...but level of enforcement is still considered inadequate by
anti-corruption watchdog Transparency International
A month after Transparency International
("TI") published its 2010 annual
progress report on enforcement of the OECD Anti-Bribery Convention,
the Australian Federal Police have charged two Reserve Bank of
Australia subsidiaries, Securency and Note Printing Australia, with
offences under the Criminal Code Amendment Act: Bribery of
Foreign Public Officials.
In addition to charges against the two banknote printing
companies, the AFP arrested and charged six of their former
executives in a series of dawn raids in Melbourne last Friday. The
charges relate to a scheme in which the executives paid bribes to
senior politicians and officials across Asia in exchange for
banknote printing contracts between 1999 and 2005.
Australian laws criminalizing the bribery of foreign public
officials have been in force since 1999 but this is the first time
they have resulted in a prosecution. For this reason, Australia is
considered by TI to be a jurisdiction in which there is no
deterrent whatsoever against bribery of foreign public officials by
companies, their subsidiaries and overseas agents.
The prosecution of Securency, Note Printing Australia and their
executives will help to qualify Australia for a "Moderate
Enforcement" rating in TI's 2011 progress report.
This rating requires a jurisdiction to be pursuing at least one
"major case" as well as one active investigation
in a given year. A major case is defined by TI to include a
prosecution involving alleged bribery of senior public officials by
major companies. The fact that the two companies being prosecuted
are both 50% owned by the Reserve Bank of Australia probably
qualifies them as "major companies", especially
given that senior reserve bank officials served on their boards of
directors, including during the time when the bribery offences were
Although a "Moderate Enforcement" rating
would be an improvement on Australia's current rating of
"Little or No Enforcement", jurisdictions with a
"Moderate Enforcement" rating are still
considered by TI to have put in place an inadequate deterrent
against foreign bribery.
In order to achieve the highest rating of "Active
Enforcement", Australia would need to bring at least two
further criminal prosecutions or civil actions involving alleged
bribery of senior public officials by major companies in the next
three years. Of these, at least one would need to be concluded with
The charges against the two companies carry a maximum fine of
$330,000 per offence. The charges against the individuals carry a
maximum penalty of 10 years imprisonment and /or a fine of $1.1
million. TI does not define what a "substantial
sanction" is in its report, but imprisonment of senior
company executives ought to qualify.
If the companies themselves are convicted, it may address the
concern which TI expressed in its 2010 progress report that the
current Australian legal framework lacks an effective system for
imposing criminal liability on corporations. This is because
Australian prosecutors have said they must have concrete proof from
relevant foreign authorities that a benefit derived by a foreign
official was "not legitimately due" to him/her
before they can mount a foreign bribery prosecution. In general, TI
has also expressed doubt as to whether, under the Australian legal
system, successful prosecution of foreign bribery cases is even
The present case may change that view, and is likely to draw
attention to the need for more stringent compliance with
anti-bribery laws among Australian corporations doing business in
Asia. Those doing business in the PRC need to familiarize
themselves with the laws against bribery and commercial bribery in
the PRC Criminal Law, the PRC Law Against Unfair Competition and
related laws and administrative regulations.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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