Scope
This guide addresses the amendments to Australia's Criminal Code Act 1995, Division 70, introduced by the Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2024, effective September 2024. It applies to corporations and their associates operating in or from Australian territories, regardless of where the bribery occurs.
Your organization should consider this guide if it:
- Operates in Australia or conducts business through Australian entities
- Employs contractors, agents, or subsidiaries interacting with foreign officials
- Maintains operations in jurisdictions where public officials influence business outcomes
- Faces compliance obligations under the OECD Convention on Combating Bribery
Key Concepts and Definitions
Failure to Prevent (Section 70.5)
This offense arises when an associate bribes a foreign official to benefit your corporation, and you cannot demonstrate adequate anti-bribery procedures. The corporation is liable even without knowledge or approval of the bribe.
Associate (Expanded Definition)
Includes any person who:
- Serves as an officer, employee, agent, or contractor
- Operates a subsidiary of the corporation
- Is controlled by the corporation
- Performs services for or on behalf of the corporation
This definition broadens your compliance perimeter to include all parties acting in your interest.
Foreign Public Official
Covers individuals performing official duties under foreign law, employees of foreign public companies or organizations, government officials, authorized intermediaries, election candidates, and those providing public services as defined by foreign domestic law.
Absolute Liability
Your corporation can be convicted for failing to prevent bribery even if the specific associate isn't found guilty. The focus is on your systems, not the individual's culpability.
Requirements Breakdown
Jurisdictional Reach
Australian Organizations
Liable if wrongdoing occurred:
- Inside Australia by any associate, regardless of nationality
- Outside Australia by any associate, if the conduct would constitute an offense under the Criminal Code had it occurred in Australia
Foreign Corporations
Liable if wrongdoing occurred inside Australia by any associate and constitutes an offense against the Criminal Code.
Five Indicators of Adequate Procedures
1. Robust Culture of Integrity
- Conduct regular evaluations of bribery prevention controls
- Maintain oversight of control implementation
- Take disciplinary action against associates who breach anti-bribery terms
- Extend disciplinary frameworks to contractors and consultants
2. Pro-Compliance Conduct
- Implement comprehensive accounting controls as a key component of foreign bribery prevention
- Integrate financial controls with compliance monitoring
3. Anti-Bribery Compliance Function
- Ensure the compliance function receives adequate resources
- Address requests for additional resources necessary to counter foreign bribery
- Ensure the function operates independently and effectively
4. Risk Assessment and Due Diligence
- Implement bribery prevention measures aligned with transaction-specific risk
- Require associates to adopt prevention measures proportionate to their risk exposure
- Document risk assessments tied to specific business relationships
5. Third-Party Oversight
- Exercise caution in engaging third parties, particularly agents dealing with foreign officials
- Formalize third-party relationships with documented anti-bribery requirements
- Monitor third-party conduct through audits and attestations
Implementation Guidance
Immediate Actions
Conduct a Comprehensive Risk Assessment
Identify all associates under the expanded definition. Include contractors performing services on your behalf, agents interacting with foreign officials, and subsidiaries in high-risk jurisdictions.
Evaluate Existing Programs Against the Five Indicators
Assess each indicator independently, documenting where your controls meet the standard and where they fall short.
Engage Senior Management
A strong anti-bribery culture requires active involvement from senior leaders through visible participation in compliance initiatives, resource allocation, and enforcement actions.
Building the Compliance Architecture
Contractual Controls
Revise agreements with contractors, agents, and subsidiaries to include:
- Explicit anti-bribery representations and warranties
- Rights to audit and monitor compliance
- Termination provisions for bribery violations
- Indemnification for violations
Accounting Integration
Implement controls that flag unusual payments, require documentation for third-party fees, and reconcile expenses against legitimate business purposes. Segregate duties to prevent unauthorized bribes.
Resource Allocation
Document how you determine compliance function resources. Evaluate requests for additional budget or headcount against risk exposure, not just cost containment.
Risk-Aligned Measures
Develop a tiering system that assigns control requirements based on measurable risk factors: jurisdiction corruption indices, official's authority, transaction value, and competitive environment.
Common Pitfalls
Treating the Expanded Associate Definition as Theoretical
Review your contractor onboarding, monitoring, and termination processes with the same rigor you apply to employees.
Relying on Ignorance as a Defense
Absolute liability means ignorance isn't a defense. Build detection mechanisms, not just prevention policies.
Documenting Policies Without Demonstrating Culture
Culture manifests in decisions, not documents. Ensure senior leaders don't override compliance recommendations or approve questionable payments.
Underestimating Accounting's Role
Bribery often hides in accounting records. Ensure your accounting controls can distinguish legitimate payments from disguised bribes.
Applying Uniform Controls Across Risk Profiles
Your procedures must demonstrate alignment between risk and control intensity.
Quick Reference Table
| Element | Requirement | Evidence of Compliance |
|---|---|---|
| Culture | Regular evaluations, implementation oversight, disciplinary action | Audit reports, disciplinary records, senior management meeting minutes |
| Accounting | Comprehensive controls as essential component | Segregation of duties, payment approval workflows, reconciliation procedures |
| Function | Adequate resources, responsive to resource requests | Budget allocations, staffing levels, documented resource reviews |
| Risk Assessment | Measures aligned with transaction risk | Risk ratings, tiered control frameworks, due diligence documentation |
| Third Parties | Cautious, formalized engagement | Contracts with anti-bribery clauses, monitoring records, audit rights |
| Penalties (Individual) | Up to 10 years imprisonment, 10,000 penalty units (currently U.S. $2.1 million) | N/A |
| Penalties (Corporation) | 100,000 penalty units (currently U.S. $21 million), or 3× benefit value, or 10% annual turnover (whichever greater) | N/A |
Your compliance program must withstand scrutiny after a violation occurs. The question isn't whether you had policies, but whether you had adequate procedures that a reasonable corporation would implement to prevent the specific bribery that occurred. Document your risk assessments, control decisions, and resource allocations as if you'll need to justify them in court.
