General Crime and Serious Crime

 

Author: Nyman Gibson Miralis

Subject: Foreign Bribery

Keywords: australian senate, foreign bribery, Senate Economics References Committee, Criminal Code, OECD, UNCAC, US Foreign Corrupt Practices Act, AFP, ASIC, AGD, ATO, AUSTRAC, CDPP, DFAT, PM&C, International Bar Association Anti-Corruption Committee

 

On 24 June 2015, the Australian Senate referred an inquiry into foreign bribery to the Senate Economics References Committee for report by 1 July 2016.

 

What is the Senate inquiry into foreign bribery about?

Broadly, the inquiry concerns the measures governing the activities of Australian corporations, entities, organisations, individuals, government and related parties with respect to foreign bribery.

The inquiry is a significant and necessary step by the Australian government into combating foreign bribery, examining, in part, the reasons why so few foreign bribery prosecutions have been commenced under the foreign bribery division of the Criminal Code (Cth).

The foreign bribery offence was inserted in the Criminal Code (Cth) in 1999, and Australia’s first foreign bribery prosecutions commenced nearly 12 years later, in 2011. These prosecutions, to date, have not been finalised.

 

What issues do  the stakeholder submissions address concerning foreign bribery?

40 stakeholders provided submissions to the Committee, addressing these terms of reference:

  1. The measures governing the activities of Australian corporations, entities, organisations, individuals, government and related parties with respect to foreign bribery, with specific reference to the effectiveness of, and any possible improvements to, Australia‘s implementation of its obligations under:
    1. The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention), and
    1. The United Nations Convention against Corruption (UNCAC); and
  1. As part of, or in addition to, paragraph (a), the effectiveness of, and any possible improvements to, existing Commonwealth legislation governing foreign bribery, including:
    1. Commonwealth treaties, agreements, jurisdictional reach, and other measures for gathering information and evidence,
    1. The resourcing, effectiveness and structure of Commonwealth agencies and statutory bodies to investigate and, where appropriate, prosecute under the legislation, including cooperation between bodies,
    1. Standards of admissible evidence,
    1. The range of penalties available to the courts, including debarment from government contracts and programs
    1. The statute of limitations,
    1. The range of offences, for example:
      1. False accounting along the lines of the books and records head in the US Foreign Corrupt Practices Act,
      1. Increased focus on the offence of failure to create a corporate culture of compliance,
      1. Liability of directors and senior managers who do not implement a corporate culture of compliance, and
      1. Liability of parent companies for subsidiaries and intermediaries, including joint ventures,
    1. Measures to encourage self-reporting, including but not limited to, civil resolutions, settlements, negotiations, plea bargains, enforceable undertakings and deferred prosecution agreements,
    1. Official guidance to corporations and others as to what is a culture of compliance and a good anti-bribery compliance program,
    1. Private sector whistle blower protection and other incentives to report foreign bribery,
    1. Facilitation payment defence,
    1. Use of suppression orders in prosecutions,
    1. Foreign bribery not involving foreign public officials, for example, company to company or international sporting bodies,
    1. The economic impact, including compliance and reporting costs, of foreign bribery, and
    1. Any other related matters.

 

What are some examples of the submissions made concerning foreign bribery?

 

The Attorney-General’s Department

The Attorney-General’s Department (AGD) provided a cross-agency submission which included input from the Australian Federal Police (AFP), the Australian Securities and Investment Commission (ASIC), the Australian Taxation Office (ATO), the Australian Transaction Reports and Analysis Centre (AUSTRAC), the Commonwealth Director of Public Prosecutions (CDPP), the Department of Foreign Affairs and Trade (DFAT) and the Department of Prime Minister and Cabinet (PM&C).

The AGD submitted that foreign bribery and other types of corruption can impede economic development by skewing competition and causing inefficient allocation of resources, as well as corroding good governance and undermining the rule of law. The AGD confirmed that Australia is a committed member of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the Anti-Bribery Convention). The AGD noted that international cooperation is required to effectively combat foreign bribery and that it is an inherently resource intensive crime type to investigate and prosecute. The AGD explained that the AFP coordinates with a number of other agencies to investigate foreign bribery allegations.

 

The Business Law Section of the Law Council of Australia

The Business Law Section of the Law Council of Australia (the peak national representative body of the Australian legal profession) submitted that much could be done to improve the effectiveness of Australian sanctions against the bribery of foreign officials.

It noted the failure of Australian regulatory bodies to successfully achieve a prosecution in the 15 years that Division 70 of the Australian Criminal Code has been in place, suggesting that there are serious problems with the Australian regime (both with the legislation and with enforcement) that need to be confronted. The key areas they identified where improvements could be made were:

  1. Better resourcing and empowering the regulatory bodies who are responsible for investigating allegations of foreign bribery;
  2. Improving the skill levels of investigators;
  3. Improving the legislative framework; and
  4. An enhanced regulatory enforcement pyramid of sanctions.

 

The International Bar Association’s Anti-Corruption Committee

The International Bar Association’s Anti-Corruption Committee submitted a number of recommendations in the submissions, including:

  1. In respect of section 70 of the Criminal Code:
    1. Reviewing the fault elements of the foreign bribery offence in order to simplify the elements of the offence;
    2. Abolishing facilitation payments as a defence to a foreign bribery offences;
    3. Enact proposed changes; and
    4. Increasing the penalties for the foreign bribery offence.
  2. In respect of mutual legal assistance
    1. Reviewing existing mutual legal assistance legislation;
    2. Amending legislation and supporting legislation to streamline the admissibility of information and documents;
    3. Reviewing and focusing on inter-agency memoranda of understandings to facilitate and streamline the exchange of information;
    4. Ensuring the AFP is adequately resourced in terms of funds and experienced personnel to pro-actively investigate and prosecute foreign bribery offences; and
    5. Give serious consideration to the creation of a single, focused agency to deal with complex financial crimes (including foreign bribery) or, as a second-best outcome, ensuring ASIC, the AFP and the CDPP work together and where appropriate, bring parallel proceedings like the US Department of Justice and the US Securities and Exchange Commission.
  3. In respect of Australian businesses:
    1. Prepare and publish an Australia Foreign Bribery Resources Guide for Australian business, ensuring that it covers not only business but Australian embassies, trade missions, trade and aid organisations, commercial attaches and all Australian public and private organisations; and
    2. In order to promote the importance of compliance, create a position of Anti-Corruption Compliance Officer or  Counsel (within ASIC, the AFP or the CDPP), drawing upon experienced compliance experts, to evaluate a corporation’s compliance program, as part of any decision to prosecute or to reach a structured settlement.
  4. Creating a National Anti-Corruption Plan.
  5. Enacting laws to establish an independent, properly resourced and staffed Commonwealth anti-corruption commission that covers all aspects of Commonwealth government activity and the conduct of all public servants employed by any Commonwealth entity and all politicians.

 

The Commonwealth Director of Public Prosecutions

The CDPP, Australia’s Federal Prosecution Service, responded to concerns raised by the International Bar Association and the Law Council of Australia in their submissions.

The CDPP noted that current experience demonstrates that foreign bribery matters will be some of the most complex and resource intensive matters prosecuted in Australia, and that the resource challenges may be magnified by the fact that defendants may be well resourced and backed by insurance.

It confirmed that the challenges inherent in prosecuting foreign bribery offences do not mean that the CPDP would ever shy away from prosecuting a foreign bribery matter that meets its Prosecution Policy, but did mean that matters needed to be carefully evaluated against that policy.

 

Nyman Gibson Miralis are experts in foreign bribery matters that involve multiple jurisdictional investigations. If you require assistance, contact one of our expert criminal defence lawyers