 

 

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