Mon, Apr 8, 2024
Since 2022, when Australia received its worst result in Transparency International's Corruption Perceptions Index (18th), the country has undertaken major reforms to its anti-corruption framework. Starting with the inception of the National Anti-Corruption Commission in 2023, Australia has now introduced a second major anti-corruption reform with the passing of the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 ("CFB Bill") on the 29th of February, 2024.
Coming into effect in the second half of 2024, the CFB Bill aims to broaden its reach and address criticism regarding the number of convictions for foreign bribery in Australia, which has seen three individuals and seven corporations convicted for foreign bribery in Australia since the enactment of foreign bribery laws in 1999.
The changes brought about by the CFB Bill in Australia are substantial. However, two changes stand out:
Other changes include that the definition of a foreign public official now includes candidates for office. The CFB Bill has also simplified the process of establishing wrongdoing by requiring proof of an "intention to improperly influence" a foreign official, rather than focusing on proving that a benefit was “not legitimately due”. Finally, the amendment now covers seeking personal advantages through bribery, not just business advantages.
The question remains on what constitutes “adequate procedures” to prevent bribery, with the CFB Bill providing that the Attorney-General must publish guidance on this matter. The Attorney-General´s guidance is expected to be heavily influenced by the UK Government's guidance that accompanies its "failure to prevent" offence under section 7 of the UK Bribery Act, which is composed of six key principles: Proportionate procedures, Top-level commitment, Risk assessment, Due diligence, Communication, Monitoring and Review.
Australian companies doing business overseas can expect increased scrutiny by the Australian authorities on their activities in other jurisdictions. Kroll foresees an increased number of prosecutions after the CFB Bill has broadened certain definitions to expand its reach and captured an increased number of behaviours and scenarios that constitute bribery of a foreign official.
Companies will be subject to increased penalties, consisting of the greatest of $31.3m, three times the value of the benefit obtained by the company or 10% of the company’s annual turnover.
The CFB Bill will come into effect in the second half of 2024, giving companies 6 months to prepare for its enactment. Kroll´s subject matter experts can assist you preparing for this new risk environment with:
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