Australia is a signatory to the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions (OECD Anti-Bribery Convention), as well as a party to the United Nations Convention against Corruption.
Bribery of foreign public officials is criminalised in Australia under section 70.1(1) of the Criminal Code Act 1995 (Cth) which makes it an offence to provide, offer or promise to provide a benefit not legitimately due to another person, with the intention of influencing the exercise of a foreign public official’s duties in order to obtain a business advantage.
Australia’s first foreign bribery investigation: Securency International Pty Ltd
In 2009, the Australian Federal Police launched an investigation into an alleged international bribery racket involving politicians and government officials in the Asia-Pacific region. Codenamed “Operation Rune”, it was the first investigation of foreign bribery by an Australian law enforcement agency which resulted in foreign bribery charges.
The investigation concerned numerous Australian employees of Securency International Pty Ltd (Securency) and Note Printing Australia Limited (NPA). Both companies were subsidiaries for the Reserve Bank of Australia and were involved in the manufacture and supply of polymer banknotes used in Australia and internationally.
The core offending conduct involved the payment of Indonesian and Malaysian agents engaged to assist in obtaining contracts with banks in each respective country. While the substantial commission paid to overseas agents did not represent an offence, it was demonstrated that Securency and NPA employees were aware that the local agents were paying a portion of their commission to bank officials with the intention of improperly influencing them in the exercise of their duties. These payments were described by Securency and NPA employees as “special commission”.
What have been the criminal prosecution outcomes?
R v Ellery [2012] VSC 349
Mr David Ellery, chief financial officer and company secretary of Securency, was sentenced on 20 August 2012, having pled guilty to one charge of false accounting.
While Mr Ellery was found to have not been directly involved in negotiations between agents in Malaysia and Securency employees, he was found to have been copied into emails regarding the proposed payment of “special commission”. Mr Ellery was involved in the preparation of a debit note to the sum of $79,502 for the direct payment of an agent involved in the sales of bank note polymer in Malaysia. To conceal the payment, Mr Ellery informed fellow employees that supporting documentation had been sighted, when it had not.
R v Christanto [2013] VSC 521
Mr Radius Christanto, Indonesian agent of Securency, was sentenced on 3 October 2013, having pled guilty to one charge of conspiring with others to bribe a foreign public official in order to obtain business.
Mr Christanto was found to have made payments in cash and benefits to the value of approximately US$750,000 to an Indonesian lobbyist to promote and ultimately secure a contract for the use of polymer banknotes by the Bank of Indonesia. Mr Christanto was in turn assured by Securency employees that he could recover his expenses by way of commission payments. Mr Christanto personally retained at least US$3 million in commission over the offending period.
Commonwealth Director of Public Prosecutions v Curtis [2017] VSC 613
Mr Myles Curtis, General Manager of Securency, was sentenced on 17 October 2017, having pled guilty to one charge of conspiring to offer to bribe a foreign public official in order to obtain business and one charge of false accounting.
Mr Curtis was found to have played a leading role in negotiating the amounts of commission payments to be made to agents in Indonesia and Malaysia. It was clear on the evidence that it was at all times known by Mr Curtis that substantial payments were being on-paid to bank officials to obtain contracts for service.
The false accounting charge related to a deliberately misleading description of a commission payment made to a Malaysian agent as “marketing and promotional fees”.
Commonwealth Director of Public Prosecutions v Boillot [2018] VSC 739
Mr Christian Boillot, employee of the international sales and marketing department of both Securency and NPA, was sentenced on 6 December 2018, having pled guilty to one charge of conspiring to offer to bribe a foreign public official in order to obtain business.
Mr Boillot was found to have communicated directly with agents in Malaysia in relation to proposed arrangements with bank officials. Mr Boillot was found to have demonstrated knowledge as to the illegality of his conduct and made efforts to conceal the proposed arrangements with the relevant agents.
What sentencing principles apply to foreign bribery cases?
Her Honour Hollingworth J was responsible for sentencing all four of the above employees of Securency and NPA. Her Honour observed that:
- The conduct was a serious example of the offence of conspiracy to offer a bribe;
- The conduct was sophisticated, carefully orchestrated and concealed;
- The offending conduct occurred over a lengthy period; and
- The amount of commission paid was substantial;
In sentencing the offenders, Her Honour consistently applied a number of offence specific sentencing principles, namely:
- Offenders who engage in white collar crime commonly present with otherwise good character and reputation. Because such offenders generally have good prospects of rehabilitation, specific deterrence is often not a very relevant consideration. Difficulty in detection of such offences however increases the need for general deterrence.
- General deterrence and denunciation remain ‘very important’ sentencing considerations in all cases involving white collar crime, even in the absence of direct evidence as to the prevalence of foreign bribery offences.
- Offenders who act purely for personal financial gain have heightened moral culpability when compared against those who act in order to promote their employers interests.
- Offenders party to conspiracies in two different countries have engaged in more serious offending conduct then those who operate in a single jurisdiction.
- Offenders who hold greater seniority in their corporate structure have heightened moral culpability, due to their ability to influence corporate culture and control decision making.
Further judicial consideration in the Court of Criminal Appeal
Elomar v R; Elomar v R [2018] NSWCCA 224
Sentencing principles relating to the offence of conspiracy to bribe a foreign public official were also recently considered by the NSW Court of Criminal Appeal.
In this matter, Ibrahim and Mamdouh Elomar were directors in Lifese Pty Ltd. The company was involved in engineering, infrastructure and construction projects both in Australia and Iraq. The Elomars engaged Mr Al Zubaidi and Mr Jousif as persons who held themselves out to be experts in the introduction of companies to government and statutory authorities in Iraq.
In September 2014, Mamdouh Elomar gave approximately $1,035,000 in cash to Mr Jousif during a meeting which occurred at an Australian restaurant. Mr Jousif in turn provided the money to Mr Al Zubaidi saying it represented a “green light” to bribe Iraqi officials in relation to various proposed projects.
On appeal, the Court was tasked with considering the prior findings of Adamson J on sentence. His Honour Hoeben CJ, with whom MacFarlan JA and Fagan J agreed, confirmed the following principles:
- Even in the absence of direct evidence as to the final destination of monies transferred by way of a bribe, damage can still be established. Bribery by its very nature distorts markets and tends to impede the assessment of tenders on any rational basis.
- There is no ‘blanket rule’ that good character is not a significant mitigating factor in an offence of foreign bribery. A distinction should be drawn between offenders who have deliberately used their prior good character to assist in the commission of criminal behavior and those who have engaged in an isolated lapse properly characterised as an example of human frailty.
As such, when considering ‘white collar’ offences such as those involving foreign bribery, the nature of the offence itself does not enable a sentencing court to give less weight to evidence of prior good character. Rather the particular circumstances of the offence must be considered in determining the weight of such evidence in sentencing persons charged with bribery of foreign public officials.
