Author: Nyman Gibson Miralis
Subject: Bribery of foreign public officials
Keywords: Bribery, foreign public officials, Criminal Code, OECD convention, anti-bribery recommendations.
As a signatory to the OECD’s global anti-bribery convention, Australia is subject to regular reviews of its compliance.
Australia signed up to the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions in 1999.
In October 2012, the OECD Working Group on Bribery conducted what was referred to as a phase 3 evaluation, which resulted in the publication of numerous recommendations for improvement.
Based on Australia’s response to the evaluation, in April 2015, the working group published a further scorecard entitled Australia: Follow-Up to the Phase 3 Report and Recommendations.
The follow-up report found Australia had fully implemented 16 out of 33 recommendations and partly implemented a further nine recommendations.
Despite considering that Australia has “made good progress on addressing a number of important recommendations”, the working group provided a number of additional recommendations for implementation.
What are the key anti-bribery recommendations Australia has implemented?
There are numerous recommendations set out in the phase 3 follow-up report.
Those which Australia has implemented or undertaken to implement include:
- Reviewing enforcement approaches by Australian Authorities generally.
- Ensuring an understanding of the difference between “facilitation payments” and bribes, and enforcing proper accounting of small facilitation payments in company books and records.
- Amending legislative requirements so that proof of intent to bribe a foreign public official is not a key element of the crime. Although Australian legislators consider that the legislation is already relatively clear, Australia has agreed to tighten provisions of the legislation further.
- Ensuring ongoing prosecution of corporate entities committing the offence of bribery of a foreign public official (instead of focusing only on individuals)
- Increasing maximum sentences for “false accounting” either at Commonwealth or state level.
- Taking steps to adequately prosecute false accounting offences.
- Ensuring that Australian law enforcement considers confiscation of assets by wrongdoers in foreign bribery matters, where appropriate.
- Enlisting the corporate watchdog ASIC and its experience with local white collar crimes to assist the Australian Federal Police (AFP) in enforcement of foreign bribery laws.
- Encouraging information sharing between key Australian organisations including the AFP, the Australian Prudential Regulatory Authority (APRA) and ASIC to ensure more successful detection and enforcement. Setting up internal protocols governing when foreign bribery cases are to be referred to the AFP.
- Ensuring that the AFP improves its systems relating to foreign bribery, in particular by:
- Ensuring that investigations are not prematurely closed.
- Acting with greater proactivity to obtain information to assist with prosecutions.
- Exploring more options for exercising jurisdiction over related legal entities.
- Actively considering opportunities for concurrent or joint investigations with other Australian or international law enforcement agencies, depending on specific circumstances.
- Ensuring that alternative options for prosecution are considered, such as pursuing charges of false accounting and money laundering where foreign bribery charges cannot be fully established.
- Ensuring that Australia develops and enforces a process for plea bargains and self-reporting by companies, having regard to how much cooperation might be expected of a company and how much credit it might receive for such cooperation, monitoring compliance with negotiated agreements, and considering whether it is appropriate to prosecute those associated with the company (such as directors and officers)
- Providing additional training to AFP officers in relation to foreign bribery.
- Ensuring that the Commonwealth Director of Public Prosecutions (CDPP) has sufficient resources available to fully prosecute foreign bribery matters.
- Ensuring that the AFP and other Australian enforcement bodies remain in compliance with the terms of the convention and avoid “impermissible influence.”
- Guaranteeing the provision of mutual legal assistance to foreign nations for civil white collar crimes, in circumstances where the state’s legal system may not permit criminal prosecutions.
- Educating Australian state-level enforcement Authorities about the nature and required elements of the crime of bribery of foreign public officials.
- Educating the private sector about the nature of the offence, with a particular focus on companies with a multinational presence and the development of targeted anti-bribery compliance programs. This also requires companies to undertake detailed due diligence on employees, especially foreign agents.
- Creating a summary of publicly available information as to the precise definition of bribery (as distinct from promotional expenditure, hospitality and charitable donations)
- Ensuring consistency between the Income Tax Assessment Act 1997 and the Criminal Code Act 2009 (which implement the terms of the convention) to ensure that the record-keeping requirements of the tax assessment act align with defences under the Criminal Code.
- Facilitating communication between the AFP and the ATO so that the ATO is immediately advised of foreign bribery convictions, and can take steps to determine whether any bribes have been claimed as deductions.
- Requiring Australian civil servants working overseas to immediately report any suspicions of bribery to the AFP, and impose adequate reporting requirements on those holding such positions.
- Requiring any allegations of foreign bribery made against any Australian citizens, residents and companies are immediately reported to the AFP for investigation.
Additional recommendations that haven’t been implemented
In addition to the recommendations which Australia has agreed to implement, there are others that have not been put in place at this time, in some cases because the federal government believes the current arrangements are adequate. These include:
- Requiring external auditors to report on instances of foreign bribery, especially where it has been committed by subsidiaries or participants in a joint venture. Australian lawmakers responded to the recommendation by noting that the audit requirements set out in the Corporations Act 2001 and the Australian Auditing Standards are sufficient at this time.
- Providing whistleblower protections, particularly in relation to avoiding disciplinary action or discrimination. Australian lawmakers consider that whistleblower and reporter protections are presently sufficient and do not require improvement.
- Codifying clear rules for Australian procuring agencies as to whether companies or individuals found guilty of the offence of foreign bribery ought to be debarred.
Australia’s compliance with the terms of the convention is monitored on an ongoing basis by the OECD. Phase 4 of the monitoring process is currently underway, with Australia’s progress on enforcement and rectifying weaknesses identified in phase 3 to be evaluated at the end of 2017.
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