A new bill introduced in Australia’s Senate seeks to strengthen the country’s corporate crime laws with a host of new rules and the creation of a deferred prosecution agreement scheme(DPA) to promote self reporting.
The Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 contains a number of changes to Australian laws dealing with corporate crime.
A major change is with respect to foreign bribery charges. Under its provisions a new liability corporate offence has been introduced for failing to prevent foreign bribery, which is similar to one existing currently in in the UK .
This would imply that companies are automatically held liable for instances of foreign bribery carried out by associates like subsidiaries, employees, and contractors, unless it can be proven that adequate procedures were put in place to prevent bribery.
According to lawyers with law firm Herbert Smith Freehills, Jacqui Wootton, Tania Gray and senior Christine Wong, these reforms were significant and can greatly change Australia’s enforcement of laws related to foreign bribery and other corporate crime.
DPA Scheme Can help Transform Corporate Crime Detection
A critical part of the bill is that it clarifies the requirements needed for establishing foreign bribery offences .
Wong called the foreign bribery offence changes as the “stick” aspect of the reforms, with the DPA scheme acting as the “carrot”.
Under the DPA scheme companies will have the option to self-report whenever they identify an issue, either to the Australian Federal Police or to relevant regulators like ASIC. It also gives them an opportunity to enter into negotiations for settling the charges or to obtain a reduced penalty.
According to Wong, the DPA is a scheme to incentivize companies to report, which will increase the detection of such issues, and also help in their prosecution since companies might be more cooperative with the regulators .
Wootton also noted the DPA scheme is intended to increase the chances of foreign bribery being detected which is currently “really hard” for the government.
Apart from foreign bribery and money laundering related offences the bill will make DPA applicable to other offences under the Commonwealth Criminal Code and Corporations Act, such as domestic briber and sanctions. It would however exclude other crimes such as environmental, tax, cartel as well as workplace health and safety related offences.
The lawyers highlighted that DPA schemes had proven to be “transformative” in other countries particularly the US and the UK, in terms of authorities tackling corporate misconduct .
According to the layers the new mechanisms introduced in the bill will give Australian prosecutors “more flexibility” in how they can handles allegations and also in how they can hold companies accountable.
