Leslie Massey
Bribery is a serious criminal offence in Australia, with severe penalties for those who breach the country's anti-bribery and corruption laws. While corruption and bribery are largely state matters in Australia, the country has also ratified several international treaties and conventions, such as the OECD Convention and the UNCAC, which require the criminalisation of bribery. The Australian government works actively with foreign governments and law enforcement agencies to stamp out bribery and corruption, both domestically and abroad, and has introduced legislation to simplify and broaden the prosecution of bribery offences.
| Characteristics | Values |
|---|---|
| Bribing foreign officials | Illegal |
| Bribing domestic public sector officials | Illegal |
| Bribing in the private sector | Not a federal crime, but illegal in some states and territories |
| Penalties for individuals | Imprisonment for up to 10 years and/or a fine of up to $2.1 million |
| Penalties for corporations | Fine of up to 100,000 penalty units or 3 times the value gained from the benefit, or 10% of the company's annual turnover if the value cannot be determined |
| Facilitation payment defence | Permitted under Australian law, but controversial |
| OECD Working Group on Bribery recommendation | Prohibiting facilitation payments |
| Australian Federal Police role | Investigating foreign bribery |
| Australian government's stance | Zero tolerance for foreign bribery, active collaboration with foreign governments to eradicate bribery |
| Treaties and conventions | OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (ratified in 1999); United Nations Convention against Corruption (signed in 2003, ratified in 2005) |
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What You'll Learn
Bribing foreign officials is illegal
Bribery and corruption are largely state matters in Australia, with each state and territory criminalising both public and private sector bribery. However, the Australian federal government has laws prohibiting the bribery of federal and foreign public officials.
Bribing foreign public officials is a serious criminal offence in Australia, carrying heavy penalties for individuals and corporations. The offence is contained in section 70.2 of the Criminal Code Act 1995 (Cth) (Criminal Code). A person is guilty of the offence if they intentionally provide, offer, or promise a benefit to another person, or cause a benefit to be provided, with the intention of improperly influencing a foreign public official to obtain or retain business or personal advantage.
The definition of a "foreign public official" is broad and includes government employees or officials, members of the executive, legislature, or judiciary of a foreign country, candidates or nominees for foreign public office, and individuals performing official duties under foreign law or providing public services as defined in foreign law.
Australian businesses operating offshore must comply with foreign bribery laws and understand that making facilitation payments is illegal in most countries. These are unofficial payments to speed up or secure routine government action. While permissible under Australian law, such payments are often illegal under foreign laws and expose companies to bribe requests.
Australia actively works with foreign governments to enforce anti-bribery measures and has introduced reforms to simplify and broaden the prosecution of foreign bribery.
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Penalties for individuals and companies
Bribery is a serious crime in Australia, and the country has been actively investigating suspected bribery within and outside its borders. Australian individuals and corporations can be prosecuted under Australian law and foreign laws for bribing foreign officials.
Individuals found guilty of bribery offences are generally liable to a maximum of between three and ten years of imprisonment, a fine, or both. The penalty varies depending on the nature of the offence, with intentional offences carrying a higher penalty than offences of recklessness. For instance, the penalty for incitement is imprisonment for not more than three years, a fine of up to A$32,40000, or both. On the other hand, the penalty for bribing a foreign official is imprisonment for not more than ten years and/or a fine of up to 10,000 penalty units (approximately A$3.13 million).
Corporations found guilty of bribery offences are also liable to substantial fines, with maximums ranging from A$162,000 to A$750,000. However, in one state, the penalty can be unlimited, and it may be whichever is greater between a percentage of the corporation's annual turnover or a multiple of the value of the benefit obtained. Additionally, companies may be ordered to repay or forfeit the value of any benefits received through bribery.
Furthermore, directors or officers of a company may breach their duties under the Corporations Act 2001 if they fail to take proper measures to prevent and detect bribery. The Australian Securities and Investments Commission (ASIC) is increasingly interested in directors' oversight of bribery and corruption risks and is working with the Australian Federal Police to investigate these matters.
It is important to note that penalties under State and Territory laws are not uniform, and there are also specific defences available in relation to foreign bribery offences. Organisations should implement anti-bribery policies and procedures that are proportionate to their size and nature of business to mitigate the risk of bribery.
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Corruption and bribery are state matters
Australia is a federation of six states and two self-governing territories. The Australian Constitution specifies the areas in which the Commonwealth has the power to legislate, leaving the remainder to the states. Corruption and bribery are largely state matters. Each state and territory criminalises both public sector and private sector bribery. However, many of these offences are technical in nature and therefore difficult to enforce.
The Australian federal government has laws prohibiting the bribery of federal public officials and foreign public officials. The offence of bribing a foreign public official is contained in section 70.2 of the Criminal Code. A person is guilty of this offence if they intentionally provide, offer, or promise a benefit to another person, or cause a benefit to be provided, with the intention of improperly influencing a foreign public official to obtain or retain business or a business or personal advantage.
The Australian government actively works with foreign governments to stamp out bribery, as it harms Australia's trade and investment interests and can inhibit the growth of Australian businesses. The Australian government supports ethical business practices and the prosecution of those who engage in illegal practices, which helps improve Australia's investment opportunities overseas and is an important aspect of Australia's global reputation.
To comply with anti-bribery legislation, organisations should have policies and procedures in place and take steps to ensure that compliance is embedded within the organisation's culture. Directors have a critical role in setting the tone and fostering a culture of integrity and compliance within their organisations. They must conduct regular risk assessments to identify areas of the business that may be exposed to bribery and corruption risks.
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Anti-bribery legislation for organisations
Australia has been actively investigating suspected bribery within and outside its borders, and enforcing anti-bribery legislation. The country has a zero-tolerance approach to bribery and corruption, which are largely considered State matters.
Organisations must be aware of anti-bribery legislation and implement policies and procedures to ensure compliance. This includes fostering a culture of compliance within the organisation, with top-level management taking responsibility for implementing and promoting an effective anti-bribery compliance program.
The International Organisation for Standardisation (ISO) released ISO 37001 to assist organisations in implementing effective anti-bribery management systems. While certification does not guarantee the prevention of bribery issues, it demonstrates a commitment to compliance and can reduce corporate liability.
Penalties for Non-Compliance
Penalties for breaching anti-bribery laws can be severe, including significant fines and imprisonment. For instance, the maximum penalty for a foreign bribery offence is 10 years' imprisonment and/or a fine of up to $2.1 million for individuals. For corporations, the maximum fine is the greater of three times the value of the benefit obtained or 10% of the annual turnover if the value cannot be determined.
Defences and Exemptions
There are defences available under Australian law for bribery of foreign officials, including when a foreign or local written law required or permitted the provision of the benefit, or when the benefit was a facilitation payment for expediting a routine government action of a minor nature. However, facilitation payments are controversial, and their prohibition has been recommended by the OECD Working Group on Bribery.
Organisations operating in Australia must be vigilant in preventing bribery and corruption, not only to avoid legal consequences but also to maintain public trust and uphold good corporate governance. By complying with anti-bribery legislation, organisations contribute to a stronger business environment in Australia and on a global scale.
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Reporting bribery or corruption
Bribery and corruption are largely state matters in Australia, and each state and territory criminalise both public and private sector bribery. However, the Australian federal government also has laws that prohibit the bribery of federal and foreign public officials.
If you suspect that an Australian individual or company has bribed, or tried to bribe, a foreign official, you can report it to the Australian Federal Police (AFP). The AFP works with other government agencies in Australia and overseas to investigate and prosecute these serious offences. The Australian Securities and Investments Commission (ASIC) is also taking an increasing interest in directors' oversight of bribery and corruption risks and is working with the AFP to investigate foreign bribery.
In addition, a federal anti-corruption commission, the National Anti-Corruption Commission (NACC), began operations on 1 July 2023. The NACC is an independent government agency with broad jurisdiction to investigate and report on corruption issues across the Commonwealth public sector. It has a wide range of investigative powers, including the ability to compel the production of documents and obtain warrants to use surveillance devices. If the NACC identifies evidence of criminal conduct, it can refer the matter to the appropriate law enforcement agency, likely the AFP or CDPP, for further investigation and prosecution.
It is important to note that bribing, or attempting to bribe, a foreign public official is a serious crime in Australia. Australian individuals and corporations can be prosecuted under Australian law and the laws of foreign countries for such acts. Therefore, if your company becomes aware of any involvement in foreign bribery, it is recommended to self-report the possible criminal conduct to the relevant authorities.
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Frequently asked questions
Yes, bribing is illegal in Australia.
For individuals, the maximum penalty for a foreign bribery offence is 10 years' imprisonment and/or a fine of up to $2.1 million. Companies can face even higher penalties, including a fine of up to 100,000 penalty units or 3 times the value gained from the benefit, whichever is greater.
Foreign bribery refers to the bribery of a foreign public official, which is a serious criminal offence in Australia under section 70.2 of the Criminal Code Act 1995 (Cth). It carries heavy penalties and can have negative effects on Australia's trade, investment interests, and business growth. On the other hand, domestic bribery refers to bribery that occurs within Australia's borders and involves Australian citizens, residents, or entities. While it is also illegal, the penalties may differ, and it is primarily governed by state and territory laws.
