The Organisation for Economic Co-operation and Development (OECD) released its report on the implementation of the OECD Anti-Bribery Convention in Australia in October 2012 (Report). Whilst the Report was critical of Australia’s enforcement action with respect to foreign bribery offences to date, it made a number of recommendations which we expect will be largely adopted by regulators in the coming months and may result in more Australian companies being scrutinised in respect of their business conduct overseas. It is also expected that the Australian Government will adopt a National Anti-Corruption Plan in the near future.
The offence of bribing a foreign public official is set out in section 70.2 of the Criminal Code Act 1995 (Cth) (Criminal Code). A person is guilty of the offence if:
- that person provides, causes or offers to provide a benefit to another person; and
- the benefit is not legitimately due to the other person; and
- that person intends to influence a foreign public official in the exercise of the official’s duties in order to obtain or retain business, or a business advantage, that is not legitimately due to the recipient of the business or business advantage.
If convicted of foreign bribery, an individual may be liable for a punishment of up to 10 years imprisonment and/or a fine of up to $1.1 million. For corporations, the offence is punishable by a fine, whichever is the greater of (a) $11 million; (b) 3 times the value of the benefit to the corporation; or (c) 10% of the annual turnover of the corporation.
The Australian Federal Police (AFP) has investigated 28 allegations of foreign bribery since 2005, one of which has led to prosecutions. Based on the recommendations made in the Report, we would expect these numbers to increase in the future. We also think it is likely that ASIC will begin working with the AFP to assist in the detection and investigation of offences of foreign bribery.
Companies should be vigilant in terms of preventing or acting upon allegations of foreign bribery. Division 12 of the Criminal Code sets out principles relating to corporate criminal responsibility. A company can be charged with a foreign bribery offence if the board or a high level managerial agent intentionally, knowingly or recklessly committed the offence or expressly, tacitly or impliedly authorised or permitted the offence. A company can also be held responsible for the actions of its employees if its corporate culture is found to have encouraged, tolerated or led to the offence, or if it failed to create a corporate culture that required compliance with Australia’s laws.
The OECD reports that 75% of the top 100 ASX companies and 63% of the top 200 ASX companies operate their businesses in high risk sectors, high risk countries or both, meaning that a significant portion of Australia’s international economic activities are exposed to risks of foreign bribery.
It is imperative that corporations who operate in overseas markets are aware of Australia’s laws in relation to foreign bribery and put measures in place to prevent bribery and corruption from occurring within their organisations. Such measures may include the implementation of codes of conduct, risk assessments and compliance programs, provision of training to all employees, introduction of whistleblower policies and development of a corporate culture with a zero tolerance approach to bribery and corruption.