Australian foreign-bribery offences: Criminal Code Division 70 and failure to prevent

Division 70 framework

Division 70 of the Criminal Code (Schedule to the Criminal Code Act 1995) establishes the foreign-bribery offences that are administered by the Commonwealth. This framework implements Australia’s obligations as a signatory to the OECD Anti-Bribery Convention. The Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2024 reformed Division 70, with the changes taking effect from 8 September 2024. Foreign bribery offence: Criminal Code

Investigations into offences under Division 70 are conducted by the AFP, with prosecutions handled by the CDPP in conjunction with the Fraud and Anti-Corruption Centre. These offences relate to offering, promising, or giving benefits to foreign public officials or candidates in foreign elections to influence actions or decisions.

Penalties for individuals convicted of a Foreign bribery offence: Criminal Code can include imprisonment of up to 10 years. Corporate penalties are substantial, being the greatest of $31.3 million, three times the benefit received, or 10 per cent of the company’s annual turnover over a 12-month period.

Section 70.2 - bribing a foreign public official

Section 70.2 of the Criminal Code makes it an offence to provide, cause to be provided, or offer to provide a benefit to another person. From 8 September 2024, the offence applies where the benefit is intended to ‘improperly influence’ a foreign public official. This represents a significant change to the law, as it replaces the previous ‘not legitimately due’ test with a broader focus on improper influence. Sanctions compliance: DFAT framework

The benefit does not need to be received directly by the foreign public official; it can be provided to a third party. This means that indirect payments or favours can still constitute an offence under this section.

Critically, the law no longer requires proof that the intent was to influence a specific business decision. The test now centres on whether the benefit was intended to improperly influence the foreign public official.

Section 70.5A - failure to prevent

Section 70.5A introduces a new corporate offence of failing to prevent [Foreign bribery offence: Criminal Code]. This offence takes effect from 8 September 2024. A company is criminally liable if an ‘associate’ commits foreign bribery to gain a profit or advantage for the company.

The term ‘associate’ is broadly defined and encompasses officers, employees, agents, contractors, service providers, and other individuals performing services for or on behalf of the company. The offence operates under a strict liability standard for the company; establishing that an associate committed foreign bribery is sufficient to trigger liability, without requiring proof of corporate fault.

Penalties for this offence are substantial. The maximum corporate penalty is the greatest of $31.3 million, three times the benefit obtained from the foreign bribery, or 10% of the company’s annual turnover.

Adequate procedures defence

Section 70.5A(5) of the Criminal Code provides a potential defence for companies facing foreign bribery charges. This defence is available where the company had adequate procedures in place designed to prevent the commission of foreign bribery by associates. These procedures must be demonstrably effective in preventing such conduct. Sanctions compliance: DFAT framework

The Attorney-General’s Department has published guidance to assist companies in developing compliant compliance programs. This guidance outlines six key principles that should inform the design of these procedures: top-level commitment, risk assessment, proportionate procedures, due diligence, communication and training, and monitoring and review.

Importantly, the onus of proving the adequacy of these procedures rests with the defendant company. This means the company must demonstrate, on the balance of probabilities, that the procedures were in place and effective. While facilitation payments remain a statutory defence under section 70.4, they are narrowly defined and require meticulous record-keeping.