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Clifford Chance

Clifford Chance

Regulatory Investigations and Financial Crime Insights

All good things come in threes? Draft legislation aimed at combatting foreign bribery in Australia comes around for a third time

A third iteration of the previously named 'Combatting Corporate Crime' legislation has entered parliament, with one notable change to the previous drafts. After two failed attempts to progress this legislation, is Australia finally going to see amendments to laws surrounding foreign bribery?

In 2017, the Liberal/National government announced a raft of proposed amendments to Commonwealth legislation to introduce new and severe penalties for combatting foreign bribery. That bill lapsed without being voted on in either house of parliament.

Then, in 2019, the re-elected Liberal/National government introduced a substantially similar bill, indicating it was keen to have this legislation introduced. The bill was given the green light in March 2020 to go forward by the relevant Senate committee. However, that bill also lapsed without any further action.

Both events left many scratching their heads, given the apparent overwhelming support from all camps. The changes were significant and would have brought Australia closer to some of their international counterparts when it came to combating foreign bribery. We commented about the delay back in 2021.

It seems that wait is now over. On 22 June 2023, a third revision of the legislation was introduced. The current Labor government has announced that the legislation demonstrates the government's commitment to combatting foreign bribery. The new draft legislation retains provisions found in the earlier drafts including extensions and clarification of the application of the current foreign bribery legislation to capture more people and more conduct and simplifying some key existing provisions.

The new draft also retains a new "failure to prevent" offence which will see companies liable for the actions of its associates (which can include officers, employees, agents or other service providers) unless they can provide evidence of "adequate procedures" being in place aimed at preventing the offending conduct. Time will tell what those adequate procedures need to involve but the legislation will require that guidance be published and it is likely that the guidance will be based on draft guidance issued in relation to the previous draft legislation. The government has indicated that it considers it necessary for companies to implement "robust and effective steps to prevent foreign bribery". It has been noted that ultimately, what is "adequate" will be a matter for the courts. The penalty for failing to prevent foreign bribery will include a fine of up to AUD 27.5 million.

However, there is one significant change to the 2019 bill – Deferred Prosecution Agreements (DPAs) do not feature. DPAs were a feature of the 2017 and 2019 proposed amendments and were not confined to foreign bribery offences. The previous government went so far as to seek public consultation on a draft DPA Code of Practice. The current government has noted that given the current legislation is "grossly inadequate" in dealing with foreign bribery generally, it is "premature to entertain the introduction" of DPAs and that the new amendments need to be "given time to work" before considering the addition of DPAs to the toolkit. Perhaps telegraphing that there is little likelihood of DPAs under the current government's watch, the government suggests that a DPA does not allow wrongdoers to "feel the full force of the law".

Whether that force will be felt must first see the passing of the new draft legislation. To repeat our comments from 2021, Australia remains waiting, waiting, waiting.

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