Overview of Laws Against Foreign Bribery and Corrupt Practices

Friday 12 December 2014 @ 12.18 p.m. | Crime | Trade & Commerce

In recent years many governments have had to take action to counter bribery and corruption arising from less than ethical business practice, and, as a result, many governments have introduced anti-bribery legislation. Such laws have implications for the way Australian organisations operate both locally and across international borders.

Key Australian Legislation

Australia is a member of the Organisation for Economic Co-operation and Development (the OECD) Working Group on Bribery and a party to the key international conventions concerned with combating foreign bribery. The role of the OECD Working Group is to monitor implementation of the Anti-Bribery Convention and provide comprehensive information about global anti-corruption initiatives.

Australia's own anti-foreign bribery regime is subject to periodic review by the group which publishes a reports on each of its reviews which are available from the OECD website.

The key legislation in Australia with respect to foreign bribery is the Criminal Code Act 1995 (Cth) (the Criminal Code) which in the Schedule at Chapter 4 deals with the "integrity and security of the international community and foreign governments" and makes specific provisions relating to the bribing of a foreign public official.

The offence created by the Criminal Code in s 70.2 has a number of elements which all must be present for the offence to apply. For a person to be guilty of an offence under s 70.2 of the Criminal Code:

The First Step is:

  • the person provides a benefit to another person,
  • offers or promises to provide a benefit to another person, or
  • causes a benefit to be provided, offered or promised to another person

The Second Step is:

  • the benefit is not legitimately due to the other person

The Third Step is:

That the First Step was carried out with the intention of influencing a foreign public official (who may or may not be the other person) in the exercise of the official’s duties as a foreign public official in order to obtain or retain business or obtain or retain a business advantage which is not legitimately due.

The offence created by the legislation applies when the conduct constituting the offence occurs in whole or in part in Australia, or in whole or in part on board an Australian aircraft or an Australian ship.

The offence is also applied to conduct committed "wholly outside Australia" in three situations where, at the time of the alleged offence, the person who is alleged to have committed the offence is:

  1. an Australian citizen;
  2. a resident of Australia; or
  3. a body corporate incorporated by or under a law of the Commonwealth or of a State or Territory.

The offence applies regardless of the outcome or result of the bribe or the alleged necessity of the payment.

Key Legislation in USA and UK

In the USA the Foreign Corrupt Practices Act (the FCPA) is said to address bribery in two ways:

  1. Anti-bribery provisions, which prohibit the payment of money or anything of value to a foreign official in order to influence them to obtain or retain business; and
  2. Accounting provisions, which impose record keeping and internal control requirements with respect to company finances.

The Key legislation in the UK is the Bribery Act 2011 (the UK Act) which came into force on 1 July 2011 repealing all previous statutory and common law provisions in relation to bribery and replacing them with the crimes of bribery, being bribed, the bribery of foreign public officials, and the failure of a commercial organisation to prevent bribery on its behalf. The UK Act is described as "one of the broadest laws of its kind anywhere in the world" and for example, under the legislation, commercial organisations are liable for activities of associated third parties as well as those of their own staff.

How do Foreign Bribery Laws Affect Australia

In the case of both the FCPA and the UK Act commercial entities and businesses based in Australia can be subject to the FCPA or the UK Act if they carry on business, or part of their business, in the USA or the UK.

How to Protect Against Liability?

In a recent article published by Clayton Utz to its website it is stated that:

"As more and more Australian businesses continue to expand into offshore markets, and with the AFP declaring foreign bribery a key organisational priority, it is likely that there will be more foreign bribery prosecutions in Australia in coming years".

Australian businesses operating in either the USA or UK should have an anti-bribery and corruption (AB&C) framework in place to prevent and detect suspect activity, such procedures enabling an organisation or business to have adequate legal defence should an employee receive or give a  bribe.

More Australian legislation is in the pipeline and has been investigated by government but as yet has to emerge as a legislative proposal or bill, as the Clayton Utz article points out:

"In September 2011 the Commonwealth Government announced a commitment to developing a National Anti-Corruption Plan. Despite a public consultation process which concluded in 2012, a National Plan has yet to be released. Nevertheless, it is hoped that this will eventuate and that Australia will see a stronger and more cohesive approach to corruption."

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.

Sources:

Related Articles: