How Australia combats bribery of foreign public officials

Author: Nyman Gibson Miralis

Subject: Bribing Foreign Public Officials

Keywords: bribery, foreign public officials, Criminal Code, bribery reform

 

The bribery of foreign public officials by Australian individuals or companies is a serious crime which can have significant effects on our international reputation and our economy.

How does Australia currently combat foreign bribery, and what changes have been proposed to improve this regime?

 

The current framework for dealing with foreign bribery

Australia has been a signatory to the key international instrument relating to the prevention of foreign bribery, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions since 1999. According to the terms of the convention, signatories are required to have in place laws formally preventing the bribery of foreign public officials.

Domestically, Australia has fulfilled its commitments under the convention by introducing section 70.2 of the Criminal Code Act 1995, which renders it an offence where:

  • A person, whether an individual or a corporation, provides (including offering or promising to provide, whether themselves or through a third party) a benefit to another person.
  • That intended recipient is not legitimately entitled to the benefit.
  • The intention of the offeror is to influence a foreign public official to use their capacity in such a way that the offeror either obtains or retains business or a business advantage to which they are not legitimately entitled.

 

Challenges prompt federal review

However, difficulties in detecting and enforcing crimes under this section (largely due to the inherent transnational nature of such offences) have prompted a recent review by the Attorney-General’s Department in conjunction with the Australian Federal Police (AFP) and the Commonwealth Director of Public Prosecutions (CDPP). Proposed amendments to relevant sections of the Criminal Code were published in an April 2017 public consultation paper titled Combatting bribery of foreign public officials.

On the enforcement side, the AFP has spearheaded the Fraud and Anti-Corruption Centre (FACC) since 2014. That organisation covers multiple agencies and is intended to strengthen the capacity of law enforcement to detect, pursue and prosecute such crimes. In 2016, the FACC was granted an additional $15 million to focus specifically on investigating foreign bribery.

 

Difficulties with the current Australian framework

Apart from the inherent difficulties of pursuing and subsequently prosecuting cross-border crimes, the Attorney-General’s Department has referred to four specific challenges which face lawmakers in prosecuting public bribery offences.

  1. Fault elements

The current Criminal Code definitions require the prosecution to establish intent by the alleged wrongdoer, both in intending to offer the benefit and in intending to obtain an advantage. This can be particularly difficult to establish when there is no paper trail, or when the person offering the benefit is not the ultimate beneficiary of the benefit.

  1. Demonstrating what is “not legitimately due”

A similarly subjective test, to successfully prosecute for the bribery of foreign officials it must be demonstrated that:

  • The public official was not entitled to the benefit offered and
  • The individual or company offering the bribe was not entitled to the benefit received in return.

This is rendered even more difficult by a requirement for courts to disregard the amount of a bribe. Although initially intended to ensure that even minor financial breaches are caught in the legislation, courts are unable to take into account whether payments claimed to be legitimate are in fact disproportionate.

  1. Reliance on foreign cooperation

In order to prove the elements of the offence outlined above, Australian law enforcement is required at a minimum to obtain specific information about the duties and obligations of the public official involved in the crime. This raises difficulties with cross-jurisdictional assistance, language, and general international cooperation.

  1. Clarification of the intent of the Criminal Code

The anti-bribery provisions are intended to apply regardless of whether the offence is committed with a specific business or business advantage in mind. However, this is not clearly spelled out in the legislation.

 

Proposed changes

These challenges have prompted the review into bribery by the Attorney-General’s Department, which has published various proposed changes to the current framework. These include:

  • Defining “foreign public official” to include candidates for public office. This is intended to capture individuals and corporations who seek to secure an advantage once a nominee is appointed or elected.
  • Replacing the concept of “not legitimately due” with a test of “improper influence”. It is intended that factors which would be taken into account in making an assessment of improper influence would include disproportion between value of benefit provided and consideration received in return, the provision of a benefit despite the absence of any legal obligation to provide it, evidence of due diligence being conducted, whether any local laws are breached by the provision of the benefit, and whether there is evidence of the benefit being provided on a non-commercial basis.
  • Extending the offence to include bribery to obtain a personal (as opposed to a business) advantage. In the current international landscape, this applies particularly to attempts to secure immigration visas or rights to travel.
  • Creating a new offence of recklessness. This would remove the requirement for intent as to whether the conduct might improperly influence the foreign public official so as to convey a benefit or advantage. For obvious reasons, the offer of the bribe would need to remain intentional.
  • Creating an additional offence of failing to prevent foreign bribery. This would impose liability on companies whose employees, contractors or agents (regardless of where they are stationed) have committed the offence of bribery of a foreign public official, unless the company is able to demonstrate that it had appropriate systems in place to avoid such behaviour.
  • Removing the requirement for a foreign official to be acting in their official capacity. This is intended to reflect the fact that officials may be bribed because of who they are, regardless of whether any advantage is subsequently bestowed by them in their formal capacity.
  • Clarifying that the benefit obtained can be for a third party. Although the Australian Government and courts have already been treating the legislation to include third party benefits, proposed changes are intended to tighten up this definition in line with the intent of the convention.
  • Clarifying that no specific business or advantage is intended. This is intended to avoid situations where bribery might be committed just to keep an official “on side” in case they become necessary.

 

Conclusion

At present, Australia complies with the terms of the convention to which it is a signatory. It remains to be seen which of the numerous proposed changes to the way in which international bribery is dealt with by the Australian Government will be implemented.

 

Nyman Gibson Miralis specialise in all aspects of white collar crime and corporate crime law, including laws concerning money laundering, fraud, tax offences and bribery of foreign public officials. If you require assistance, contact one of our expert criminal defence lawyers