Australia's anti-bribery and corruption laws are about to
get their first real test in court with the arrest and charging of
six people for alleged bribery of foreign officials, and the
charging of Securency International Pty Ltd and Note Printing
Australia Limited with the same offence.
The alleged bribery of foreign officials
Securency manufactures and sells the polymer banknote technology
to other countries. Note Printing Australia does the printing.
For the last two years the Australian Federal Police has been
investigating their activities in procuring banknote contracts for
Malaysia, Indonesia and Vietnam. It's alleged the two companies
used international sales agents to bribe officials in these three
countries, with media reports suggesting the total sum could be
nearly $50 million. The alleged conduct occurred prior to 2006.
Australia's anti-bribery and corruption laws
Under the Commonwealth Criminal Code a person is guilty of a
bribery offence if:
that person offers, offers to provide, provides, or causes to
provide a benefit to another person; and
the benefit is "not legitimately due" to the other
the person intends to influence a foreign public official
(broadly defined) in the exercise of his or her official duty in
order to obtain or retain business, or a business advantage, that
is not legitimately due to the recipient of the business
The scope of the offence is wide – it applies to
wholly or partly in Australia, or on Australian ship or
wholly outside Australia if done by an Australian citizen,
Australian resident, or company incorporated in Australia.
The penalties are significant. The six individuals charged face
a maximum of 10 years' gaol time and a fine of $66,000. The two
companies each face a maximum fine of $330,000 per offence.
Increased penalties were introduced in early 2010. Individuals
charged with similar offences for conduct occurring after that date
now face a fine of $1.1 million in addition to the possible 10
years' gaol time. Companies face a penalty of whichever is the
a fine of up to $11,000,000;
three times the value of the benefit obtained as a result of
the breach; or
10% of the body corporate's turnover during the 12 period
What happens now?
The AFP has said that its investigations are ongoing; media
reports suggest that further activity in other countries is being
This situation is a clear warning to companies engaged in
business beyond our shores that Australian authorities are finally
making good on their promise to vigorously investigate and
prosecute these offences. To appropriately manage this risk it is
critical that companies ensure they have a demonstrably strong and
compliant internal anti-bribery and corruption culture. This
requires a top-down approach. Important steps to consider
obtaining privileged legal advice and risk assessment;
putting in place corporate compliance programs and policies,
including procedures for appropriate record keeping culture;
implementation of targeted training of all staff and board
incorporation of anti-corruption protocols in internal audit
adequate due diligence when engaging in any transaction with a
third party, particularly acquisitions; and
ensuring a demonstrable focus on identifying and assessing
appropriate remedial actions if a potential breach is
This increase has financial implications for companies and individuals found guilty under a wide range of Federal laws.
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