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Australia’s Failure to Prevent Bribery Guidance

Author: Niall Hearty  8 July 2024
2 min read

Niall Hearty of Rahman Ravelli outlines information from the Attorney-General’s Department about the Combatting Foreign Bribery Bill.

Guidance has been issued in Australia regarding failure to prevent bribery.

The Attorney-General’s Department produced the information about the adequate compliance procedures that companies should put into practice as a defence against a potential charge of failure to prevent bribery. It has been subject to public consultation and the final version is expected to be released by the Attorney-General's Department later in the year.

The draft guidance was published two months after Australia’s House of Representatives and the country’s Senate approved the Combatting Foreign Bribery Bill. 

The Bill, which comes into effect from 8 September 2024, introduced a corporate offence of failing to prevent foreign bribery. The offence applies when anyone considered to be an associate of the business commits bribery for the company’s benefit. But it contains an adequate procedures defence, which applies when companies can show they had put steps in place to prevent bribery. 

The draft guidance states that a company’s anti-foreign bribery programmes must be “proportionate to the corporation’s operational circumstances”, including its foreign bribery risk and the nature of its activities. It recommends that companies of all sizes carry out a bribery risk assessment as “the basis for the design” of any relevant compliance programme. 

The guidance lists five indicators of an effective compliance programme: 

  • fruitful risk assessment and due diligence procedures
  • a robust culture of integrity within the company
  • a strong anti-bribery compliance function within the company
  • “demonstrated pro-compliance conduct by top-level management”
  • “careful and proper use” of third parties when dealing with foreign officials 

It also states that if a company finds out that foreign bribery has occurred, this does not necessarily mean that the company’s preventative measures were inadequate. 

It says: “Whether controls were adequate or inadequate will depend on the circumstances of each case, including whether the controls were effective and proportionate to the risk posed.’’

It adds that while the Australian government is legally required to publish the guidance, what constitutes “adequate procedures” will be decided on a case-by-case basis by the country’s courts.

The new Bill and the accompanying guidance come after failed attempts to reform Australia's foreign bribery laws during the last two parliaments. The first attempt, in 2020, saw the Attorney-General's Department release a version of draft guidance for consultation, which some companies have used when developing their compliance systems.

But the new draft guidance places more emphasis on the importance of conducting a robust risk assessment and provides stronger advice on how anti-bribery and corruption compliance functions should be devised and run. The new guidance makes clear the need for the regular involvement of top-level management. It also places more emphasis on documenting and reporting on due diligence procedures, and provides more detail regarding training, communication, whistleblowing and reporting and self-reporting procedures.

Niall Hearty C 07998

Niall Hearty

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Niall has a wealth of corporate crime expertise and an ability to coordinate global bribery and corruption cases. His achievements in such investigations have made him a logical choice for corporate clients.

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