The Offence of Bribing a Foreign Public Official

The Criminal Code Act 1995 (Cth)(‘the Act’) is a piece of legislation that applies across Australia and contains offences relating to a wide range of criminal conduct.

Many of those offences relate to offences committed overseas, as well as cross-national conduct; in other words, that which occurs between parties both within and outside the nation.

The Offence of Bribing a Foreign Public Official

One of those offences is bribing a foreign public official, which is contained in section 70.2 of the Act and makes such conduct an offence punishable by a maximum penalty of 10 years in prison and/or 10,000 penalty units for an individual, or the greatest of 100,000 penalty units, 3 times any benefit derived from the conduct or 10% of annual turnover for a company.

At the time of publication, one Commonwealth penalty unit is equivalent to $313, which means the maximum penalty unit-based fine is $31,300,000.

To establish the offence, the prosecution must prove beyond reasonable doubt that the defendant:

1. Provided a benefit to another person, or caused a benefit to be provided to another person, or offered or promised to provide a benefit to another person, or caused an offer or promise of a benefit to be provided to another person, and
2. Did so intending to improperly influence a foreign public official in the exercise of his or her duties as a foreign public official, in order to obtain or retain business, or obtain or retain a business advantage that is not legitimately due.

 To make out the offence, the prosecution does not need to prove it was the defendant’s intention to influence a particular foreign public official, or that an advantage was actually obtained or retained.

The offence makes clear the following matters are irrelevant to any determination of whether a benefit or advantage was legitimately due:

• That the benefit was customary, or perceived as customary, to the particular situation
• That the benefit was minor, or
• That there was official tolerance of the benefit.

 Definition of Foreign Public Official

The definition of ‘foreign public official’ is also cast very broadly, encompassing:

• An employee or official of a foreign government body
• A person who performs contractual work for a foreign government body
• A person who holds or performs duties of an appointment, office or position under a law of a foreign country or part thereof
• A person who holds or performs the duties of an appointment, office or position created by custom or convention of a foreign country or part thereof
• A person who otherwise serves a foreign government body
• A member of the executive, judiciary or magistracy of a foreign country
• An employee of a public international organisation
• A person who performs contractual work for a public international organisation
• A person who holds or performs the duties of an office or position in a public international organisation
• A person who otherwise serves a public international organisation
• A member or officer of the legislature of a foreign country, or
• A person who is an authorised intermediary of a foreign public official, or holds himself or herself out to be the authorised intermediary of a foreign public official

 Limitations of Existing Offence

So, it may seem the existing offence of bribing a foreign public official casts a wide net capturing a broad range of bribery-related conduct.

However, according to Australian authorities, the offence is not broad enough. The problem authorities claim to be facing is that the existing offence requires prosecutors to prove that a company was in some way complicit in the conduct – for example, it was aware or should reasonably have been aware, and failed to take steps to prevent the conduct from occurring.

This, authorities assert, has proved to be extremely difficult and, for that reason, the government introduced legislation to insert a new offence into the Act.

The New Offence of Failing to Prevent Bribery of a Foreign Public Official

On 8 September 2024, the Crimes Legislation Amendment (Combating Foreign Bribery) Act 2024 inserted the new offence of failing to prevent bribery of a foreign public official into the Act.

The new section is found at section 70.5A and makes it an offence punishable by the greatest of 100,000 penalty units, 3 times any benefit derived from the conduct or 10% of annual turnover for a company to fail to prevent bribery of a foreign public official.

To establish the offence, the prosecution must prove beyond reasonable doubt that:

1. The defendant was a corporation,
2. An associate of that corporation committed the offence of bribing a foreign public official under section 70.2 of the Act, or engaged in conduct outside Australia which, if engaged in within Australia, would have constituted that offence, and
3. The associate did so for the corporation’s profit or gain.

The section makes clear the corporation may be found guilty of the offence whether or not its associated has been convicted of an offence under section 70.2 or a similar foreign offence.

An ‘associate’ is defined as:

• An officer, employee, agent or contractor,
• A subsidiary,
• A controlled entity, or
• A person or entity that performs services on the company’s behalf.

Legal Defences

It is important to be aware that there are a number of legal defences to bribery offences under the Act.

In that regard, a defendant is not guilty if it is established ‘on the balance of probabilities’ (that it was more likely than not) that he or she:

• Held a position with a foreign government, agency or body,
• The conduct occurred in that foreign country, and
• The conduct was lawful in that country.

Or that:

• The value of the benefit was minor,
• The conduct was for the sole purpose of expediting or securing the performance of a routine government action of a minor nature,
• A record was made of the conduct as soon as practicable after it occurred, and
• A copy of that record was retained, or the record was destroyed through actions that were out of the defendant’s control, or the prosecution was instituted more than 7 years after the conduct occurred.

In the context of failing to prevent bribery of a foreign public official, the Act makes clear a corporation is not guilty if it proves ‘on the balance of probabilities’ that it implemented adequate procedures to prevent the conduct.

In that regard, the Federal Attorney-General has issued guidance on matters relevant to establishing the implementation of adequate procedures.

These matters are categorised as:

• Fostering a control environment to prevent the conduct,
• Responsibilities of top-level management to prevent the conduct,
• Risk assessment procedures,
• Communication and training,
• Reporting suspicious conduct, and
• Monitoring and review.

General legal defences also apply to bribery charges, such as duress, which is where a person was compelled under threat of serious and unavoidable harm to themselves or persons close to them.

In the event evidence is raised of general legal defence, the onus then shifts to the prosecution to prove beyond a reasonable doubt that the defence does not apply in the circumstances of the case.

The defendant is entitled to an acquittal if the prosecution is unable to do this.

Implications of the New Offence

The offence of failing to prevent bribery of a foreign public official will, in practical terms, place a greater burden on corporations to ensure they have measures in place to reduce the likelihood of their employees, agents and subsidiaries engaging in such conduct, and increase the likelihood of corporations being criminally prosecuted for conduct of which they could not have been aware, and could not reasonably be expected to have been aware.

In that regard, companies would be well-advised to comply with guidance issued by the Attorney-General, as this could reduce the likelihood of being criminally prosecuted in the first place or, if charges are brought, of the proceedings being withdrawn.

Suspected of a Corporate or White Collar Offence?

If you or a company of which you are a director is being investigated for a suspected corporate or white collar offence such as bribery, call Sydney Criminal Lawyers 24/7 on (02) 9261 8881n to arrange a conference with an experienced defence lawyer with a proven track record of controlling any damage by working with investigators and prosecutors, as well as having charges withdrawn or dismissed if proceedings are nevertheless brought.