The Risk Report: Anti-bribery changes will clarify 'facilitation payments', says lawyer
Tue, 29 Nov 2011 11:58 GMT
A federal government proposal to strengthen Australia's anti-bribery laws will clarify the uncertainty surrounding "facilitation payments", according to a law firm partner.
Freehills partner Paul Wenk told Thomson Reuters that removing the facilitation payments defence would eliminate any doubt about whether the payments were a bribe. However, it would effectively classify all minor payments, even those that may be necessary in some countries to get routine and minor government action, as bribery.
"Any person making such a payment would commit a crime under Australian law," Wenk said.
Home affairs and justice minister Brendan O'Connor said it was important to consider the changes after "international developments".
Securency, Note Printing Australia Ltd and six Victorian individuals who were senior executives with either company have been charged with bribing foreign officials to get deals to manufacture plastic bank notes.
Under Australia's current laws, individuals can be jailed for up to 10 years and fined $1.1m for offering or bribing foreign public officials to obtain business or an undue business advantage. Companies are liable for fines of up to $11m, or three times the value of benefits obtained, or 10 per cent of annual turnover, whichever is greater.
However, individuals and companies can claim a defence if the money was a "facilitation payment".
Facilitation payments are legal if the benefit's value was minor; its dominant purpose was to secure a routine government action; and the conduct was recorded.
The proposed changes, outlined in the government's consultation paper, are open for comment until December 15.
Minter Ellison partner Ross Freeman said a major concern for business was no regulator was responsible for enforcing bribery laws.
"Neither ASIC nor AUSTRAC have oversight for the laws. There should be a regulator assigned responsibility to discuss potential breaches before they occur with the potential to negotiate settlements before they are prosecuted. This is what occurs overseas," Freeman said.
Australian Council of Superannuation Investors research, released late last month, found that 126 ASX200 companies operating internationally were exposed to a high-risk sector, country or both, but 40 percent had no public policy prohibiting bribery or facilitation payments.
Similarly, Ernst & Young's global fraud survey found 40 percent of 1,400 Australian executives across 36 countries "rarely performed" bribery or corruption due diligence, despite more than half seeking growth opportunities in high-risk regions.
The Risk Report is published by Thomson Reuters.
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