Australian regulators to increase focus on fighting bribery and corruption
The appointment of Tony Negus as the new Commissioner of the Australian Federal Police (AFP) and the restructure of the AFP to more effectively tackle organised crime has meant that fighting international corruption is likely to move up the agenda, according to Deloitte Financial Crime Lead Partner, Frank O’Toole.
“Issues placed higher on regulators’ agendas over the last few years have included anti-money laundering and economic and trade sanctions, and it may soon be a matter of when, not if, corruption and bribery issues also come under increased focus”, said Mr O’Toole.
“Increased regulator focus means that industry bodies and companies should be closely reviewing this issue and ensuring that the appropriate systems are in place to fight bribery and corruption, particularly in offshore operations.”
“Australia is perceived as one of the least corrupt countries in the world. However, recent high profile bribery cases have brought some of our offshore practices and the lack of enforcement of anti-bribery legislation under the spotlight,” he said.
Following the OECD Convention on Combating Bribery of Foreign Public Officials, ratified in 1999, it is an offence for any Australian citizen, resident or company to bribe a foreign public official. Amendments to Australia’s Criminal Code Act 1995 allow for maximum penalties of 10 years imprisonment and/or fines of $66,000 for individuals and $330,000 for companies found guilty of paying bribes to foreign government officials.
Australia has been criticised for its lack of action on bribery in the past. Transparency International’s 2009 OECD Anti-bribery Convention Progress Report admonished Australia for its minimal enforcement activity of anti-bribery legislation and recommended that Australia increase financial penalties for bribery. In response, the Federal Government is looking to pass a bill to increase fines to $1,100,000 for individuals and at least $11,000,000 for corporations.
“Australian companies doing business in high bribery risk countries and regions, particularly when using foreign agents as part of distribution channels, are particularly susceptible to investigation and prosecution related to corruption,” said Mr O’Toole. “However it is not just Australian legislation that Australians need to be aware of. Australians are increasingly at risk of prosecution under foreign corruption legislation, such as the US Foreign Corrupt Practices Act (FCPA).”
“Any individual who is involved in activities with a US nexus (settlement of US$ transfers or routing of emails through a US hub for example) which are used to further corrupt activity, may well become subject to the FCPA .”
Mr O’Toole said that the US Government’s increasing focus on enforcement of the FCPA against individuals and foreign parties, together with recent policy statements and potential legislative amendments aimed at incentivizing whistle-blowing and general cooperation with regulators, will likely result in an upward trend in cases being prosecuted, particularly in certain industries.
From an enforcement perspective, there is a definite change in the bribery landscape. “Coupled with recent mooted changes to whistleblower protection laws under the Corporations Act, increased publicity, and a revitalised investigative rigour, the increased focus on bribery and corruption warrants immediate attention by companies and industry bodies,” he said.
Download the attached pdf to read more information on corruption and current trends.