Melbourne, 16 June
2011: Australian companies with an international presence
risk falling foul of international anti-bribery and anti-corruption
laws in the absence of clear and rigorous policies to ensure those
who engage with foreign government officials on their behalf do not
cross the line, according to Clayton Utz Litigation & Dispute
Resolution partner Andrew
Speaking at a seminar in Melbourne
today jointly hosted by Clayton Utz, Deloitte and DFAT, Mr Morrison
said Australian companies with a presence or engaged in business
dealings in foreign countries faced large financial penalties, and
in the case of individuals, possible jail time, if they failed to
employ systems or keep proper records to ensure their compliance
with international anti-bribery and corruption regimes.
"Over and above Australia's
own, but relatively untested, legislative regime, the formidable US
Foreign Corrupt Practices Act and, from next month, the UK Bribery
Act, apply far more broadly than Australian companies may
realise," said Mr Morrison.
"In particular, under the UK
Bribery Act, which comes into force on 1 July 2011, a company with
a connection to the UK such that it falls within the UK regime can
be held to account for negligently failing to have systems in place
to prevent acts of bribery by those acting on its behalf.
"This underlines the importance of
companies – particularly those doing business in
high-risk regions such as Africa – completing stringent
due diligence examinations of their offshore interests. Australian
companies need policies that clearly set out the permitted ways in
which employees and agents can engage with governments and foreign
officials overseas, and what steps they should take if they believe
they may be at risk of breaking the law."
Mr Morrison said the heightened focus
by international regulators in prosecuting breaches of anti-bribery
and anticorruption laws meant that Australian companies doing
business overseas must continually assess their activities and the
behaviour of their business partners and local agents against
conduct which they might not have previously thought unlawful.
"For example, there is a very grey
area between what constitutes a "facilitation payment"
– minor payments to government to secure the performance
of a routine action of minor nature, which may provide a defence in
Australia but still carry enormous business risk – and
activity that amounts to bribery and corruption," he said.
"This is especially the case when
that defence will no longer be available under the new regime, or
because plea bargains may be available in the US but not here in
Australia. This is another reason why companies need clear policies
to ensure their employees and agents understand their legal
obligations and potential liabilities, as it is all too easy to
have stepped over the line. As with all legal risks, whole of
company clarity and prevention is the best line of
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