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 Anti-Corruption & Bribery Laws
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 Australia's Anti-Corruption & Bribery Laws
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The Australian Criminal Code Act 1995 has provisions against the bribery of foreign public officials under Division 70 and bribery of Commonwealth public officials under Division 141.
These provisions prohibit the dishonest direct or indirect conferral of a benefit on a Commonwealth public official with the intention of influencing their exercise of duties as a Commonwealth public official and for bribery of a foreign public official for the purpose of obtaining or retaining a business advantage.
Government Officials
The Criminal Code Act 1995 defines a public official as a person who has had, or holds out to have had, conferred on them any authority, duty, function, or power as a public official. In addition, the Public Administration Act 2004 (Victoria) defines a public official as including:
a) A public sector employee;
b) A person employed under Division 3 of Part 6;
c) A Parliamentary officer within the meaning of the Parliamentary Administration Act 2005;
d) The holder of a statutory office or a prerogative office;
e) A director of a public entity- but does not include-
i) The Governor or the Lieutenant Governor;
ii) A judge, a magistrate, a coroner, or a member of VCAT;
A) A responsible Minister of the Crown or a Parliamentary Secretary;
B) The President of the Legislative Council or the Speaker of the Legislative Assembly;
C) A Ministerial officer employed under Division 1 of Part 6.
State-owned enterprises
In Victoria, under the Public Administration Act 2004, public sector employee means:
a) An employee; or
b) A person employed by a public entity or special body.
In Queensland, under the Public Sector Ethics Act 1994, the definition of public official is:
a) An officer or employee of a public sector entity; or
b) A constituent member of a public sector entity, whether holding office by election or selection;
however, does not include a judicial officer or local government councillor.
“public sector entity” means any of the following:
a) The Parliamentary Service;
b) The administrative office of a court or tribunal;
c) A department;
d) A local government;
e) A university, university college, State college, or agricultural college;
f) A commission, authority, office, corporation or instrumentality established under an Act or under State or local government authorisation for a public, State or local government purpose;
g) An entity, prescribed by regulation that is assisted by public funds;
however, does not include any of the following:
h) a GOC; (emphasis added)
ha) A corporatized corporation;
i) The following entities under, or within the meaning of, the Education (General Provisions) Act 1989:
i) A parents and citizens association;
ii) A school that is not a State school;
iii) An advisory committee;
iv) An international educational institution;
j) An entity prescribed by regulation.
It does not appear that the definition of public official extends so far as to cover state-owned enterprise employees for the purposes of application of the ‘receipt of benefit’ bribery provisions.
Candidates for public office
There is no relevant provision to this effect in the Criminal Code Act 1995, and it appears that the definition of public official does not extend to include candidates for public office; however, section 326 of the Commonwealth Electoral Act 1918 prohibits bribery for candidates of public office.
Bribery
The giving of a bribe is the dishonest direct or indirect conferral of a benefit on a Commonwealth public official with the intention of influencing their exercise of duties as a Commonwealth public official, whether or not the giver was aware that the receiver was a Commonwealth public official and was exercising the duties of a Commonwealth public official. Conversely, the definition includes a Commonwealth public official’s dishonest request or agreement to receive a direct or indirect benefit with the intention that the receipt will, or will be perceived to, influences the exercise of that official’s duties.
A benefit includes any advantage and is not limited to property.
Payer of the bribe
Section 141.1 (1) Criminal Code Act 1995 describes the offence relating to the giving of a bribe to a Commonwealth public official.
Recipient of the bribe
Section 142.1 (3) Criminal Code Act 1995 indicates that the receipt of a bribe is an offence, and so applies to recipients of bribes.
Legal Defences
Section 70.3 Criminal Code Act 1995 is a defence to the contravention of the bribery provisions under the Criminal Code Act 1995 where it can be shown that the act that is the subject of the contravention is actually permitted by written law in the relevant jurisdiction where the act occurred.
Exceptions, such as facilitation ( “grease”) payments
There is such an exception; occurring at section 70.4 of the Criminal Code Act 1995. In circumstances where the benefit conferred on the official was of a minor nature, with the intention of facilitating the performance of a minor, routine government action, and that benefit was recorded in accordance with the Criminal Code Act 1995, the person who conferred that benefit is not guilty of an offence.
Penalties
In the case of an individual’s conviction, liability extends to a penalty of up to AUD$1,100,000.00 and/or 10 years’ imprisonment.
In the event of a corporate conviction, the penalty is the greatest of the following:
  • AUD$11,000,000.00; or
  • 3 times the amount of the benefit reasonably attributable to the commission of the offence; or
  • 10% of the corporation’s annual turnover in the 12 months subsequent to the offence
Recent enforcements
It appears there have not been any convictions under the bribery and anti-corruption provisions of the Criminal Code Act 1995. However, in light of the relatively recent bribery convictions in China of Rio Tinto employees, and the earlier incidents involving the Australian Wheat Board and HIH, awareness is rising in Australia.
UN Convention against Corruption
Australia signed and ratified the UNCAC on 9 December 2003 and 7 December 2005, respectively. Australia has implemented the mandatory requirements and some non-mandatory requirements, as detailed in the Articles of UNCAC.
For example, the Criminal Code Act 1995 includes provisions relating to corrupting benefits given to Commonwealth public officials, abuse of public office, other dishonest acts involving Commonwealth public officials, and the bribery of foreign public officials.
Need More Information
Behan Legal advises and assists on these important issues. For an appointment, call 9646 0344.
Australian Anti-Corruption & Bribery Laws
 Australia's Anti-Corruption Laws
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Introduction to Australia’s Legal System

The Australian legal system is based on a fundamental belief in the rule of law, justice and the independence of the judiciary. Principles such as procedural fairness, judicial precedent, and the separation of powers are fundamental. Like the US and Canada, and distinct from the civil law systems that operate in regions such as Europe, South America and Japan, Australian jurisprudence is based on the common law system developed in the United Kingdom.

The Australian Constitution establishes a Federal system of government under which powers are distributed between the Federal Government, the States, and Territories. It defines exclusive powers (including the Federal Government's power to make laws on matters such as trade and commerce, taxation, defence, external affairs, and immigration and citizenship) and concurrent powers (where both tiers of government are able to enact laws). The States and Territories have independent legislative power in all matters not specifically reserved to the Federal Government. Federal laws apply to the whole of Australia. Where there is any inconsistency between Federal and State or Territory laws, Federal laws prevail.

In effect, Australia has nine legal systems – the eight State and Territory systems and one Federal system. Each of the Federal and State systems incorporates three separate branches of government – legislative, executive, and judicial. Parliaments make the laws, the executive government administers the laws, and the judiciary independently interprets and applies them.

Anti-Corruption Laws

Australia ratified the OECD Convention[1] on 18 October 1999 and subsequently implemented its provisions through domestic legislation coming into force on 17 December 1999. The Criminal Code Amendment (Bribery of Foreign Officials) Act 1999 inserted Division 70 into the Criminal Code Act[2], which criminalises the bribery of foreign officials. The law applies to conduct occurring in Australia or in a foreign country by an Australian resident or citizen, or a corporation incorporated in Australia.[3]

As a result of the amendment to the Criminal Code, it is a criminal act in the jurisdiction for a person to provide, offer to provide, promise to provide, or cause a benefit to be provided to another person to whom such a benefit is not legitimately due, with the intention of influencing a foreign public official in the exercise of his duties to obtain or retain business, or a business advantage,[4] that is not legitimately due to the recipient or intended recipient.[5]

Penalties for bribery offences

On 4 February 2010, the penalties for bribery of a foreign public official were increased.[6] If an individual is guilty of bribery of a foreign official under the Criminal Code, the offence is punishable by imprisonment for up to 10 years, a fine of up to 10,000 penalty units[7], or both. If the offence is committed by a corporation, the sanction is the greater of 100,000 penalty units or three times the value of the benefit gained by the bribe. However, if the value of the benefit obtained by the offence cannot be ascertained, the sanction may be set at ten percent of the annual revenue of the offending corporation.

Legislative defences to bribery offences

There are two affirmative defences to the bribery offence established by the Criminal Code.

1          Lawful conduct in country of foreign public official

If an accused person is able to prove that their conduct was required or permitted by local law in force at the time of the conduct in the jurisdiction where the conduct occurred, such proof constitutes a sufficient defence to a bribery charge under the Criminal Code.[8]

2          Facilitation payments

The Criminal Code defines ‘facilitation payments’ as minor benefits provided to a person for the dominant purpose of expediting or securing the performance of a routine government action of a minor nature, recorded by the provider of the benefit.[9]

The Criminal Code distinguishes between simple administrative government functions and business decisions made by foreign public officials when defining routine government actions.[10]

Corporate Criminal Responsibilities

The Criminal Code creates something close to strict liability for a corporation whose employee bribes. The law provides that the corporation is liable for offences committed by an employee or agent acting within their scope of employment or with apparent authority, where the company was expressly, or impliedly authorised the act.[11]

State Laws

Australia’s Constitution grants the States and Territories the power to make laws on any matter. The federal law on bribery of foreign officials specifically states “it is not intended to exclude or limit the operation of another law of the Commonwealth or any law of a State or Territory.”[12]  Several State criminal codes contain broad general bribery offences, which could be used to prosecute bribes paid to foreign officials; for example, the New South Wales Criminal Code[13]and the Australian Capital Territory Criminal Code.[14]Bribery is a common law offence in many of the States and Territories. While there is an obvious overlap between federal and regional laws, Australian authorities say this is the nature of a federal system and aver that State and Territorial law enforcement officials would be glad to turn over prosecutions to federal authorities.[15]

Section 286 Corporations Act 2001[16] contains a provision, similar to the United States Foreign Corrupt Practices Act (“FCPA”), that requires companies to keep books and records that correctly record transactions and that would enable the preparation of true and fair financial statements. Facilitation payments in the federal law are modelled on the FCPA. To qualify as an affirmative defence, a facilitation payment must be of a minor nature for a routine government act and be recorded on the company’s books. That is the federal law. However, these same payments are prohibited under most State criminal codes[17]

To increase awareness of the bribery law, the government published Bribery of Foreign Public Officials is a Crime[18], a pamphlet describing the legal consequences of violating the law for both companies and individuals.

Australia ratified the United Nations Convention against Corruption on 7 December 2005. In accordance with the Articles of the Convention against Corruption, Australia has implemented the mandatory requirements, and some non-mandatory requirements.[19]

Evaluation

From June 6 to June 10, 2005, the OECD Working Group on Bribery in International Business Transactions (“Working Group”) conducted its Phase 2[20]examination of Australia’s implementation of the OECD Convention and then issued a report with evaluations and recommendations, which offers helpful insights into the efficacy of Australia’s anticorruption legal regime. The Working Group liaised with and took advice from various institutions of Australia’s government and representatives of the judiciary, the legal profession, the private sector, and civil society. The Australian government then made its own follow-up report. The Working Group found that while the legal regime to police corruption and implement the OECD Convention was, for the most part, in place, enforcement lagged. No cases of bribery of foreign officials had been prosecuted. Only three investigations by the Australian Federal Police, the institution responsible for administering the federal law prohibiting bribery of foreign officials, had been initiated and one of them had been terminated. As of the date of the Working Group’s visit, no company or individual had been charged with the bribery of a foreign official. The Working Group noted that bribes had been tax deductible in Australia until recently and suggested that because tax auditors would not have paid attention to bribes before, they now be given specific instructions on how to identify bribes.[21] Those who knew or had suspicions about bribes being paid identified the lack of a sufficient whistleblower protection law as a problem because the absence of protection chilled the interest to report.[22]

While prosecutions for violations of the bribery laws may not have lived up to expectations of the Working Group, enforcement of the books and records provisions of the Corporations Act has had a somewhat better recent history: the Working Group reported 18 prosecutions between 1991 and 2005. Still, it criticized the low number of prosecutions and the lenient penalties provided by the law.

The Working Group made a few specific recommendations, which Australia accepts. Penalties for violating the bribery law have been increased.

The OECD Working Group should finalise its Phase 3 Review of Australia in October 2012, which, coupled with the recent UN review, will provide Australia with a foundation for its National Anti-Corruption Plan.[23]

Texts

A         The Criminal Code Amendment (Bribery of Foreign Officials) Act 1999, Division 70 of the Commonwealth Criminal Code Act

B         Section 286 Corporations Act 2001

C          Commonwealth Criminal Code (2001)

D         Bribery of Foreign Public Officials is a Crime

Contributors

Behan Legal

Patton Boggs

Piper Alderman



[1] For a description of the Convention, see Introduction of the Convention

[3] See Criminal Code s 70.5

[4] It is important to note that prosecution of this offence does not require proof that business, or a business advantage, ever actually materialised. See Criminal Code s 70.2(1A)

[5] There is specific direction in the legislation to judges to disregard any arguments of ‘custom’ that might be put forward by persons charged with these bribery offences. See Criminal Code s 70.2(2)-(3).

[6] Crimes Legislation Amendment (Serious and Organised Crime) Act 2010 (Cth)

[7]A penalty unit is 110 Australian dollars (AU$110).

[8] See Criminal Code s 70.3(1)

[9] Whilst there is an evidentiary burden on the alleged offender to prove that a benefit was a facilitation payment, the Criminal Code does not go so far as to require the record of the provision of the benefit to be produced, so long as there is a sufficient explanation for its non-production. There is also a prescribed format for the keeping of such records. See Criminal Code s 70.4

[10] See Criminal Code s 70.4(2)

[11] See Criminal Code Part 2.5.

[12] See Criminal Code s 70.6

[13] Crimes Act 1900 (NSW).

[14] Criminal Code 2002 (ACT)

[15] OECD Directorate for Financial and Enterprise Affairs, Australia: Phase 2 Report on the Application of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the 1997 Recommendation on Combating Bribery in International Business Transactions, January 4, 2006 (hereinafter, “Australia Working Group Report.” Website: http://www.oecd.org/daf/briberyininternationalbusiness/anti-briberyconvention/35937659.pdf

[16] Australia Working Group Report at 40 and Corporations Act 2001 (Cth)

[17] Australia Working Group Report at 41

[19] The Criminal Code has been amended to include provisions relating to corrupting benefits given to Commonwealth public officials, abuse of public office and other dishonest acts involving Commonwealth public officials. The UN review team assessed Australia’s implementation and enforcement in 2012, producing an Executive Summary detailing its results.

[20] The Working Group examines a country’s implementation of the OECD Convention in three separate on-site evaluations, called “Phases.” The Phase I examination of Australia took place in December 1999. The Phase 3 examination was conducted in June 2012; it typically takes the Working Group five months to produce its report.

[21] Australia Working Group Report at 29

[22]Australian Working Group Report at 31

[23] The National Anti-Corruption Plan is discussed in detail at the website of the Attorney-General of Australia- http://www.ag.gov.au/anticorruptionplan

 


  
 

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