Combatting Foreign Bribery – Australia expands its bribery of foreign public officials legislation

On 29 February 2024 the Australian Parliament passed the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2024 (CFB Bill). The new legislation will expand the scope of the offences that apply to bribery of foreign public officials and is designed to make prosecutions of foreign bribery offences easier.

The changes will take effect on 8 September 2024. Australian companies that conduct business overseas and contract with foreign governments should ensure their anti-bribery and corruption (ABC) frameworks are updated and remain fit for purpose.

Key features of the CFB Bill

The CFB Bill follows extensive Government consultations on improvements that could be made to Australia’s foreign bribery regime.

The new offence of failing to prevent foreign bribery

The most significant reform is the introduction of a new offence where businesses fail to prevent bribery of foreign public officials.

This offence will apply where:

• an associate of the company (which includes officers, employees, agents, contractors, subsidiaries and persons that perform services on the company’s behalf) commits the offence of bribing a foreign public official; and
• the associate does so for the profit or gain of the company.

This is a strict liability offence, meaning there is no need to establish that the company was at fault.

There is a defence available to companies, where the conduct was done by a ‘rogue’ associate. To have access to this defence, the company will need to establish they had ‘adequate procedures’ in place to prevent the commission of the offence. 

The Government previously released draft guidance in 2019 as to how companies can take steps to prevent foreign bribery by their associates. The Government is required under the CFB Bill to publish guidance in due course. While we await the final form of that guidance, the 2019 draft will assist businesses to make sure their anti-bribery and corruption frameworks are fit for purpose.

Changes to the scope of the bribery of foreign public official offence

The existing offence applies where a foreign public official is provided or offered a benefit (which is not limited to monetary or property benefits) ‘not legitimately due’ with the intention of improperly influencing them to obtain a business advantage.

Concerns were raised in the consultation process that it was very difficult for prosecutors to successfully establish that a bribe had been paid when it was concealed as a fee or commission that was ‘legitimately due’.

As a result of the amendments to the offence, prosecutors will no longer need to establish that the ‘benefit’ provided to the foreign public official was ‘not legitimately due’.

The reforms will expand the offence to also capture personal advantages (such as work visas, residency, scholarships, honours or monetary gain).

Expanded scope of foreign public officials

The existing regime is limited in its application to a person currently in office (whether political, public service, judiciary or government contractor).

The amendments will expand the definition of ‘foreign public official’ to capture persons either standing or nominated as a candidate for office.

New defence where benefits provided to candidates

To reflect the fact that candidates are now ‘foreign public officials’, persons can avail themselves of a new defence if the benefit provided to a candidate is provided wholly in a foreign country and is permitted under local law. In practice, this would ensure that political donations in the ordinary manner are permitted.

Deferred prosecution agreements left out

Previous iterations of the CFB Bill proposed the introduction of deferred prosecution agreements (DPAs) (similar to the UK model), to encourage companies to assist investigators in holding perpetrators of foreign bribery to account. 

This proposal was not included in the final version of the bill that was passed by Parliament as the Government expressed concern that the introduction of DPAs would create a two-tier criminal system for individuals and companies.

The Government has indicated that it may still consider introducing DPAs in the future. 

How are these changes relevant to my business?

These changes will potentially affect those Australian companies that operate in foreign jurisdictions and particularly those that deal with foreign governments.

Businesses should start taking steps now to:

• conduct risk assessments to identify high risk jurisdictions and consider whether additional precautions may be necessary to avoid breaching the failure to prevent foreign bribery offence; 
• update their anti-bribery and corruption frameworks to ensure these remain fit for purpose and reflect a culture of ‘doing responsible business';
• make sure their whistleblower processes are appropriate to encourage reporting of misconduct that constitutes foreign bribery; and
• provide all staff (and in some contexts, their contractors) with training on their anti-bribery and corruption frameworks and how they can report suspected misconduct.