Anti-corruption developments in Australia

By Jane Ellis and IChing Lee, Blake Dawson Shanghai
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In November, the Australian government released a consultation paper seeking comment on its proposal to remove facilitation payments as a defence to the prohibition on paying bribes to foreign public officials. This follows the government’s announcement in September that it is committing funds to develop and implement Australia’s first national anti-corruption plan.

The anti-corruption regime

Jane Ellis Partner Blake Dawson Sydney
Jane Ellis
Partner
Blake Dawson Sydney

Australian law prohibits the bribery of domestic and foreign public officials. This prohibition is contained in the Criminal Code Act 1995. Contravening this law is a criminal offence.

In the wake of the Securency scandal – which earlier in 2011 saw the first arrests in Australia for the bribery of foreign public officials – Australia is taking an increasingly active role in fighting corruption. This includes:

  • reviewing its existing laws to ensure they continue to reflect Australia’s obligations under the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions;
  • leading a review of G20 priorities to strengthen international cooperation against corruption;
  • participating in a United Nations review of Australia’s compliance with the UN Convention against Corruption; and
  • taking a leadership role in the region by working with partner governments to further resist the threat from corruption.

This approach is reflected in comments by the minister for home affairs and justice, Brendan O’Connor: “Combating corruption and its effects at home and overseas contributes to global economic stability, encourages investment and maintains public confidence.”

Public consultation paper

IChing Lee Foreign lawyer Blake Dawson Shanghai
IChing Lee
Foreign lawyer
Blake Dawson Shanghai

The consultation paper was released as part of the National Anti-Corruption Plan. A link to the consultation paper is at: http://www.ag.gov.au/foreignbribery.

Facilitation payments

Under Australia’s foreign bribery laws, it is currently a defence if:

  • the payment is a lawful payment in the relevant country and/or required by law in the relevant country; or
  • the payment was a facilitation payment.

A facilitation payment is defined as follows:

  • the value of the benefit was of a minor nature;
  • the person’s conduct was engaged in for the sole or dominant purpose of expediting or securing the performance of a routine government action of a minor nature; and
  • as soon as practicable after the conduct occurred, the person made a record of the conduct (the details of which are prescribed by section 70.4 of the Criminal Code).

The facilitation payment defence has become an increasingly contentious issue in fighting global corruption. The OECD Working Group on Bribery calls it a “corrosive phenomenon” and is encouraging countries that are signatories to the OECD anti bribery convention (including Australia) to prohibit this defence.

If Australia removes facilitation payments as a defence, it will bring Australian anti-bribery laws broadly into line with those of the UK, among others. The UK Bribery Act, which came into force on 1 July 2011, prohibits all bribery, including facilitation payments. Removing the facilitation payment defence may increase the risk for those Australian companies and Australians who work in other countries and currently and routinely pay facilitation payments, as any payment that is made that is not legal in the country in which they are working will also be illegal in Australia.

Conversely, it could be argued that removing the facilitation payment defence, and therefore prohibiting all such payments, may reduce risk because any uncertainty as to what is a bribe and what is a facilitation payment would be removed.

If the facilitation payment defence is repealed, the government would also move to amend Australian taxation law to remove tax deductions for facilitation payments.

Other amendments proposed

The government is also seeking comment on:

  • whether it should remain necessary to identify the particular foreign public official who was influenced in order to establish an offence, or whether it would make prosecutions easier if the requirement that the prosecution must prove that an individual intended to influence a particular foreign public official is removed;
  • whether the amount of the bribe or benefit should be a relevant consideration when a court is considering whether the benefit was legitimately due to the foreign public official. Currently, in an attempt to ensure that bribery is prohibited irrespective of the value of the bribe, this value cannot be considered by a court; and
  • whether dishonesty should remain an element of the domestic corruption offences. The element of dishonesty is not present in the foreign bribery laws and the government is considering removing this element to make prosecutions of domestic bribery less difficult.

National anti-corruption plan

One perceived weakness of Australia’s anti-corruption regime has been the lack of a comprehensive anti-corruption plan or policy statement. The proposed national anti-corruption plan seeks to strengthen Australia’s existing regime by:

  • establishing a whole-of-government anti-corruption policy;
  • reviewing the current regime at federal, state and territory level in order to provide a comprehensive picture of the current regime;
  • designing strategies to counteract emerging corruption threats at all levels of government;
  • facilitating cooperation and coordination between the relevant agencies (which will operate under a cohesive national framework); and
  • engaging with international partners to strengthen global cooperation in fighting corruption.

Submissions on the consultation paper to the Attorney-General’s Department closed on 15 December 2011 and are currently under consideration. We will provide further legal updates on the results of the consideration and further anti-corruption developments in Australia in due course.

Jane Ellis is a partner in the Sydney office of Blake Dawson and IChing Lee is a foreign lawyer in the Shanghai office of Blake Dawson

Blake Dawson

Blake Dawson Shanghai office
Suites 3408-10, CITIC Square
1168 Nanjing Road West, Shanghai

Postal code: 200041
Tel: 86 21 5100 1796
Fax: 86 21 5292 5161

E-mail:
jane.ellis@blakedawson.com
iching.lee@blakedawson.com

www.blakedawson.com

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