Failure to Prevent Bribery of a Foreign Public Official

The intention being, that corporations will now be motivated to implement policies and procedures which will limit the ability for a person in their employ or an agent of the company to carry out an act of bribery.

If your company is alleged to have failed to prevent foreign bribery, it is important to receive expert advice as early as possible. We have acted in several foreign bribery cases, including in the Securrency Reserve Bank case. We have recently been involved in allegations of Foreign Bribery in the Pacific and others involving the jurisdictions of Singapore, Indonesia and Papua New Guinea.

Police Interview

Have you been contacted by the AFP or believe they may contact you soon? You should contact a lawyer to obtain legal advice before attending any Police Interview or providing documents. An interview is a critical part of the Police investigation which aims to gather evidence to be used against you. We can outline your rights and may be able to accompany you to the interview. Timely advice from an expert in the field can change the course the matter takes and can ensure that the best interests of the company are maintained from the outset.

The Law

The new offence can be found at Section 70.5A of the Criminal Code Act 1995, having been inserted into Subdivision C of the Act, by the Crimes Legislation Amendment (Combatting foreign bribery) Act 2024 (NO.5, 2024) – Schedule 1.

The elements are as follows:

1. A person (the first person ) commits an offence if:
   
   1. the first person is a body corporate:
      
      1. that is a constitutional corporation; or
      2. that is incorporated in a Territory; or
      3. that is taken to be registered in a Territory under section of the Corporations Act 2001; and
   2. an associate of the first person:
      
      1. commits an offence against section 70.2; or
      2. engages in conduct outside Australia that, if engaged in Australia, would constitute an offence (the notional offence) against section 70.2; and
   3. the associate does so for the profit or gain of the first person.
2. Absolute liability applies to:
   
   1. paragraphs (1)(a) and (c); and
   2. the circumstance in subparagraph (1)(b)(i) that the associate commits an offence against section 70.2; and
   3. the circumstance in subparagraph (1)(b)(ii) that the associate engages in conduct outside Australia that, if engaged in Australia, would constitute the notional offence.
3. To avoid doubt, the first person may be convicted of an offence against subsection (1) because of the commission by the associate of an offence against section 70.2 even if the associate has not been convicted of that offence.
4. Section 12.6 applies in relation to an offence against subsection (1) of this section as if the reference in section 2.6 to an employee, agent or officer of a body corporate included any associate of the body corporate.

Absolute Liability

Absolute liability is a legal concept where an individual or corporation can be held responsible for an offence regardless of intent or mental state.

Section 6.2 of the Criminal Code Act 1995 provides that:

1. If a law that creates an offence provides that the offence is an offence of absolute liability, as it has in this offence, it means that:
   
   1. there are no fault elements for any of the physical elements of the offence; and
   2. the defence of mistake of fact under section 9.2 is unavailable.
2. If a law that creates an offence provides that absolute liability applies to a particular physical element of the offence:
   
   1. there are no fault elements for that physical element; and
   2. the defence of mistake of fact under section 9.2 is unavailable in relation to that physical element.
3. The existence of absolute liability does not make any other defence unavailable.

Put in a simpler way, and applicable to this section, if a corporation has an associate who commits an act of bribery for the profit or gain of the company, the elements are made out.

Defences

A defence has been legislated at Section 70.5A(5) which provides that subsection (1) does not apply if the first person (the company) proves that they had in place adequate procedures designed to prevent:

1. the commission of an offence against section 70.2 by any associate of the company; and
2. any associate of the company engaging in conduct outside Australia that, if engaged in in Australia, would constitute an offence against section 70.2.

There are other defences that are available including a factual dispute around whether the associate did commit an offence against section 70.2 of the Criminal Code Act 1995 and whether the act of bribery was for the profit or gain of the company.

Meaning of Adequate Procedures

This will be assessed by the Court on a case by case basis taking into account all the surrounding circumstances. It will depend on the nature of the company, the role they play, and the degree of the failure to prevent bribery.

Standard of Proof

If you intend to pursue a defence under this section, you will be required to prove that the body corporate had adequate procedures designed to prevent the commission of the bribery offence by your associate. While the prosecution is required to prove the elements of the offence beyond reasonable doubt, you will be required to prove your case on the balance of probabilities. This is a lower standard of proof and is often described as meaning ‘more likely than not’.

Prosecutions of this type can often be very complex. Our lawyers are highly skilled at analysing the brief of evidence and identifying issues with their case. We will work closely with you to understand the intricacies of your company, its policies, procedures and culture to build a strong defence.

Geographical Jurisdiction

This offence has extra-territorial reach and can be committed by any Australian citizen, resident or corporation both inside and outside Australia if that conduct by an associate would constitute an offence against section 70.2 of the Criminal Code Act 1995.

The offence provisions are also captured by conduct of foreign corporations for acts committed inside Australia by an associate that constitutes an offence against 70.2 of the Criminal Code.

We have established international networks in Asia, Europe (primarily UK and Germany) and in the USA. We can utilise these networks to assist you in strongly defending the charges.

Examples of Failing to Prevent Bribery

The Attorney General’s Department has offered some examples of how this offence might be carried out. They include where:

• an agent of the corporation offered a bribe and it is shown that the corporation failed to create and maintain a corporate culture that required compliance with the laws against bribing foreign public officials
• the corporation’s top-level management or board of directors expressly, tacitly or impliedly authorised, or permitted the commission of, the foreign bribery offence by an agent of the corporation
• the corporation’s top-level management or board of directors expressly, tacitly or impliedly authorised, or permitted the commission of, the foreign bribery offence by an agent of the corporation
• an agent of the corporation offered a bribe and it is shown that a corporate culture existed within the corporation that directed, encouraged, tolerated or led to, the commission of the foreign bribery offence

What is the Maximum Penalty for This Offence?

Section (6) of 70.5A provides that an offence against subsection (1) is punishable on conviction by a fine not more than the greatest of the following:

1. 100,000 penalty units;
2. if the court can determine 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 notional offence, against section 70.2–3 times the value of that benefit;
3. if the court cannot determine the value of that benefit – 10% of the annual turnover of the first person during the period (the turnover period ) of 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.

The CDPP has vast resources to dedicate to these cases and they routinely ask the Court to place great weight on the application of general deterrence, punishment and denunciation of the conduct as part of the sentencing process. It is anticipated that corporations can expect heavy penalties for any breaches of this section.

Which Court Will the Matter Be Heard in?

This offence is an indictable offence and is likely to be heard in the County Court.

Our lawyers are well equipped to expertly guide your company through the Court process. If your company is alleged to have committed this offence contact Doogue + George Defence Lawyers to schedule a conference.