On 2 December 2019, as part of its on-going commitment to strengthen Australia's foreign corporate bribery framework, previously discussed in December 2017 and April 2018, the Federal Government introduced the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 (Cth) (the Bill). The Bill purports to address challenges associated with detecting and addressing serious corporate crime and is, with few exceptions, an identical reincarnation of its 2017 equivalent (discussed here) which lapsed earlier this year because of the Australian federal election.
The Bill contains three schedules which seek to enhance the tools available to law enforcement and prosecutors to tackle corporate crime by:
- Amending the offence of bribing a foreign official under Division 70 of the Criminal Code Act 1995 (Cth) (Criminal Code);
- Implementing a Commonwealth deferred prosecution agreement (DPA) scheme; and
- Introducing a new definition of 'dishonest' into the Dictionary of the Criminal Code.
Foreign Bribery Offence
Presently, the foreign bribery offence under the Criminal Code requires that the prosecution prove that both the bribe and the business advantage sought from the foreign official were 'not legitimately due'. The proposed amendments seek to repeal and substitute this offence in order to broaden the offence and remove restrictive requirements which have been considered an undue impediment to prosecution. The primary difficulty lays in complications in proving that bribe payments, often concealed as agents fees or the like, are not legitimately due.
The amended foreign bribery offence intends to rectify this obstacle by:
- removing the requirement that a benefit and business advantage must be 'not legitimately due' and replacing it with the concept of 'improperly influencing' a foreign public official;
- removing the requirement that the foreign official must be influenced in the exercise of the official's duties; and
- extending the offence to cover bribery to obtain a personal (i.e. non-business) advantage.
These changes draw from and bring Australia's foreign bribery regime closer to the approach taken in other jurisdictions such the UK, New Zealand, Canada and the USA.
Significantly for corporations, the proposed amendments also introduce a new strict liability offence of 'failing to prevent bribery' which mirrors Section 7 of the Bribery Act 2010 (UK). The offence is committed by a corporation where an 'associate' of the corporation engages in conduct in breach of the foreign bribery offence for the corporation's profit or gain. Companies will be automatically liable for the conduct of its 'associates' (as defined in the Bill) and the only defence is to show that it had 'adequate procedures' in place to prevent the commission of the foreign bribery offence. This will require corporations to ensure that their anti-bribery programmes remain current and responsive to their risk profile. Failure to do so, will mean that they will not have any defence to a charge of foreign bribery.
This new offence will likely be the subject of considerable debate in the coming months, particularly as the Australian Law Reform Commission (ALRC) indicated that it did not consider either the 'failure to prevent' offence and 'adequate procedures' defence to be the most effective means of tackling corporate criminal misconduct.
It is pleasing, however, to see that the Government has released draft guidance for public consultation to aid companies in creating these adequate procedures. Experience overseas, particularly in the UK and USA, has shown that clear guidance is necessary to developing an effective regime.
Submissions for this public consultation are sought by the end of February 2020. If you have had experience with similar regimes and wish to provide a submission please let us know if we may be able to assist.
Deferred Prosecution Agreement
Deferred Prosecution Agreements have been on the agenda in Australia for a number of years now. This is unsurprising given the regularity and effectiveness with which they have been used in other jurisdictions across the world.
The implementation of a DPA scheme for serious corporate crime is intended to encourage self-reporting of misconduct by corporations, to assist in addressing some of the challenges inherent in detecting, investigating and prosecuting serious corporate crime; and to offer corporations the opportunity to reduce the time, cost and uncertainty connected with drawn out investigations and prosecutions.
The scheme allows the Commonwealth Director of Public Prosecutions (CDPP) to invite a corporation that has engaged in serious corporate crime to negotiate an agreement to meet specified conditions. If the CDPP believes on reasonable grounds that the offence has been committed and that entering into a DPA is in the public interest it may then refer the agreement on to an 'approving officer' to be approved. The 'approving officer' may only do so if satisfied that the terms of the DPA are in the interests of justice and are fair, reasonable and proportionate.
If approved, with certain exceptions predicated on the 'interests of justice', the CDPP must publish the terms of the DPA within 10 days of the decision. This must include, inter alia, admissions of facts relating to the misconduct in issue, and involve payment of a financial penalty to the Commonwealth and disgorgement of profits or other benefits gained from the misconduct. Additional terms may include implementation of compliance programs, compensation for victims, charitable donations, or agreements for on-going cooperation with authorities.
Unlike the scheme's UK equivalent, however, there is no requirement that the reasons for approving the DPA be published. In this regard, some question remains as to whether sufficient precedential guidance will develop to inform what constitutes 'the interests of justice' and what is fair, reasonable and proportionate.
Where a person fulfils its obligations under a DPA agreement, the offences specified in the DPA will not subsequently be prosecuted whereas if the terms of a DPA are breached, the CDPP may commence prosecution or renegotiate the terms of the DPA with the person.
New definition of 'dishonesty'
Finally, the Bill repeals and replaces the existing definition of 'dishonest' in the Criminal Code. This represents an attempt to streamline the statutory definition with the test for dishonesty endorsed by the High Court in Peters v The Queen (1998) 192 CLR 493. 'Dishonest' is redefined to mean 'dishonest according to the standards of ordinary people'. This removes the subjective requirement under the current test and replaces it with a single objective question which does not examine whether the defendant had actual dishonest knowledge, belief or intent.
Over the years Australia has come under significant international criticism for its regime for tackling foreign bribery and corruption and has lagged behind many of its foreign counterparts. This Bill is clearly designed to bring Australia into line with recent developments. It will be interesting to see the speed with which it progresses into law, if at all.
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