Source: https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1718a/18bd105
Timestamp: 2019-11-18 04:57:51
Document Index: 431391184

Matched Legal Cases: ['art 1', 'art 2', 'art 3', 'art 1', 'art 3', 'art 2', 'art 3', 'art 3', 'art 3', 'art 1', 'art 1', 'art 2', 'art 2']

Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 – Parliament of Australia
Home Parliamentary Business Bills and Legislation Browse Bills Digests Bills Digests alphabetical index 2017–18 Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017
Bills Digest No. 105, 2017–18
PDF version [791KB]
Key issues and provisions: foreign bribery (Schedule 1)
Key issues and provisions: deferred prosecution agreements (Schedule 2)
Commencement: See page 3 of this Digest for details.
The purpose of the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 (the Bill) is to:
amend the Criminal Code Act 1995 (Criminal Code) to expand the scope of the existing foreign bribery offence and introduce a new corporate offence of failing to prevent foreign bribery (Schedule 1)
amend the Director of Public Prosecutions Act 1983 (DPP Act) to introduce a deferred prosecution agreement scheme for serious corporate crime (Schedule 2) and
make consequential amendments to the Income Tax Assessment Act 1997, A New Tax System (Goods and Services Tax) Act 1999, Administrative Decisions (Judicial Review) Act 1977 and the Crimes Act 1914.
Sections 1–3 will commence on Royal Assent.
The main amendments to the foreign bribery offence in Part 1 of Schedule 1, and the consequential amendment to the DPP Act in item 11 of Schedule 1 will commence six months after Royal Assent. The consequential amendments in items 12–15 of Schedule 1 will commence on the first 1 January, 1 April, 1 July or 1 October to occur after the end of the period of six months from Royal Assent.
The deferred prosecution agreement scheme in Schedule 2 will commence the day after Royal Assent with the exception of Part 2 which will commence on the first 1 January, 1 April, 1 July or 1 October to occur after the day the Act receives Royal Assent.
Australia ratified the Organisation for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Officials in International Business Transactions (Anti-Bribery Convention) in 1999.[1] It introduced Division 70 of the Criminal Code, which implements the key obligation of criminalising bribery of foreign public officials, the same year.[2] Currently, it is an offence to provide, offer or promise to provide, or cause a benefit to be provided to another person, with the intention of influencing a foreign public official in the exercise of his or her duties, in order to obtain or retain business, or a business advantage, that is not legitimately due to the recipient or intended recipient. To date, there have only been two foreign bribery prosecutions in Australia: one in which charges were laid against Securency International Pty Ltd and Note Printing Australia (NPA) Limited and six individuals (which remains before the courts) and another in which three individuals pleaded guilty to conspiracy to bribe a foreign public official to secure contracts for their construction company, Lifese, in Iraq.[3]
In April 2017, the Government released a consultation paper and exposure draft provisions of proposed reforms to Australia’s foreign bribery laws.[4] The consultation paper stated:
... Due to its nature, foreign bribery is inherently difficult to detect and enforce. Offending is often offshore, with evidence hard to identify and obtain. It can be easily concealed—with bribes disguised as agent fees or other seemingly legitimate expenses.
The offence in its current form poses challenges for typical cases of foreign bribery, which may involve the use of third party agents or intermediaries, instances of wilful blindness by senior management to activities occurring within their companies and a lack of readily available written evidence.[5]
The proposed reforms aim to remedy those shortcomings by:
expanding the definition of foreign public official to include candidates for office
providing that the foreign bribery offence is about ‘improperly influencing’ a foreign public official (instead of the current language which refers to a benefit being ‘not legitimately due’)
removing the requirement for a bribe to be provided, promised or offered so as to influence the foreign public official in the exercise of his or her official duties
expanding the foreign bribery offence to apply where a personal (as opposed to business) advantage is sought
clarifying that the advantage sought may be for someone other than the person providing, promising or offering a bribe
clarifying that the accused does not need to have specific business or a specific business advantage in mind and
creating a new corporate offence of failing to prevent foreign bribery.
The proposed new offence of failing to prevent foreign bribery is similar to an offence introduced in the United Kingdom in 2010 as part of an overhaul of its domestic and foreign bribery laws.[6] Under section 7 of the Bribery Act 2010 (UK), a commercial organisation is guilty of an offence if a person associated with the organisation bribes another person intending to obtain or retain business, or an advantage in the conduct of business, for the organisation.[7] It is a defence if the organisation can prove that it had adequate procedures in place to prevent persons associated with the organisation from engaging in bribery. As required under section 9 of the Bribery Act, the relevant minister has published guidance on procedures that commercial organisations can put in place to prevent bribery.[8]
The UK’s offence of failing to prevent bribery represented a novel approach to holding companies accountable for the conduct of their employees and other associates by extending corporate liability beyond traditional limits:
The main problem confronting prosecutors in this country today is how to put companies in the dock, together with those individuals who have behaved corruptly for their benefit.
In order to indict a company, we need to prove that at least one individual who was a 'controlling mind' of that company had been involved in the corruption.
In practice that means someone at or very close to Board level. You can immediately appreciate the difficulty in proving that especially in global companies where much of the decision making is devolved away from the Board.
The new Act sweeps away this requirement and introduces a new corporate offence of failing to prevent bribery.
This is a novel concept under English law and one which we are likely to see more of the years to come.[9]
The UK offence commenced in July 2011, but the first conviction was not obtained until December 2015, when Sweett Group PLC pleaded guilty to failing to prevent a bribe intended to secure and retain a contract in the United Arab Emirates. The company was ordered to pay £2.25 million in February 2016.[10] The UK’s Serious Fraud Office has since entered into deferred prosecution agreements with Standard Bank and another company in relation to this offence.[11] The first contested prosecution for the offence concluded in March 2018, with Skansen Interiors Limited being found guilty of the offence. One of Skansen’s former directors had previously pleaded guilty to foreign bribery and Skensen was unsuccessful in its argument that it had adequate procedures in place.[12]
Like the UK offence, the proposed corporate offence of failing to prevent foreign bribery in the Bill will impose liability on a corporation for the actions of a person associated with it unless the corporation can prove that it had adequate procedures in place to prevent such conduct. As is the case in the UK, the offence will be accompanied by a provision requiring the minister to provide written guidance on preventative measures.
OECD Working Group report on Australia’s compliance with the Anti-Bribery Convention
The OCED Working Group on Bribery adopted a report on the fourth evaluation of Australia’s compliance with the Anti-Bribery Convention in December 2017.[13] The Working Group identified several achievements and positive developments, including reforms passed since the previous assessment, establishment of the Fraud and Anti-Corruption Centre in the Australian Federal Police (AFP), establishment of the Fintel Alliance (a public-private partnership aimed at combating money laundering, terrorist financing and organised crime), and the engagement of AFP liaison officers around the world in foreign bribery investigations.[14] The Working Group also made 15 recommendations. With the exception of the recommendation to enact whistleblower protections for the private sector equivalent to those that apply to the public sector under the Public Interest Disclosure Act 2013, the recommendations did not relate to legislative reforms.[15] The Working Group noted but did not provide any assessment of the reforms proposed in the Bill, stating:
While as a matter of practice, the [Working Group] does not assess proposed legislation, the lead examiners acknowledge that the amendments introduced into the Australian Parliament in December 2017 are intended to clarify and strengthen Australia’s foreign bribery offence.[16]
According to the Oxford Dictionary of Law Enforcement a deferred prosecution agreement is an agreement that:
... charges will be laid but not proceeded with provided the organisation complies with a set of agreed terms and conditions, which may include, among other things, payment of a financial penalty, an account of any profits made from the alleged offence and the implementation of remediation and/or monitoring measures. The approval of the court is required for the DPA to come into effect. The court must decide if using a DPA is in the interest of justice.[17]
The proposal in this Bill to introduce a Deferred Prosecution Agreement Scheme (DPA scheme) is the first time Australia has considered having a scheme. The Attorney-General’s Department published a Public Consultation Paper in March 2017 entitled ‘Improving enforcement options for serious corporate crime: A proposed model for a Deferred Prosecution Agreement Scheme in Australia’, which followed an earlier public consultation paper one year earlier.[18] The Government sought to focus on options to develop an effective response to corporate crime by encouraging greater self-reporting by companies, and ultimately enhance the accountability of Australian business for serious corporate crime.[19] The 2017 Consultation paper proposed an Australian DPA scheme focused on reparation, remediation, financial penalties and on the implementation of effective compliance programs, and modelled aspects of the proposed scheme on the UK DPA scheme.[20]
DPAs in the United Kingdom[21]
In the United Kingdom DPAs are provided for under the Crime and Courts Act 2013 (UK).[22] This Act provides a non-exhaustive list of approved DPA terms to:
pay to the prosecutor a financial penalty;
compensate victims of the alleged offence;
donate money to a charity or other third party;
disgorge any profits made from the alleged offence;
implement a compliance programme or make changes to an existing compliance programme relating to policies or to the training of employees or both;
co-operate in any investigation related to the alleged offence; [or]
pay any reasonable costs of the prosecutor in relation to the alleged offence or the DPA.[23]
As stated above the list is non-exhaustive; the Act merely requires that the terms included in the DPA be ‘fair, reasonable and proportionate’.[24] The circumstances in which it would be appropriate to utilise a DPA are outlined in the DPA Code of Practice published by the Serious Fraud Office (‘SFO’) and the Crown Prosecution Service.[25] The full list of offences that are covered by the UK’s DPAs scheme are listed in Schedule 17 of the Crime and Courts Act 2013 (UK).[26]
The first step is to determine whether there is sufficient evidence to bring a prosecution.[27] Then, prosecutors assess whether it would be in the public interest to undertake a DPA rather than to prosecute.[28] Certain factors are listed within the code that would guide this analysis such as the past behaviour of the corporation and the extent of the cooperation of the company involved.[29] The court will then undertake a similar analysis to determine whether a DPA is in the public interest. The court will look at, among other things the seriousness of the offence, the value to the community of incentivising corporations to self-report offences, the attention that the corporation paid to compliance both before and after the offence, the impact of a prosecution on third parties and the extent to which the corporation has changed its culture and personnel.[30]
DPAs in the United States
By way of comparison, DPAs are also used in the United States and are not as detailed under statute as the UK model. Vicky Comino offers an excellent summary of the framework for DPAs in the United States of America. She states that ‘DPAs developed in the US as an administrative innovation of prosecutors’.[31] Although there is no statute that specifically addresses DPAs an indirect authority for prosecutors to enter into such arrangements is the Speedy Trial Act 1974 (US). This Act makes provision for the suspension of time limits upon cases where the:
... prosecution is deferred by the attorney for the Government pursuant to written agreement with the defendant, with the approval of the court, for the purpose of allowing the defendant to demonstrate his good conduct.[32]
This is as opposed to the UK model where guidance as to the content of DPA is derived from statute. In the US, the terms of a DPA are often borrowed from the United States Sentencing Guidelines for the relevant offences.[33] According to Eugene Illovsky DPAs typically include:
... some admission of wrongdoing, payment of fines, cooperation with the government, adoption of compliance programs and waiving of speedy trial rights and statute of limitations defences that would otherwise apply in respect of the identified offences.[34]
Guidelines for the use of DPAs have also been issued by the Department of Justice in the US Attorneys’ Manual, Principles of Federal Prosecution of Business Organisations and by the Securities and Exchange Commission in its Enforcement Manual.[35]
In proposing the Australian DPA Scheme, the Government considered the frameworks currently in use in the United States and United Kingdom, and the responses it received to the 2016 consultation paper.[36]
The Senate Standing Committee on Legal and Constitutional Affairs (L&C Committee) reported on its inquiry into the Bill on 20 April 2018.[37]The Committee made four recommendations, three of which mirrored recommendations made by the Senate Standing Committee on Economics, and the last of which was that the Bill be passed. Matters raised in submissions to the inquiry are discussed below under ‘Position of major interest groups’.
The Senate Standing Committee on Economics tabled the report on its inquiry into foreign bribery on 28 March 2018. The report included 22 recommendations, several of which are directly relevant to the Bill (both the foreign bribery reforms and the introduction of DPAs).[38]
Foreign bribery recommendations relevant to the Bill
Among the Committee’s recommendations were:
the definition of foreign public official be amended to include candidates for office (Recommendation 5)
the foreign bribery offence apply in circumstances where a bribe was made to obtain or retain a personal advantage (Recommendation 6)
a new corporate offence of failing to prevent bribery be enacted, and that principles-based guidance be published on steps corporations should take to implement adequate procedures to prevent foreign bribery (Recommendation 7) and[39]
the foreign bribery offence be amended to clarify that a person is prohibited from bribing a foreign public official to obtain a business advantage for someone else, and that the payer of the bribe need not intend to obtain or retain any specific business or business advantage to be guilty of the offence (Recommendation 10).[40]
The Bill would implement all of the above recommendations. The Committee did not make any recommendations relevant to the amendments in the Bill that will provide that the foreign bribery offence is about ‘improperly influencing’ a foreign public official (instead of a benefit being ‘not legitimately due’) and remove the requirement for a bribe to be provided, promised or offered so as to influence the foreign public official in the exercise of his or her official duties.[41]
The majority of the Committee also recommended that the ‘facilitation payments’ defence to the foreign bribery offence in the Criminal Code and related provisions in the Income Tax Assessment Act 1997 be ‘abolished over a transition period, to enable companies and individuals to adjust their business practices and procedures to comply with the law as amended’.[42] That recommendation was not supported by Coalition Senators.[43]
Deferred prosecution agreement recommendations
The Committee also made a number of recommendations about a deferred prosecution agreement scheme, specifically:
that the government introduce a deferred prosecution agreement scheme for corporations, supported by a strong legislative framework which requires strict compliance and allows for adequate responses in the event of a breach (Recommendation 11)
other than in exceptional circumstances, deferred prosecution agreements be published, together with details on how a company has complied with the terms and conditions, and any breach, variation or termination (Recommendation 12)
the Code of Practice make provision for the appointment and methodology of independent external monitors at the company’s expense to monitor compliance with a deferred prosecution agreement (Recommendation 13)
as part of the public consultation on the draft Code of Practice, the government publish an exposure draft and allow a period of no less than four weeks for stakeholders to provide comment (Recommendation 14).[44]
These recommendations are similar to those subsequently made by the L&C Committee’s inquiry into the Bill.[45]
The Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) raised two issues in its report on the Bill, both of which relate to the foreign bribery amendments in Schedule 1 to the Bill.[46]
Offence-specific defence to the foreign bribery offence
Item 7 of Schedule 1 to the Bill will insert proposed subsection 70.3(2A) to establish a new defence to the offence of foreign bribery in section 70.2 of the Criminal Code as amended by the Bill. The defence is similar to an existing ‘lawful conduct’ defence in subsection 70.3(1), which, broadly, provides that a person does not commit the offence of foreign bribery if a written law in force where a person’s conduct occurred required or permitted the provision of the benefit in question. However, the new defence will apply in relation to conduct related to candidates to be foreign public officials (it is consequential to an amendment to the definition of foreign public official to include candidates for office (item 4 of Schedule 1). As with the existing defences, a defendant wishing to rely on the new defence in proceedings for a foreign bribery offence will bear an evidential burden in relation to the matter (which would require adducing or pointing to evidence that suggests a reasonable possibility that the matter exists).[47]
The Scrutiny of Bills Committee recognised that the defendant will bear only an evidential rather than a legal burden, but nonetheless stated that it expected any reversal of the burden of proof to be justified.[48] It did not consider that the defence meets the criteria for offence-specific defences set out in the Government’s Guide to Framing Commonwealth Offences, and requested the Attorney-General’s advice as to why an offence-specific defence is proposed (as opposed to including the matter as an element of the offence).[49]
The Attorney-General responded that the defence is ‘consistent with the broader principle in Australian law of a defence of lawful authority’, for which a defendant bears an evidential burden, and is appropriate because the defendant would be in a better position to point to evidence of a written foreign law he or she relied on; it would be difficult and expensive for the prosecution to prove the non-existence of a foreign law and the question of whether a benefit was required or permitted under a written foreign law is not central to the question of culpability for the offence.[50]
The Scrutiny of Bills Committee still considered that the proposed defence does not appear to accord with the principles in the Guide to Framing Commonwealth Offences. It requested that the information provided by the Attorney-General be incorporated into the Explanatory Memorandum, drew its concerns to the attention of senators and left the question of the appropriateness of the proposed defence to the Senate as a whole.[51]
Preventing bribery of foreign public officials
Proposed section 70.5A of the Criminal Code (inserted by item 8 of Schedule 1) will create a new corporate offence of failing to prevent foreign bribery. An exception will apply if a corporation can prove that it had adequate procedures in place designed to prevent its associates (which include, for example, its employees and officers) from engaging in foreign bribery (proposed subsection 70.5A(5)). Proposed section 70.5B (inserted by the same item) will require the Minister to publish guidance on the steps that a body corporate can take to prevent its associates from bribing foreign public officials. The guidance will not be a legislative instrument.
The Scrutiny of Bills Committee queried the proposed interaction of the exception in proposed subsection 70.5A(5) and the guidance that the Minister will publish under proposed section 70.5B:
... It is not clear whether a body corporate that complies with guidance published by the minister would be determined to have 'adequate procedures' in place and therefore able to establish the defence in subsection 70.5A(5), or if a body corporate could comply with such guidelines but still be found by the courts to not have had adequate procedures in place.
The committee is concerned that, because the exception to the offence does not clearly articulate what would constitute 'adequate procedures', it has been left to ministerial guidance to clarify the limits of criminal liability with respect to the offence. This concern is compounded by the fact that the guidance will not be a legislative instrument.[52]
It requested the Attorney-General’s advice on whether it is possible that a body corporate that complies with the guidance could still be convicted of the proposed offence, and on why the guidance should not be in the form of a legislative instrument and subject to disallowance.[53]
The Attorney-General advised that the guidance would be principles-based rather than prescriptive:
It is reasonable to expect companies of all sizes to put in place appropriate and proportionate procedures to prevent bribery from occurring within their business. However, the application of steps to prevent foreign bribery will differ substantially from corporation to corporation ...
It is for this reason that I propose to provide guidance, rather than a legislated, prescriptive checklist of compliance. In this way, it will not be for Government to determine or clarify the limits of criminal liability with respect to the offence. This is appropriately a matter for courts, taking into account the circumstances of each case without the encumbrance of rigid statutory requirements.[54]
The Scrutiny of Bills Committee was satisfied with the Attorney-General’s response and requested that the information he provided be incorporated into the Explanatory Memorandum.[55]
At the time of writing this Bills Digest, the position of the non-government parties and independents was not known. However, members of the Senate Economics Reference Committee included non-government party representation and independents and that Committee’s recommendations supported, amongst other matters, the creation of a new foreign bribery offence and the deferred prosecution agreement scheme.[56] Further, the non-government members of the L&C Committee recommended that the Bill be passed.[57]
The positions taken by stakeholders in submissions to the L&C Committee’s inquiry into the Bill are summarised below. Further detail is set out in the ‘Key issues and provisions’ sections of the Digest.
Foreign bribery reforms
New corporate offence of failing to prevent bribery
The proposed new corporate offence of failing to prevent bribery was supported by the Uniting Church, the International Bar Association (IBA), Dr Vivienne Brand (of the College of Business, Government and Law at Flinders University), and the law firm Morgan, Lewis and Bockius.[58]
The Australian Institute of Company Directors (AICD) had ‘serious reservations’ about the offence.[59] Similarly, the Law Council of Australia (LCA) recommended that the offence be ‘reconsidered given a number of problematic features of the offence’.[60] However, the LCA noted that a minority among the members of the Foreign Corrupt Practices Committee of its Business Law Section supported the enactment of the offence.[61]
Professor Simon Bronitt and Zoe Brereton (of the TC Beirne School of Law at the University of Queensland) considered that there are ‘strong reasons to support’ the offence, but raised concerns about the application of absolute liability and the potential for the offence to become the ‘default’ offence used in all foreign bribery prosecutions.[62]
Reforms to the existing foreign bribery offence
The Uniting Church supported all of the proposed reforms to the existing foreign bribery offence.[63] These reforms were also supported by the LCA, AICD and the IBA, except:
the LCA, AICD and the IBA recommended that the current test of a benefit being ‘not legitimately due’ should be replaced by a ‘dishonesty’ test instead of the proposed amendment, under which the offence would apply if a benefit is offered or provided to another person with the intent to ‘improperly influence’ a foreign public official and
the LCA suggested an alternative amendment to that proposed for expanding the offence to cover bribery of foreign public officials in relation to actions outside of the official’s authority.[64]
Additional suggested reforms
The Uniting Church recommended that the Bill be amended to include an additional foreign bribery offence based on recklessness (the existing offence requires proof of intention).[65] The enactment of such an offence was among the proposed reforms in the Government’s April 2017 consultation paper, but has not been included in the Bill.[66] AGD’s submission to the L&C Committee outlined some of the considerations behind the decision not to proceed with such an offence:
The AFP and CDPP [Common wealth Director of Public Prosecutions] support the creation of such an offence, noting that it would effectively capture instances of wilful blindness by suspects, including senior company officers (such as directors). Most foreign bribery cases involve bribes paid by third parties in circumstances where the suspects (individuals and companies) are wilfully blind as to the activities of their agents (including employees, subsidiaries and third party agents). While the offence of failing to prevent foreign bribery would go some way to addressing this scenario, it is possible that companies and individuals may still be able to structure their affairs in ways which allow them to limit or avoid exposure to criminal liability for conduct that should be criminalised.
After balancing these arguments against other views expressed in submissions received in response to the April 2017 discussion paper, the Government elected not to proceed with a recklessness offence.
A number of submissions received in response to the 2017 discussion paper raised concerns that the offence would set too low a standard for culpability ...
Submissions also identified that a recklessness offence would be inconsistent with international standards ...[67]
The LCA and the IBA supported that offence being omitted from the Bill.[68]
The Uniting Church also suggested enactment of an additional offence criminalising the paying of bribes to third parties in order to win government contracts overseas, ‘such as bribing a competitor to put in an uncompetitive bid for the contract’.[69]
Morgan, Lewis and Bockius recommended the repeal of the ‘facilitation payments’ defence to the foreign bribery offence.[70] As noted above, the majority of the Senate Standing Committee on Economics recommended the repeal of this defence in its March 2018 report on foreign bribery.
The Uniting Church supported the introduction of a DPA scheme, seeing DPA’s as part of a suite of measures needed to deter, detect and prosecute corporate criminal behaviour with additional measures being whistleblower protection and reward in the private sector, a public beneficial ownership register and making it easier to for law enforcement agencies to prosecute money laundering offences. However, the Uniting Church did note there is reason to be cautious about the introduction of a DPA scheme and it should be subject to a review in five years’ time to assess its effectiveness.[71]
The Australian Institute of Company Directors recommended an amendment so that ‘determinations of a material contravention of a DPA by the Director of the CDPP are subject to merits review. It is in the interests of fairness and justice that a mechanism exists to confirm that determinations are correct and preferable’.[72]
The Law Council of Australia, whilst broadly supportive of the proposed scheme recommended:
a comprehensive program of education in relation to the finalised DPA scheme should be undertaken
the Australian Government should further investigate means by which a Commonwealth DPA could also resolve breaches of state and territory laws
the Australian Government should consider, and if necessary address whether the CDPP and the AFP have the full range of skills and experience to engage in corporate negotiation and compromise
the DPA scheme should include a delay of the limitation period in respect of any related civil proceedings that arise out of the offending conduct
independent corporate monitors should be engaged in appropriate cases. Where a monitor is engaged, consideration needs to be given to the need for confidentiality of their reports and findings. These reports should be confidential and not publicly available, unless required in proceedings for a breach of the DPA; and
the DPA scheme could also include a process for resolving disputes, including having an independent third party determine whether there has been a material breach of a DPA.[73]
Other stakeholders supported the creation of a new foreign bribery offence and the deferred prosecution agreement scheme in responses to the Government’s consultation papers in 2016 and 2017.[74]
The Explanatory Memorandum states that the Bill is ‘unlikely to have a significant impact on consolidated revenue’, but notes:
removing impediments to successful prosecutions for foreign bribery may result in increased recovery of penalties for the offence and
costs incurred by Commonwealth agencies as a result of the DPA process in Schedule 2 will be absorbed by these agencies. There will be other costs for the party to a DPA by way of financial penalties or compensation to Commonwealth agencies associated with the negotiation and administration of a DPA. DPAs may lead to the recovery of penalties in cases that may not have proceeded to prosecution.[75]
As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[76]
The Parliamentary Joint Committee on Human Rights considers that the Bill does not raise any human rights concerns.[77]
Division 70 of the Criminal Code criminalises providing, offering or promising to provide, or causing a benefit to be provided to another person, with the intention of influencing a foreign public official in the exercise of his or her duties, in order to obtain or retain business, or a business advantage, that is not legitimately due to the recipient or intended recipient. Currently, the main provisions are sections 70.1 (definitions), 70.2 (offence), and 70.3 and 70.4 (defences). Schedule 1 of the Bill will amend section 70.1, repeal and replace the offence in section 70.2 to make several amendments to it, amend the lawful conduct defence in section 70.3 and insert proposed subsection C, which will include the proposed new corporate offence of failing to prevent foreign bribery and related provisions.
Foreign public official is defined in section 70.1 of the Criminal Code. Item 4 of Schedule 1 will insert proposed paragraph (m) to expand that definition to also include ‘an individual standing, or nominated, (whether formally or informally) as a candidate to be a foreign public official’ covered by any of the existing categories of foreign public official listed in paragraphs (a) to (k) of the definition. These include, for example, an employee of a foreign government body, a member of the executive or the judiciary, a member or officer of the legislature of a foreign country or part thereof, and an employee of a public international organisation. The Explanatory Memorandum states that law enforcement experience indicates that bribes may be offered to candidates for public office with the intent of obtaining an advantage after the candidate takes office.[78] This amendment will implement recommendation 5 of the Senate Standing Committee on Economics’ report on foreign bribery.
Subsection 70.3(1) sets out the ‘lawful conduct’ defence to the foreign bribery offence in section 70.2. Broadly, the defence provides that a person does not commit the offence of foreign bribery if a written law in force where a person’s conduct occurred required or permitted the provision of the benefit in question. Item 7 will insert proposed subsection 70.3(2A) to establish a new defence that is similar to the existing defence in subsection 70.3(1), but which will apply in relation to conduct related to candidates to be foreign public officials. As with the existing defences, a defendant wishing to rely on the new defence in proceedings for a foreign bribery offence will bear an evidential burden in relation to the matter (which would require adducing or pointing to evidence that suggests a reasonable possibility that the matter exists).
Other amendments to the existing foreign bribery offence
Item 6 of Schedule 1 will repeal existing section 70.2 and replace it with proposed sections 70.2 and 70.2A. The key differences between the existing offence and the new provisions are that the offence will:
apply where a benefit is offered or provided to another person with the intent to ‘improperly influence’ a foreign public official (see further below), instead of the benefit being ‘not legitimately due’ to the person and intended to influence a foreign public official[79]
not be limited to instances where a benefit is offered or provided with the intent to influence a foreign public official in the exercise of the official’s duties[80]
also apply where a personal (as opposed to business) advantage is sought (this will implement recommendation 6 of the Senate Standing Committee on Economics’ report on foreign bribery)[81]
more clearly apply where an advantage is sought for someone other than the person providing or offering a benefit (this will implement the first part of recommendation 10 of the Senate Standing Committee on Economics’ report on foreign bribery) and[82]
apply regardless of whether the person offering the benefit intends to obtain or retain specific business or a specific advantage (this will implement the second part of recommendation 10 of the Senate Standing Committee on Economics’ report on foreign bribery).[83]
The maximum penalties that apply to individuals and bodies corporate will remain unchanged.[84]
Proposed section 70.2A will provide that the determination of whether influence is improper is a matter for the trier of fact, and provide guidance on matters relevant to that determination. Proposed subsection 70.2A(2) will lists matters that must be disregarded, specifically:
the fact that the benefit (or the offer or promise to provide the benefit) may be, or be perceived to be, customary, necessary or required in the situation
any official tolerance of the benefit and
if particular business or a particular advantage is relevant to proving the offence, the fact that the value of the business or advantage is insignificant (if that was the case), any official tolerance of an advantage, and the fact that an advantage may be customary, or perceived to be customary, in the situation.
These matters are equivalent to those that must currently be disregarded in determining whether a benefit or business advantage is ‘not legitimately due’ under subsections 70.2(2) and (3).
Proposed subsection 70.2A(3) will provide a non-exhaustive list of matters to which a trier of fact may have regard in determining whether influence is improper, such as the recipient or intended recipient of the benefit, the nature of the benefit, and whether the benefit was provided, offered or promised dishonestly. A trier of fact may also have regard to matters not specifically listed (proposed subsection 70.2A(4)).
Several stakeholders raised concerns with the concept of improper influence in submissions to the L&C Committee’s inquiry into the Bill. Consistent with their earlier submissions to AGD on the consultation paper and exposure draft provisions, the LCA, IBA and AICD each submitted that the current test of a benefit being ‘not legitimately due’ should instead be replaced by a ‘dishonesty’ test.[85] The LCA considered that the ‘novel and undefined’ concept of improper influence will introduce complexity and further uncertainty about the scope of the foreign bribery offence:
In contrast, the concept of 'dishonesty' is well-established and understood in Australian criminal law. The definition in Chapter 7 of the Criminal Code encompasses both a subjective and objective test, which would permit a trier of facts to make well-informed decisions with respect to the factual circumstances surrounding allegations of foreign bribery. Moreover, the concept of 'dishonesty' already applies to a range of other criminal offences, including the domestic bribery provisions in Division 141 of the Criminal Code. Accordingly, introducing this concept in relation to the foreign bribery offence would serve to harmonise the language of the bribery offences in the Criminal Code and provide greater certainty as to the operation of the provisions.[86]
Morgan, Lewis and Bockius suggested that consideration be given to including a high level definition of what constitutes improper influence in the Bill.[87]
AGD’s submission to the L&C Committee’s inquiry into the Bill noted that submissions it received on the consultation paper and exposure draft provisions were divided on the issue.[88] It provided the following rationale for preferring the concept of improper influence to dishonesty:
The Department, AFP and CDPP have closely considered the points raised in submissions. On balance, the Department considers that the proposed approach of ‘improper influence’ is preferable. Some bribery does not involve dishonesty. For instance, where a company provides an open ‘scholarship’ to the child of a foreign public official. The scholarship is not necessarily intended to have a ‘dishonest’ influence, if it is done transparently. However, it could still be done with the intention of improperly influencing the foreign public official in favouring the company when business is being awarded. The UK Law Commission has observed that not all bribes are ‘dishonest’ in the sense required. An advantage conferred may be ‘illegitimate, unreasonable, disproportionate or otherwise “improper” without being dishonest’. Proposed subsection 70.2A(3) of the Bill details matters that a trier of fact may have regard to when determining whether influence is improper (the list is non-exhaustive). These matters are based on the experience of foreign bribery investigators and prosecutors, and provide the trier of fact with relevant factors on which to inform his or her determination.[89]
Whether a benefit was offered or given dishonestly is among the listed matters in proposed subsection 70.2A(3) to which a trier of fact may have regard in determining whether influence is improper.
Removing the requirement of influencing a foreign public official in the exercise of the official’s duties
As noted above, the Bill would amend the foreign bribery offence so that it is not limited to instances where a benefit is offered or provided with the intent to influence a foreign public official in the exercise of the official’s duties. The LCA suggested that instead of simply omitting this requirement, the approach taken in the Bribery Act 2010 (UK) might be preferable.[90] Subsection 6(4) of that Act provides that references to influencing a foreign public official in the performance of his or her functions as such an official include any omission to exercise those functions and any use of the official’s position as such an official, even if not within official’s authority.[91]
New corporate offence of failing to prevent foreign bribery
Item 8 of Schedule 1 will insert proposed proposed subsection C of Division 70, which will include the proposed new corporate offence of failing to prevent foreign bribery and related provisions. As noted above, these provisions are similar to those introduced in the UK in 2010, and would implement recommendation 7 of the Senate Standing Committee on Economics’ report on foreign bribery.
Proposed subsection 70.5A(1) will create a new offence of failing to prevent bribery of a foreign public official that will apply to a body corporate if:
the body corporate is a constitutional corporation, is incorporated in a Territory, or is taken to be registered in a Territory under section 119A of the Corporations Act 2001 (proposed paragraph 70.5A(1)(a))
an associate of the body corporate commits an offence against section 70.2 or engages in conduct outside Australia that, if engaged in in Australia, would constitute an offence against section 70.2 (proposed paragraph 70.5A(1)(b)) and[92]
the associate does so for the profit or gain of the first person (proposed paragraph 70.5A(1)(c)).
Item 2 will insert a definition of associate into section 70.1. A person will be an associate of another person if the first-mentioned person:
is an officer, employee, agent or contractor of the other person
is a subsidiary of the other person (within the meaning of the Corporations Act) or
otherwise performs services for or on behalf of the other person.
The Explanatory Memorandum notes that ‘profit or gain’ will not be defined and provides an example of what is intended to be captured by the inclusion of this element of the offence:
It is intended these are broad concepts, in particular gain could include any sort of benefit or advantage to the body corporate. For example, it is intended to cover the situation where a company benefits merely because it is the beneficial owner of a subsidiary company that commits the foreign bribery offence.[93]
Absolute liability will apply to certain elements of the proposed offence (proposed subsection 70.5A(2)). This will mean that the prosecution will not be required to prove fault with respect to the body corporate (such as proving that the body corporate knew about or was reckless as to the associate’s conduct), and that the body corporate will not be able to raise a defence of mistake of fact.[94] Further, a body corporate may still be convicted of an offence against proposed subsection 70.5A(1), even if the associate has not been convicted of an offence against section 70.2 (foreign bribery) (proposed subsection 70.5A(3)).
However, to establish the proposed failure to prevent offence, the prosecution will need to prove that the associate committed an offence against section 70.2 (or engaged in conduct outside Australia that, if engaged in in Australia, would constitute an offence against section 70.2), including establishing the fault elements that make up that offence.[95] This would include establishing that the associate provided or offered a benefit, or caused the provision or offer of a benefit, with the intention of improperly influencing a foreign public official. It is possible that the prosecution may find it difficult in practice to prove beyond reasonable doubt that an associate, who may not have any connection with Australia, has engaged in conduct outside Australia that would constitute an offence in Australia, and did so for the profit or gain of the first person.
The Explanatory Memorandum includes justification for the application of absolute liability to elements of the proposed offence:
In this case, applying absolute liability to the above elements of the new offence is necessary to ensure the effectiveness of the new offence and the enforcement regime. This would ensure that the offence operates as intended, where the only way to avoid liability for the body corporate to avoid liability is by having adequate procedures in place, as explained further below. This is necessary to overcome challenges in establishing liability of corporate entities for foreign bribery, and to ensure that companies are not able to avoid possible liability through wilful blindness. The application of absolute liability to paragraph 70.5A(1)(a) is necessary as this aspect of the offence is a jurisdictional element. It is not appropriate to permit the defence of mistake of fact to the offence elements in paragraph 70.5A(1)(b). It is sufficient that the fault elements of the underlying conduct by the associate described in those subparagraphs would still need to be established by the prosecution.[96][emphasis added]
While a body corporate will not be able to raise a defence of mistake of fact, there is a specific exception to the offence of adequate procedures (outlined below) and a body corporate would still be able to raise other general defences provided for in the Criminal Code (except that a defence of intervening conduct or event will not be available if that conduct or event was brought about by an associate of the body corporate).[97]
Exception: adequate procedures
Proposed subsection 70.5A(5) will provide for an exception to the proposed new offence. The offence will not apply if the body corporate can prove that it had adequate procedures in place designed to prevent the commission of an offence against section 70.2 by any associate and to prevent any associate engaging in conduct outside Australia that, if engaged in in Australia, would constitute an offence against section 70.2. A body corporate will bear a legal burden in relation to this exception, meaning it will need to prove the matter to the standard of the balance of probabilities.[98]
While the Minister will publish guidance on the steps that bodies corporate can take to prevent an associate from bribing foreign public officials (see below), it will be up to a court to determine on a case-by-case basis whether a body corporate had adequate procedures in place. AGD stated that it expects the concept will be scalable, ‘depending on the relevant circumstances including the size of the body corporate and the nature of its business activities’.[99] The Attorney-General considered that ‘companies with effective and well integrated compliance regimes would not be convicted of the failure to prevent foreign bribery offence’.[100]
The maximum penalty for the proposed new offence will be the equivalent to that which currently applies to bodies corporate for the offence of foreign bribery under section 70.2. Proposed subsection 70.5A(6) will provide that the maximum penalty is a fine not more than the greatest of:
100,000 penalty units (currently $21 million)[101]
three times the value of the benefit that the associate obtained directly or indirectly, and that is reasonably attributable to the conduct constituting the offence (or that would have constituted the offence) against section 70.2 (if the court can determine that value) or
ten per cent of the annual turnover of the body corporate in the 12 months ending at the end of the month in which the associate committed, or began committing, the offence (or notional offence) against section 70.2 (if the court cannot determine the value of the benefit).[102]
Issues with the proposed offence
Some stakeholder submissions to the L&C Committee’s inquiry into the Bill raised concerns with the proposed new offence of failing to prevent foreign bribery. The Scrutiny of Bills Committee did not make a comment about the application of absolute liability.
Application of absolute liability/associate engaging in conduct for the profit or gain of the body corporate
The LCA, AICD, and Bronitt and Brereton raised concerns about the application of absolute liability to elements of the proposed offence. The AICD and Bronitt and Brereton raised general objections to the use of absolute liability in the offence and did not consider that it had been adequately justified. The AICD stated:
... in the absence of demonstrating adequate procedures to prevent foreign bribery of associates, a corporation will be liable under s 70.5A without the need for the prosecution to establish any culpability on the part of the corporation. Legislative use of ‘absolute liability’ requires strong justification and should only occur in limited circumstances. Given the seriousness of the proposed offence, its broad application, and the potential penalty and stigma of a conviction, the application of absolute liability to the offence is not adequately justified.[103]
Bronitt and Brereton considered that the application of absolute liability will mean that distinctions between more and less culpable conduct will be lost:
A corporation may fail to implement adequate procedures to prevent foreign bribery due to inadvertence, carelessness or ineptitude, but equally it may fail to prevent foreign bribery intentionally, knowingly, recklessly or dishonestly. Framed as a form of absolute liability, the FPFB offence is a blunt ‘catch all’ provision that does not differentiate between different degrees of corporate culpability.[104]
The LCA was concerned specifically with the application of absolute liability to the element of the proposed offence that the associate engaged in the conduct for the profit or gain of the body corporate (proposed paragraph 70.5A(1)(c), emphasis added). The LCA was concerned that it is not clear exactly what would need to be proved for the offence to be made out, and how that would be done:
The primary offence does not require that the associate does so for the profit or gain of the first person (the body corporate charged with the failing to prevent offence). Therefore, the circumstance of the associate doing so for the profit or gain of the first person is likely to be a contested matter. Further, proposed subsection 70.5A would allow a body corporate to be convicted because of the commission by the associate of a primary offence even if the associate has not been convicted of that offence. If the associate is not convicted of the offence, absolute liability should not apply to the corporation because mens rea will need to be proved on the part of the associate under paragraph 70.5A(1 )(c); it is not clear how this could be proved.[105][bold emphasis added]
Placing of a legal burden on the defendant to establish the adequate procedures exception
The LCA and the AICD did not consider it appropriate that the onus of proof be reversed in relation to establishing that a body corporate had adequate procedures in place to prevent foreign bribery. They both argued that if this matter is to be cast as an exception instead of as an element of the offence, that the defendant should bear only an evidential burden (which would require adducing or pointing to evidence that suggests a reasonable possibility that it had adequate procedures in place[106]) instead of the proposed legal burden.[107]
The LCA and the AICD were concerned that the definition of associate is too broad.[108] The AICD considered that the proposed definition could expose Australian corporations to ‘a serious risk of prosecution for the conduct of persons with which they have an association but not necessarily any actual or effective influence or control over’.[109] Conversely, the IBA considered that the definition may be too narrow:
[the term] should clearly and unambiguously capture conduct by an[y] natural or incorporated person, including any association (incorporated or unincorporated) or persons operating through a trust or any other structure designed or created to facilitate the relevant conduct in a manner to shield others from potential liability ... the question of whether the payer of the bribe performs services on behalf of a company should be determined by reference to all the relevant circumstances rather than what appears to be an exclusive list.[110]
Potential for the new offence to become the default for foreign bribery prosecutions
The AICD and Bronitt and Brereton expressed concern that the features of the proposed offence outlined above could mean that it will become the default or ‘go to’ offence for foreign bribery. The AICD considered that such an outcome would be ‘particularly problematic and unjust’ given it will carry the same maximum penalty as the existing foreign bribery offence but ‘does not require proof of fault on the part of the corporation’.[111] Bronitt and Brereton raised concerns about the potential combined impacts of the proposed offence and the introduction of DPAs:
As a broad ‘fallback’ offence, the FPFB offence is likely to assume a key role in DPA negotiations in foreign bribery cases. It is vital that negotiations over foreign bribery allegations do not inappropriately divert away from criminal prosecution cases of serious bribery (determined by assessing blameworthiness and harm) that would properly merit investigation, prosecution and punishment through the criminal justice system.[112]
Proposed subsection 70.5A(7) will provide that section 15.1 of the Criminal Code (extended geographical jurisdiction—category A) applies to the proposed new offence. One of the circumstances this will capture is where the conduct constituting the alleged offence occurs wholly outside Australia and the person is a body corporate incorporated by or under an Australian law.[113] Morgan, Lewis and Bockius suggested that jurisdiction should be expanded to also include corporations ‘carrying out business in Australia’. This would mirror the jurisdictional reach of the equivalent offence in the Bribery Act 2010 (UK).[114]
Guidance on preventing foreign bribery
Proposed subsection 70.5B will require the Minister to publish guidance on the steps that bodies corporate can take to prevent an associate from bribing foreign public officials, and provide that such guidance is not a legislative instrument. The Government stated that the guidance will be principles-based, and designed to be applicable to corporations of different sizes and operating in different sectors.[115] The Attorney-General stated:
It is reasonable to expect companies of all sizes to put in place appropriate and proportionate procedures to prevent bribery from occurring within their business. However, the application of steps to prevent foreign bribery will differ substantially from corporation to corporation—I do not consider it reasonable to expect small and medium-sized enterprises to put in place a compliance program of the same size that would be required of a large multi-national company. Similarly, a corporation with limited exposure to foreign bribery risk should not be expected to take mitigation measures as extensive as another corporation that has a significantly greater risk profile.[116]
The Government also stated that the guidance will be broadly consistent with the guidance the UK Government has published in relation to section 9 of the Bribery Act 2010 (UK):
This is in line with the preference Australian industry has expressed and will enable Australian companies that have already framed their anti-bribery policies on international guidelines to easily incorporate additional policies relevant to the Australian context.[117]
It committed to consult publicly on the guidance and review and incorporate stakeholder feedback.[118] The Senate Standing Committee on Economics recommended:
the Government publish an exposure draft of the guidance and allow a period of no less than four weeks for stakeholders to comment
the guidance be published with sufficient time before the commencement of the proposed failing to prevent bribery offence to allow corporations to implement necessary compliance measures and
the guidance should include the existence of internal corporate whistleblowing systems.[119]
On 8 December 2017, the CDPP and AFP created the Best Practice Guidelines on Self-Reporting of Foreign Bribery and Related Offending by Corporations.[120] This will complement the framework in the Bill for a Deferred Prosecution Agreement scheme.
Schedule 2 of the Bill establishes a Commonwealth Deferred Prosecution Agreement (DPA) scheme. The DPA scheme will allow the CDPP to invite a person (not an individual) that has engaged in serious corporate crime to negotiate an agreement to comply with a range of specified conditions.
If those conditions are complied with, it will not subsequently be prosecuted in relation to the offences specified in the DPA. A breach of the terms of a DPA may result in the CDPP commencing prosecution or renegotiating the terms of the DPA with the person.
Part 1 of Schedule 2 will make amendments to the Director of Public Prosecutions Act 1983 (DPP Act) including inserting a new function of the Director, in section 6 of the Act. Item 4 will insert new paragraph 6(1)(fb) to allow the Director to negotiate, enter into, and administer, on behalf of the Commonwealth, deferred prosecution agreements. Similarly, section 9 of the Act will be amended, by item 5, to authorise the Director to have the power to enter into a DPA and do all things necessary of convenient to be done for or in connection with negotiation, entering into or administering, a DPA.
Deferred Prosecution Agreement Scheme
Item 7 will insert into the DPP Act a new Part 3 consisting of proposed sections 17A-17L to outline the operation of the Deferred Prosecution Agreement Scheme.
Proposed section 17A will give the Director (of Public Prosecutions) the discretion to enter into an agreement for an offence mentioned in section 17B that is specified in the agreement. Under proposed subsection 17A(2) criminal proceedings must not be instituted against the person in relation to an offence specified in the agreement approved under section 17D. However, if the Director is satisfied that there has been a material contravention of the agreement or the person knowingly provided inaccurate, misleading or incomplete information to a Commonwealth entity in connection with the agreement, then subsection (2) does not apply (proposed subsection 17A(3).
Proposed section 17B is a key provision outlining, in a table, when a DPA may be entered into in relation to the offence against prescribed provisions. The Government proposes that an Australian DPA scheme should apply to a similar set of offences as those covered by the UK scheme. In its 2017 consultation paper, the Attorney-General’s Department stated:
Accordingly, we propose that DPAs be made available to corporations in the context of the following crime types:
forgery and related offences
exportation and/or importation of prohibited or restricted goods
specific offences under the Corporations Act, and
any ancillary offence relating to an offence to which the DPA scheme explicitly applies.[121]
The table in proposed section 17B reflects this with offences listed under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, Autonomous Sanctions Act 2011, Charter of the United Nations Act 1945, Corporations Act 2001, and the Criminal Code Act 1995.
Other provisions outline the content, approval and terms of a DPA (proposed sections 17C, 17D, 17E and 17F) and also include a limitation on the admissibility in proceedings of specific documents that are likely to be generated or provided to Commonwealth agencies during the course of DPA negotiations, and/or, in compliance with a DPA (proposed section 17H). This is to ‘encourage a person who is negotiating, or considering negotiating, a DPA to engage in full and frank discussions with the CDPP. To encourage a person to engage openly and honestly in negotiations, these protections apply regardless of whether the DPA negotiations ultimately results in a DPA.’[122]
Proposed section 17J will create a new offence if a book, document or thing is relevant to negotiating or complying with a DPA and a person (intentionally) causes that book, document or thing to be prevented from being used in negotiating, complying or as relevant evidence relating to the DPA. The penalty for an individual is five years imprisonment or 300 penalty units, or both. For a body corporate, the penalty for this offence of destroying evidence is 5, 000 penalty units ($1,050,000).
As noted above the L&C Committee inquired into the Bill and in its report of 20 April 2018, it recommended that the Bill be passed. In relation to the proposed DPA Scheme, the Committee recommended that as part of public consultation on the draft Deferred Prosecution Agreement Code of Practice, the government consider publishing an exposure draft which allows corporate stakeholders a four week period to provide comment.[123] The Government has noted that it ‘will consult publicly on proposed guidance material detailing how the scheme operates in early 2018’.[124]
While there are proposed mandatory conditions for DPAs in the Bill, Senator Rex Patrick made some Additional Comments in the L&C Committee’s report on the Bill, that ‘we need to avoid the possibility of a controversy within the CDPP because of ‘secret’ DPAS. We do not want to be establishing an independent assurance of DPAs program in the years to come.’[125] Senator Patrick further recommended that the discretion that the Director has to publish a version of a DPA that does not disclose the name of the person, should be removed (proposed subsection 17D(8)).[126]
In Part 2 of Schedule 2, Item 14 will make an amendment to the Income Tax Assessment Act to ensure that any loss or outgoing incurred by a corporation under a term of a DPA is not deductible under the Income Tax Assessment Act.
Further, in Part 3, amendments made to the Administrative Decisions (Judicial Review) Act will provide that that Act does not apply to decisions made under Part 3 of the DPP Act. Therefore, judicial review will not be available for decisions including the Director’s decision to enter into a DPA (proposed section 17A), not to publish or vary a DPA (proposed section 17D and 17F) and related decisions. The Explanatory Memorandum justifies the exemption on a number of grounds, including the voluntary nature of a party’s participation in the DPA scheme and the availability of traditional law enforcement mechanisms as an alternative to the DPA process.[127]
Item 17 of Part 3 to Schedule 2 will amend the sentencing consideration provisions in the Crimes Act by inserting proposed paragraph 16A(2)(fa) to require, at the time of sentencing, a court to consider the fact that a person entered into a DPA in relation to the offence and the extent to which the person complied, or failed to comply, with the terms of the DPA. The Explanatory Memorandum says that ‘this provision allows a court to impose a sentence that reflects the extent to which, if at all, the corporation maliciously exploited the DPA process to avoid prosecution’.[128]
[1]. Convention on Combating Bribery of Foreign Officials in International Business Transactions, opened for signature 17 December 1997, ATS [1999] No. 21 (entered into force for Australia 17 December 1999).
[2]. C Barker, Australia’s implementation of the OECD Anti-Bribery Convention, Background note, Parliamentary Library, Canberra, 7 February 2012.
[3]. For Securency and NPA see: Australian Federal Police (AFP), Foreign bribery charges laid in Australia, media release, 1 July 2011; AFP, Further charges laid in foreign bribery investigation, media release, 10 August 2011; N McKenzie and R Baker, ‘Printing man on bribery charges’, The Age, 13 September 2011, p. 3; AFP, Further changes laid in foreign bribery investigation, media release, 14 March 2013. Non-publication orders in place in Victoria prohibit the publication of certain details of these proceedings, including the outcomes of those that have concluded, in that state.
For Lifese, see: AFP, Man arrested for foreign bribery, media release, 20 February 2015; N McKenzie, R Baker and P Bibby, ‘Terrorist link to bribery charges’, The Sydney Morning Herald, 21 February 2015, p. 4; S Dalzell, ‘Mamdouh Elomar, father of IS fighter, to stand trial over alleged bribe to Iraqi official’ ABC News (online), 30 June 2016; J Sturmer, ‘Mamdouh Elomar, Ibrahim Elomar and John Jousif plead guilty to bribing foreign minister’, ABC News (online), 10 July 2017.
[4]. Attorney-General’s Department (AGD), Combatting bribery of foreign public officials: proposed amendments to the foreign bribery offence in the Criminal Code Act 1995, AGD, April 2017; Crimes Legislation Amendment Bill 2017: Exposure Draft.
[5]. AGD, Combatting bribery of foreign public officials: proposed amendments to the foreign bribery offence in the Criminal Code Act 1995, op. cit., p. 1.
[6]. T Edmonds, Bribery Bill [HL]: Bill No 69, Research paper 10/19, United Kingdom Parliament website, 1 March 2010.
[7]. Bribery Act 2010 (UK), section 7. ‘Associated person’ is defined in section 8.
[8]. Ministry of Justice (UK), The Bribery Act 2010: Guidance about procedures which relevant commercial organisations can put into place to prevent persons associated with them from bribing, Ministry of Justice, 2011.
[9]. R Amaee (Serious Fraud Office (SFO)), World Bribery and Corruption Compliance Forum, speech, 14 September 2010. See also V Robinson (General Counsel, SFO), Bribery Bill and anti-corruption: breakfast seminar with Grant Thornton, speech, 10 November 2009.
[10]. SFO, Sweett Group PLC sentenced and ordered to pay £2.25 million after Bribery Act conviction, media release, 19 February 2016. The amount comprised a fine of £1.4m and confiscation of £851,152.23: SFO, ‘Sweett Group’ SFO website, 12 May 2016.
[11]. SFO, ‘Standard Bank PLC’, SFO website, 1 June 2016; SFO, SFO secures second DPA, media release, 8 July 2016 (the second company has not been named due to ongoing related legal proceedings).
[12]. O Qureshi, A Wilkinson and I Fernandez, ‘UK’s first consideration of the Bribery Act’s adequate procedures defence’, FCPA Professor, Blog, 19 March 2018; J Ludlam, C Thomson and H Garfield, ‘UK: “Adequate procedures” and self reporting under the spotlight as jury rejects Section 7 defence’, Global Compliance News, 14 March 2018.
[13]. Organisation for Economic Cooperation and Development (OECD) Working Group on Bribery, Implementing the OECD Anti-Bribery Convention: phase 4 report: Australia, OECD, 2017.
[14]. Ibid., pp. 20–1, 32–3, 35, 57.
[15]. Ibid., pp. 57–9.
[16]. Ibid., p. 33.
[17]. G Gooch and M Williams, A dictionary of law enforcement, Oxford University Press, Oxford, 2015, accessed 2 March 2018.
[18]. AGD, Improving enforcement options for serious corporate crime: a proposed model for a Deferred Prosecution Agreement scheme in Australia: public consultation paper, AGD, Canberra, March 2017. See also, AGD, ‘Deferred Prosecution Agreements – Discussion paper’, AGD, Canberra, March 2016.
[19]. AGD, Improving enforcement options for serious corporate crime: a proposed model for a Deferred Prosecution Agreement scheme in Australia: public consultation paper, op. cit., p. 3.
[20]. Ibid., p.6.
[21]. This section draws heavily from the work of S Bronitt, ‘Regulatory bargaining in the shadows of preventative justice: deferred prosecution agreements‘, in T Tulich, R Ananian-Welsh, S Bronitt and S Murray, eds, Regulating preventative justice: principle, policy and paradox, Routledge, Abingdon, 2017.
[22]. Crime and Courts Act 2013 (UK), accessed 30 April 2018.
[23]. Crime and Courts Act 2013 (UK) chapter 22, schedule 17, part 1, section 5(3)(a)—(g) quoted in S Bronitt, Regulatory bargaining in the shadows of preventative justice, op. cit., pp. 213–4.
[24]. Crime and Courts Act 2013 (UK) chapter 22, schedule 17, part 1, subsections 7(1), 8(1).
[25]. The Serious Fraud Office and the Crown Prosecution Service (CPS) (UK), Deferred prosecution agreements code of practice, CPS and SFO, London, 2014.
[26]. See Part 2 – offence in relation to which a DPA may be entered into.
[27]. Ibid., p. 3.
[29]. Ibid, pp. 6–7.
[30]. Serious Fraud Office v Rolls Royce Holdings plc, Royal Courts of Justice, London, 17 January 2017, paragraph 20.
[31]. V Comino, ‘The adequacy of ASIC’s “tool kit” to meet its obligations under corporations and financial services legislation’, Company and Securities Law Journal, 34(5), 1 August 2017, p. 374.
[32]. Speedy Trial Act of 1974 18 USC subsection 3161(h)(2)(1974)(US); S Bronitt, Regulatory bargaining in the shadows of preventative justice, op. cit., p 212.
[33]. E Illovsky, ‘Corporate Deferred Prosecution Agreements: the brewing debate’, Criminal Justice, 21(2), 2006, p. 36.
[35]. United States of America, Department of Justice (DOJ), US attorneys manual, principles of federal prosecution of business organizations, DOJ; United States of America, Securities and Exchange Commission (SEC), Enforcement manual, SEC.
[36]. AGD, Improving enforcement options for serious corporate crime: a proposed model for a Deferred Prosecution Agreement scheme in Australia: public consultation paper, op. cit.
[37]. Senate Standing Committee on Legal and Constitutional Affairs, Report, Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, The Senate, Canberra, 2018.
[38]. Senate Standing Committee on Economics References Committee, Foreign bribery, The Senate, Canberra, March 2018.
[39]. Recommendations 8 and 9 related to the consultation process and timing recommended for the guidance. Recommendation 17 was that the guidance include the existence of internal corporate whistleblowing systems: Ibid.,
pp. 83–4, 131.
[40]. Ibid., pp. 61–3, 67–83, 85–7.
[41]. The Committee considered these amendments, but did not make recommendations on them: Ibid., pp. 63–7, 84–7.
[42]. Senate Standing Committee on Economics References Committee, Foreign bribery, op. cit., pp. 161–2 (Recommendation 18). The defence is set out in section 70.4 of the Criminal Code.
[43]. Ibid., p. 205. AusTrade explains that facilitations payments are ‘customary, unofficial minor payments to secure or speed a routine government action.’ Section 70.4 of the Criminal Code outlines how a facilitation payment can be a defence to bribery, for example where the value of the benefit was of a minor nature, the conduct was engaged in for the sole or dominant purpose of expediting or securing the performance of a routine government action of a minor nature and a record was made of the conduct.
[44]. Ibid., p. 111.
[45]. Senate Standing Committee on Legal and Constitutional Affairs, Report, Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, The Senate, Canberra, 2018.
[46]. Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee), Scrutiny digest, 1, 2018, The Senate, 7 February 2018, pp. 17–20.
[47]. Criminal Code Act 1995 (Criminal Code), section 13.3.
[48]. Scrutiny of Bills Committee, Scrutiny digest, 1, 2018, op. cit., p. 18.
[49]. Ibid.; AGD, A guide to framing Commonwealth offences, infringement notices and enforcement powers, AGD, Canberra, 2011, pp. 50–1.
[50]. Scrutiny of Bills Committee, Scrutiny digest, 3, 2018, The Senate, 21 March 2018, pp. 95–6.
[51]. Ibid., p. 96.
[52]. Scrutiny of Bills Committee, Scrutiny digest, 1, 2018, op. cit., pp. 19–20.
[53]. Ibid., p. 20.
[54]. Scrutiny of Bills Committee, Scrutiny digest, 3, 2018, op. cit., pp. 98–9.
[56]. Senate Standing Committee on Economics References Committee, Foreign bribery, op. cit.
[57]. Senate Standing Committee on Legal and Constitutional Affairs, Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, Report, op. cit. The non-government members of that Committee are Senator Louise Pratt (ALP), Senator Murray Watt (ALP) and Senator Nick McKim (Australian Greens).
[58]. Justice and International Mission Unit, Synod of Victoria and Tasmania, Uniting Church in Australia (Uniting Church), Submission to Senate Standing Committee on Legal and Constitutional Affairs (L&C Committee), Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, 22 January 2018, pp. 4–5; International Bar Association Anti-Corruption Committee (IBA), Submission to L&C Committee, Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, 23 January 2018, p. 2; V Brand, Submission to L&C Committee, Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, 7 February 2018, p. 1; Morgan, Lewis and Bockius LLP, Submission to L&C Committee, Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, 6 February 2018.
[59]. Australian Institute of Company Directors (AICD), Submission to L&C Committee, Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, 8 February 2018, pp. 2–5.
[60]. Law Council of Australia (LCA), Submission to L&C Committee, Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, 9 February 2018, p. 5 (see further pp. 7–9).
[61]. Ibid., p. 9.
[62]. S Bronitt and Z Brereton, Submission to L&C Committee, Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, 14 March 2018, pp. 6–8.
[63]. Uniting Church, Submission to L&C Committee, op. cit., pp. 2–3.
[64]. LCA, Submission to L&C Committee, op. cit., pp. 5–7; AICD, Submission to L&C Committee, op. cit., pp. 1–2; IBA, Submission to L&C Committee, op. cit., pp. 2–3.
[65]. Uniting Church, Submission to L&C Committee, op. cit., p. 2.
[66]. AGD, Combatting bribery of foreign public officials: proposed amendments to the foreign bribery offence in the Criminal Code Act 1995, op. cit., pp. 7–8.
[67]. AGD, Submission to L&C Committee, Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, n.d., pp. 6–7.
[68]. LCA, Submission to L&C Committee, op. cit., p. 6; IBA, Submission to L&C Committee, op. cit., p. 3.
[69]. Uniting Church, Submission to L&C Committee, op. cit., p. 3.
[70]. Morgan, Lewis and Bockius LLP, Submission to L&C Committee, op. cit.
[71]. Uniting Church, Submission to L&C Committee, op. cit., p. 9.
[72]. AICD, Submission, op. cit., p. 4.
[73]. LCA, Submission to L&C Committee, op. cit., pp. 10–11.
[74]. See for example, the submissions received by the Attorney-General’s Department in 2016. The submission to the 2017 consultation paper can be found here.
[75]. Explanatory Memorandum, Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017, p. 4.
[76]. The Statement of Compatibility with Human Rights can be found at page 6 of the Explanatory Memorandum to the Bill.
[77]. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 1, 6 February 2018, p. 78.
[78]. Explanatory Memorandum, p. 12.
[79]. Proposed paragraph 70.2(1)(b), replacing current paragraph 70.2(1)(b).
[80]. Current paragraph 70.2(1)(c).
[81]. Proposed paragraph 70.2(1)(b); current paragraph 70.2(1)(c).
[82]. Proposed paragraph 70.2(1)(b); current paragraph 70.2(1)(c).
[83]. Proposed paragraph 70.2(2)(b).
[84]. Proposed subsections 70.2(3) and (4); current subsections 70.2(4) and (5).
[85]. LCA, Submission to L&C Committee, op. cit., pp. 6–7; IBA, Submission to L&C Committee, op. cit., pp. 2–3; AICD, Submission to L&C Committee, op. cit., p. 2; LCA, Submission to AGD, Proposed amendments to the foreign bribery offence in the Criminal Code Act 1995, 8 May 2017, pp. 2–3; IBA, Submission to AGD, Proposed amendments to the foreign bribery offence in the Criminal Code Act 1995, 26 April 2017, pp. 3–5; AICD, Submission to AGD, Proposed amendments to the foreign bribery offence in the Criminal Code Act 1995, 8 May 2017, pp. 4–5.
[86]. LCA, Submission to L&C Committee, op. cit., p. 7. See also IBA, Submission to L&C Committee, op. cit., pp. 2–3; AICD, Submission to L&C Committee, op. cit., p. 2.
[87]. Morgan, Lewis and Bockius, Submission to L&C Committee, op. cit.
[88]. AGD, Submission to L&C Committee, op. cit., p. 5.
[89]. Ibid. Footnote references have been omitted from this quotation and can be viewed in the source document.
[90]. LCA, Submission to L&C Committee, op. cit., p. 9.
[91]. Bribery Act 2010 (UK), subsection 6(4).
[92]. The Explanatory Memorandum, states that inclusion of conduct outside Australia that, if engaged in in Australia, would constitute an offence against section 70.2 is intended to cover ‘situations where a subsidiary of a body corporate engages in conduct abroad that would constitute the foreign bribery offence’ (p. 17).
[93]. Explanatory Memorandum, p. 17.
[94]. Criminal Code, section 6.2.
[95]. Explanatory Memorandum, pp. 17–18.
[96]. Ibid., p. 18.
[97]. Proposed subsection 70.5A(4) and sections 10.1 and 12.6 of the Criminal Code. Defences of general application to Commonwealth criminal offences are set out in Part 2.3 of the Criminal Code
[98]. Criminal Code, sections 13.4 and 13.5.
[99]. AGD, Submission to L&C Committee, op. cit., p. 9.
[100]. Scrutiny of Bills Committee, Scrutiny digest, 3, 2018, op. cit., p. 99.
[101]. The value of a penalty unit is set by section 4AA of the Crimes Act 1914, and is currently $210.
[102]. Proposed section 70.5C (equivalent to current subsection 70.2(6) and (7), which will be repealed) will set out the meaning of annual turnover.
[103]. AICD, Submission to L&C Committee, op. cit., p. 3.
[104]. Bronitt and Brereton, Submission to L&C Committee, op. cit., p. 7.
[105]. LCA, Submission to L&C Committee, op. cit., p. 8.
[106]. Criminal Code, section 13.3.
[107]. LCA, Submission to L&C Committee, op. cit., p. 8; AICD, Submission to L&C Committee, op. cit., pp. 3–4.
[109]. AICD, Submission to L&C Committee, op. cit., p. 3.
[110]. IBA, Submission to L&C Committee, op. cit., p. 3.
[111]. AICD, Submission to L&C Committee, op. cit., p. 3.
[112]. Bronitt and Brereton, Submission to L&C Committee, op. cit., p. 8.
[113]. Criminal Code, paragraph 15.1(1)(c).
[114]. Bribery Act 2010 (UK), section 7.
[115]. Scrutiny of Bills Committee, Scrutiny digest, 3, 2018, op. cit., p. 98.
[116]. Ibid., p. 99.
[117]. Ibid. See also AGD, Submission to L&C Committee, op. cit., p. 9.
[118]. Ibid.
[119]. Senate Standing Committee on Economics References Committee, Foreign bribery, op. cit., pp. 83–4, 131 (Recommendations 8, 9 and 17).
[120]. Commonwealth Director of Public Prosecutions, Self-reporting of foreign bribery and related offending by corporations, 8 December 2017.
[121]. AGD, ‘Improving enforcement options for serious corporate crime: a proposed model for a Deferred Prosecution Agreement scheme in Australia: public consultation paper’, op. cit., p. 6. The Attorney-General’s Department further noted that it is continuing to assess whether other crime types (such as environmental crime, tax offences, cartel offences and offences under workplace health and safety legislation) should be included in a DPA scheme.
[122]. Explanatory Memorandum, p. 27.
[123]. Senate Standing Committee on Legal and Constitutional Affairs, Report, op. cit., p. 34.
[124]. G Brandis, ‘Second Reading Speech: Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017’, Senate, Debates, 6 December 2017, p. 9908.
[125]. Senate Standing Committee on Legal and Constitutional Affairs, Report, op. cit., p. 36.
[126]. Ibid., p. 37. Senator Patrick also made recommendation that full publication of a DPA must occur once concerns that it is not in the interests of justice are no longer present. Proposed subsection 17D(10) allows the Director to do so, if the Director considers that it would be in the interests of justice to publish the DPA.
[127]. Explanatory Memorandum, p. 32.
[128]. Ibid., p. 33.