Last week the Australian Government presented the Crimes Legislation Amendment Bill 2015 to the House of Representatives. The Bill includes a significant amendment to the offence of bribing a foreign official but only partially addresses criticisms of Australia's bribery laws, thereby raising the issue of whether further reforms are likely.
On 19 March 2015 the Australian Minister for Justice, The Hon Michael Keenan MP, presented theCrimes Legislation Amendment (Powers, Offences and Other Measures) Bill 2015 (the Bill) to the House of Representatives. The Bill includes amendments to the offence of bribing a foreign official under the Commonwealth Criminal Code.
The offence of bribing a foreign public official and the proposed amendment
Division 70 of the Criminal Code currently provides that it is an offence to offer or provide an undue benefit to another person in any circumstance where:
- the benefit is not legitimately due; and
- it is provided with the intention of influencing an individual in the exercise of their duties as a foreign public official, in order to obtain business or an undue business advantage (emphasis added).
The term 'foreign public official' is very broadly defined, the law can apply to conduct taking place entirely outside Australia and the penalties for corporations and individuals are severe. This offence was inserted into the Criminal Code in 1999 to give effect to Australia's obligations under the OECD Anti-Bribery Convention.
Although it will be possible in some circumstances to establish that a bribe has been offered or provided with the intent to induce a government agency to grant business or some other benefit not legitimately due, this element of the offence has come under criticism as there are many situations where it will be difficult to identify the specific official who the offender influenced (or attempted to influence). Foreign bribery is frequently committed through intermediaries such as local agents or contractors and thus there will be instances where even the individual offering the bribe will never know the identity of the target of the bribe.
The proposed amendment to Division 70 clarifies that when proving that a benefit was offered or provided with an intention to influence a foreign public official, it will not be necessary to prove an intention to influence a particular official.
Is there a need for further reform?
The proposed amendment to Division 70 will remove a significant loophole in Australia's foreign bribery offence. However, the Bill has overlooked a number of other aspects of Division 70 which have been the subject of persistent and robust criticism by the OECD Working Group on Bribery, Transparency International, academics and prosecutors. Arguably the two most significant aspects overlooked are the requirement to disregard the value of the benefit and the facilitation payment defence.
Disregarding the value of the benefit
When considering whether a benefit offered or provided to a person is legitimately due, Division 70 states that a court is to disregard the value of the benefit. The intention of those who drafted the legislation was presumably to ensure that bribery is an offence irrespective of the value of the benefit offered or provided. However, this provision may prevent a court considering the value of a benefit in circumstances where the value alone may suggest that a benefit is not legitimately due. By way of example, there may be situations where a public official would be legitimately due a modest fee for providing a particular service related to obtaining business. However, in the same situation a very large fee may be highly improper and not legitimately due. Accordingly it has been suggested that Division 70 should be amended to clarify that bribery remains an offence irrespective of the value of the benefit offered or given, but a court may consider the value where value alone suggests a benefit is not legitimately due.
The facilitation payment defence
A number of arguments have been advanced in favour of removing this defence, including:
- consistency with Australian Commonwealth and state laws regarding bribery of public officials in Australia, which do not include a facilitation payment defence or anything comparable;
- consistency with foreign laws which can, or may, impact upon Australian corporations and individuals, and which expressly outlaw facilitation payments;
- the need to ensure compliance with international treaty obligations (by retaining a facilitation payment defence Australia is currently in breach of its treaty obligations in relation to the UNCAC Convention); and
- increasing legal certainty by removing the need to draw a distinction between a bribe and a facilitation payment.
A public consultation process was undertaken on this issue at the end of 2011 but as yet, the Government has not issued its response.
Increased enforcement and the importance of compliance
It remains to be seen whether steps will be taken to address some of the other contentious aspects of Australia's present foreign bribery laws which have been overlooked in the Bill. However, the proposed amendment to Division 70 of the Criminal Code, if enacted, is likely to encourage the AFP to launch more prosecutions for foreign bribery and thus reinforces the importance of implementing and maintaining comprehensive compliance programs. As to the second of these matters, a corporation will not be liable for bribery (or any other offence under the Crimes Act where intention, knowledge or recklessness is an element of the offence) if it is able to prove that it exercised due diligence to prevent the commission of the offence.