CTH Introduces Bill to Address Corporate Crime and Foreign Bribery

Friday 13 December 2019 @ 2.55 p.m. | Crime | Legal Research | Taxation

The Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 (Cth) (the “Bill”) was introduced to the Senate on 2 December 2019, by Senator Duniam, the Assistant Minister for Forestry and Fisheries and Assistant Minister for Regional Tourism, with the Bill currently before the Senate. The Bill proposes amendments to:

  • Criminal Code Act 1995;
  • Director of Public Prosecutions Act 1983;
  • 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.

An earlier version of the Bill was introduced in the previous session of Parliament, but lapsed on the dissolution of Parliament before the Federal Election.

The Bill

According to the Bill’s Explanatory Memorandum (“EM”), the proposed amendments contain:

“...measures to address challenges associating with detecting and addressing serious corporate crime. The opaque and sophisticated nature of serious corporate crime can make it difficult to identify and relatively easy to conceal. Investigations into corporate misconduct can be hampered by the need to process large amounts of complex data and conduct lengthy negotiations over claims of legal professional privilege.”

The Bill would introduce a new corporate offence for the failure to prevent the commission of a foreign bribery offence by an associate of a body corporate. However, the offence will not apply if the body corporate can show it had adequate procedures in place designed to prevent the commission of the foreign bribery offence.

Overview of the Proposed Amendments

The proposed amendments are contained in three Schedules.

  • Schedule 1 contains the main amendments affecting Criminal Code Act 1995, as well as containing measures to deliver a more effective response to serious corporate crime by amending the offence of “bribing a foreign public official” in Division 70 to the Criminal Code Act 1995. It also introduces a new offence of failure of a body corporate to prevent foreign bribery by an associate. Schedule 1 also makes consequential amendments to the Income Tax Assessment Act 1997 and Director of Public Prosecutions Act 1983;
  • Schedule 2 implements a Commonwealth Deferred Prosecution Agreements (“DPA”) scheme. Under the DPA scheme, the Commonwealth Director of Public Prosecutions (“CDPP”) can invite a person (other than an individual) that has engaged in serious corporate crime, to negotiate an agreement to comply with a range of specified conditions. Main amendments are to Director of Public Prosecutions Act 1983 while consequential amendments are to A New Tax System (Goods and Services Tax) Act 1999; Income Tax Assessment Act 1997; Administrative Decisions (Judicial Review) Act 1977 and Crimes Act 1914; and
  • Scheduled 3 introduces a general Definition of “dishonest” into the Dictionary to the Criminal Code Act 1995. Under the new Definition, “dishonest” is defined as “dishonest according to the standards of ordinary people”.

Comment and Reaction to the Bill

Introducing the Bill to Parliament, the Minister said:

“Corporate crime is estimated to cost Australia billions of dollars every year. It hurts business, our international reputation and our economic wellbeing. In particular. the harm caused by misconduct was laid bare in the landmark Royal Commission into the Banking, Superannuation and Financial Services Industry. This has shown us that we must continuously review and strengthen our enforcement frameworks to ensure early detection and strong deterrence of corporate wrongdoing.”

Attorney-General and Minister for Industrial Relations Christian Porter said in a Media Release:

“… foreign bribery needed to be stamped out as it helped to entrench corruption in developing countries and gave dishonest companies an unfair advantage over their competitors. Companies that view foreign bribery as simply the cost of doing business overseas are creating an uneven playing field which unfairly penalises businesses who do the right thing and play by the rules. This Bill addresses gaps identified by prosecutors and law enforcement agencies in existing legislation and will make it easier to investigate bribery offences and secure convictions.”

Mr Porter also noted that the Bill “puts the onus squarely on corporations to get their own houses in order by encouraging them to put effective controls and safeguards in place to prevent bribery from happening in the first place” and that the proposed changes outlined in the Bill “brings Australia into line with many of our major trading partners such as the United States and Britain, which have already taken significant steps to stamp out foreign bribery.”

The Attorney-General also cited the following examples where significant penalties were levied against major companies in overseas jurisdictions:

  • Rolls Royce paid financial penalties of approximately $US800 million following actions against them in the US, UK and Brazil;
  • In March 2019, MTS (the largest mobile telecommunications company in Russia) and its Uzbek subsidiary agreed to pay a combined total penalty of $US850 million to the US; and
  • In December 2017, Keppel Offshore Marine Ltd and its subsidiary agreed to pay a penalty of $US422 million to the US, Singapore and Brazil for its involvement arising out of a decade-long scheme to pay millions of dollars in bribes to officials in Brazil.

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