expand the civil penalty regime so that a number of new contraventions become civil penalty provisions; introduce ordinary criminal offences that sit alongside and complement a number of strict and absolute liability offences; introduce a new formula to calculate the maximum financial penalty for criminal offences in the Corporations Act; introduce and apply a new objective only test to all dishonesty offences under the Corporations Act; subject all offences with strict or absolute liability, and certain other offences, to a penalty notice regime; disgorgement remedies should be available in civil penalty proceedings brought by ASIC under the Corporations Act, ASIC Act and Credit Act; and require the courts to give priority to compensating victims over ordering the payment of financial penalties, aligning the Corporations Act with the ASIC Act and Credit Act. In coming to its recommendations, the Taskforce considered the application of the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, released by the Department and developed to assist the framing of criminal offences, infringement notices and enforcement provisions that are intended to become part of Commonwealth law. The Guide is accessible on the Attorney-General’s website. On 16 April 2018, the Government agreed to all these recommendations, except the maximum civil penalty amounts, where the Government considered a stronger response was necessary. Summary of new law The Bill introduces a stronger penalty framework to combat misconduct and improve community confidence in the corporate and financial sector. The amendments made by the Bill: update the penalties for certain criminal offences in ASIC administered legislation, including: increasing the maximum imprisonment penalties for certain criminal offences;
Maximum penalties provide a court with guidance on how to punish criminal behaviour. They restrict the court’s sentencing discretion as the court is unable to order a penalty in excess of the prescribed maximum penalty. The maximum penalty is generally reserved only for the most egregious cases. The existing maximum imprisonment penalties for a number of criminal offences do not currently reflect the seriousness of those offences. The maximum imprisonment penalty for a number of criminal offences in the Corporations Act, ASIC Act and Credit Act have been increased to reflect the seriousness of those offences, and to deter and punish such behaviour as appropriate. The increased penalties are consistent with penalties for similar offences in other jurisdictions. Offences where the maximum term of imprisonment has been increased are listed in the table below. – Offences where the maximum term of imprisonment has been increased Offence provision Current imprisonment term New imprisonment term Brief description Corporations Act 206A(1) 1 year 5 years Disqualified persons are not to manage corporations. 670A(3) 1 year 5 years Documents relating to takeovers, compulsory acquisitions and cannot be misleading or deceptive, or contain omissions, and are required to contain information that should have been included if a new situation has emerged. 708AA(10) 6 months 2 years Right issues that do not need disclosure. 708A(9) 6 months 2 years Defective documents. 792D(1) 6 months 2 years Market licensee is obligated to assist ASIC.
add a further element to the definition of ‘offence based on’; define ‘Part 7.7A civil penalty provision’; define ‘payment period’, in relation to infringement notices; define ‘relinquishment order’; and Define ‘subject to an infringement notice’. [Schedule 1, items 1 to 8, definitions in section 9 of the Corporations Act] Definitions have been inserted into subsections 5(1) and 12BA(1) of the ASIC Act to: define ‘contravention’ define ‘civil penalty provision’; make a consequential amendment to the definition of ‘infringement notice’ repeal the definitions of ‘infringement notice compliance period’ and ‘infringement notice provision’; and define ‘payment period’, pecuniary penalty order’, ‘relinquishment order’, and ‘subject to an infringement notice’. [Schedule 2, items 1 to 9, subsections 5(1) and 12BA(1) of the ASIC Act] Definitions have been inserted into subsection 5(1) of the Credit Act to: define ‘annual turnover’; amend the definition of ‘contravention’; and define ‘individual fine formula’, ‘infringement notice’, ‘payment period’, ‘relinquishment order’, and ‘subject to an infringement notice’. [Schedule 3, items 1 to 3, subsection 5(1) of the Credit Act] Definitions have been inserted into the Insurance Contracts Act to define: ‘annual turnover’; ‘civil penalty provision’; ‘contravention’; ‘infringement notice’; ‘involved’; ‘payment period’;